or bill signed by him, for a less sum than $50, payable at any place out of the State. A fine of $5 was also imposed on any one who should pass a note for less than $5 issued by a bank out of the State.
The banks of Rhode Island had a peculiar "bank remedy" or "bank process" against delinquent debtors, according to which execution issued directly without previous process and finding of judgment. The bank process was abolished in 1836, on the recommendation of a committee of the Legislature, who found that it was liable to abuse, and that the remedies provided for other people were also sufficient for the banks.
In Vermont, in 1803, two bank acts were vetoed, on the ground that banks demoralize the people by gambling, concentrate wealth in the hands of the few, and are useless to the many since they give credit only to the rich. Here now we meet with the first great State paper money machine. It was first proposed in o 5, and rejected; but November 10, 1806, it was adopted. It was to be called the Vermont State Bank; to have two branches; to be the property of the State; to be controlled by the State, and all the profits to go to the State. The directors were to be chosen by the Legislature, six for each branch. Each branch had a great degree of independent life and action. The directors of each branch were to borrow specie from time to time for that branch and on its credit, not issuing more notes than the actual specie on hand until that amounted to $25,000. After that they might put in circulation three times the amount of specie, provided that the last should never exceed $300,000. Five hundred dollars were appropriated to procure plates and paper, and the Legislature might appropriate money in the Treasury to fill the coffers of the bank. The directors were authorized to purchase, hold and transfer real or personal property, as it might be necessary to protect the interests of the State in the proposed operations.[1] The next year the directors reported that, on September 30, 1807, there was due the bank, $139,757. The notes were of the denomination of fifty cents, seventy-five cents, one dollar, a dollar and a quarter, a dollar and a half, a dollar and seventy-five cents, two dollars, and three dollars. These had been printed and issued on mortgage loans. The institution was reported prosperous and successful, and in order that the State might win the expected profits it made a monopoly of its bank, just like the other banks, by enacting that no notes issued by any bank out of the State should be brought into the State to be loaned there.
The next year the trouble begins. It is charged that noteholders cannot get notes redeemed without paying a discount of one per cent. or two per cent. or taking a draft on a distant bank, payable after thirty or sixty days. The defense was that this rule was made only for defense against speculators or persons unfriendly to the bank, and it seems to have been held good. These, however, were the familiar tricks of banks formed by selfish private capitalists. The notes in circulation were now over half a million; the State was
- ↑ Session Laws, 1806, c. 110.
