consisted of city notes. In some way the city obtained possession of some old notes of the United States Branch Bank at Pensacola, in sheets and unsigned. The city notes were printed on the back of these crosswise, so that when they were cut apart each of the city notes had on its back the halves of two of the old notes, of a different denomination. To supply the deficiency of small change, the city notes were cut in two, so that on one side would be half of a $1 note, and on the other side, crosswise, the half of a $5 or $10 note. The paper was very good and the engraved design of the old notes was good, while that of the city notes was bad. The notes were counterfeited by photography.[1]
Texas came into the Union with a Constitution which provided that "No corporate body shall hereafter be created, renewed, or extended, with banking or discounting privileges. No private corporation shall be created unless the bill creating it shall be passed by two-thirds of both Houses of the Legislature, and two-thirds of the Legislature shall have power to revoke and repeal all private corporations by making compensation for the franchise, and the State shall not be part owner of the stock or property belonging to any corporation. The Legislature shall prohibit by law individuals from issuing bills, checks, promissory notes, or other paper to circulate as money."
The Commercial and Agricultural Bank of Galveston possessed an old charter, obtained in 1835, from the State of Coahuila and Texas. It was reorganized December 30, 1847, as the Bank of Agriculture and Commerce. The Attorney-General commenced proceedings against it to recover the penalties for an unauthorized note issue, but the suit failed on a demurrer.[2] It went into liquidation in 1858.
Tennessee.—The Farmers and Merchants' Bank of Memphis suspended and was enjoined, May 24, 1847. It presented a long memorial to the Governor, setting forth that a new board of directors, by endeavoring to make much needed reforms, had provoked hostility and persecution, which had forced it to suspend. It was required to resume before the next meeting of the Legislature. It went into liquidation.
The Bank of the State of Tennessee was authorized, February 2, 1846, to reduce its capital $200,000. February 3, 1848, it was allowed to issue notes down to $1. February 9, 1850, it was authorized to sell the stock owned by the State in the Union Bank and the Planters' Bank and held by it, and to buy State stocks with the proceeds. This transaction, however, did not take place. Year by year we find the existence of this bank put in question. The public men of the State doubted its usefulness, and even its officers either recommended its discontinuance, or gave it only a half-hearted defense.[3] Still it was continued, apparently chiefly for the reason that there was a prejudice in its favor as, in some way, the poor man's friend.
The president and directors, in their report of 1856, recommended that the bank be put in liquidation, saying that it seemed to have been injudicious
