the public at large his indebtedness to individuals. The result is well known; and it is believed that it is not too strong language to assert that there are no species of fraud and evasion of law, which the ingenuity of dishonest corporations has ever devised, which have not been practiced under this act."
"The loan of specie from established corporations became an ordinary traffic, and the same money set in motion a number of institutions. Specie certificates, verified by oath, were everywhere exhibited, although these very certificates had been canceled at the moment of their creation, by a draft for a similar amount; and yet such subterfuges were pertinaciously insisted upon as fair business transactions, sanctioned by custom and precedent. Stock notes were given for subscriptions to stock, and counted as specie; and thus not a cent of real capital actually existed, beyond the small sums paid in by the upright and unsuspecting farmer and mechanic, whose little savings and honest name were necessary to give confidence and credit. The notes of institutions thus constituted were spread abroad upon the community in every manner, and through every possible channel. Property, produce, stock, farming utensils, everything which the people of the country were tempted by advanced prices to dispose of, were purchased and paid for in paper, which was known by the utterers to be absolutely valueless. Large amounts of notes were hypothecated for small advances, or loans of specie, to save appearances. Quantities of paper were drawn out by exchange checks—that is to say, checked out of the banks by individuals who had not a cent in bank—with no security beyond the verbal understanding that notes of other banks should be returned at some future time."
"The result of the experiment of free banking in Michigan is that, at a low estimate, near a million of dollars of the notes of insolvent banks are due and unavailable in the hands of individuals."
The Commissioners recommend a repeal of the general banking law and desire "the recommendation by the Executive of a State institution, under the control of the State itself," subject to rigid scrutiny.
The banks all suspended October 28, 1839. At the following session of the Legislature, a Committee of Investigation was appointed on the Bank of the State. The Committee tried to ascertain the amount of indebtedness on the part of the directors of the bank, but the information was refused; also information on the item of their exhibit, "Due from banks." "Shuffling, evasion, and concealment are not the companions of honesty." Their available assets are insufficient "to meet their indebtedness to the State alone, without reference to their other liabilities." The Commissioners "believe the facts above stated to be sufficient to warrant them in coming to the conclusion that the funds of the State cannot be safe while intrusted to that institution."
In July, 1841, the Detroit "Daily Advertiser" maintained that not one of the banks of that State had complied with the conditions necessary to entitle
