carelessly drawn. Butler says in regard to the institution that "it began in fraud and ended in bankruptcy." "The political party which then controlled Kentucky held banks in horror and never would have passed the bill had they understood its provisions."[1]
December 27, 1806, the Bank of Kentucky at Frankfort was chartered, to last until December 3, 1821. The capital was to be $1 million, half of it to be subscribed bt the State. It was to begin when $20,000 were subscribed. All the debts, exclusive of deposits, were not to exceed three times the capital. It was to loan only to Kentuckians; no director might borrow over $5,000 or be an endorser for more than $10,000 in the bank. It might have branches in the State for discount and deposit only. It was to make weekly reports to the Governor, and its notes "payable on demand in current money" were to be received by the State. The debt to the State from the settlers on the vacant lands was relied upon to pay the State's subscription. The Legislature had the power to elect the president and six directors. "The political majority, when times of excitement arose, drove the bank on the shoals of party and ultimately shipwrecked the institution. The power of branching the bank became a subject of local and party contention, and the influence of the Legislature, through its election of the majority of the directory, was brought to bear upon the decision. The extension of the bank then ceased to be a mere fiscal or mercantile question to be governed by the interests of the corporation, but was converted into one of political influence."[2]
Ohio.—The Miami Exporting Company was incorporated in April, 1803, with "banking privileges." February 10, 1808, the Bank of Marietta asked for a charter until 1818, from which it appears that it was an already existing association. The limit of the capital was set at $500,000, besides such shares as the State might take. The State might subscribe one share for every five subscribed by individuals. It was to have one year's credit in paying for them, but was to receive dividends on them as if paid for. There was no clause providing for specie payment and no penalty for suspension; but the bank was forbidden to issue notes or contract debts "payable in the bills of credit emitted by the laws of this State." A week later the Bank of Chillicothe was incorporated, with a capital not to exceed $100,000. The State subscription and the prohibition against dealing in State notes were the same as in the case of the former bank. It was provided that this act "shall be construed in all courts and places benignly and favorably for any beneficial purposes thereby intended." At the same time the Bank of Steubenville was incorporated with all the same features. Three other banks were incorporated in 1812 and 1813. At the session of 1813-1814 a number of manufacturing companies and companies to make canals and harbors were incorporated, but they were expressly forbidden to engage in banking.
In the Territory of Michigan, the Governor and three Judges constituted
