the last decade of the century. The present constitution (as revised in 1908) forbids the contraction of a state debt exceeding $250,000 except for repelling an invasion or suppressing an insurrection, and the borrowing power of the minor civil divisions is restricted by a general law.
The early experience of the state with banks was scarcely less serious than that with public improvements. Although there were already fifteen banks in the state in 1837 yet the cry against monopoly was loud, and so in that year a general banking law was passed whereby any ten or more freeholders might establish a bank with a capital of not less than fifty thousand nor more than three hundred thousand dollars and begin business as soon as 30% of the capital was paid in in specie. Only a few provisions were made, and those ineffectual, for the protection of the public: later in the same year the legislature passed an act for the suspension of specie payments until the 6th of May 1838, and the consequence was that the state was flooded with irredeemable paper currency. But most of the “wild cat” banks had passed out of existence by 1839, and in 1844 the bank act of 1837 was declared unconstitutional. Profiting by this experience, the framers of the constitution of 1850 inserted a provision in that document whereby no general banking law can have effect until it has been submitted to the people and has been approved by a majority of the votes cast on the question. This provision is included in the revised constitution adopted in 1908, with an additional provision that no amendment shall be made to any banking law unless it shall receive an affirmative two-thirds vote of both branches of the legislature. The present banking law provides that the capital stock of a state bank shall be not less than $20,000 in a city of not more than 1500 inhabitants, not less than $25,000 in a city of not more than 5000, not less than $50,000 in a city of between 5000 and 20,000, not less than $100,000 in a city of between 20,000 and 110,000, and not less than $250,000 in all larger cities. Commercial banks and savings banks are required to keep on hand at least 15% of their total deposits. Every stockholder in a bank is made individually liable to the amount of his stock at its par value in addition to the said stock. And all banks are subject to the inspection and supervision of the commissioner of the state banking department, who is appointed by the governor with the approval of the Senate for a term of four years.
History.—From 1613 until 1760 the territory now within the borders of Michigan formed a part of New France, and the first Europeans to found missions and settlements within those borders were Frenchmen. Two Jesuits, Raymbault and Jogues, visited the site of Sault Sainte Marie as early as 1641 for the conversion of the Chippewas; in 1668 Marquette founded there the first permanent settlement within the state; three years later he had founded a mission among the Hurons at Michilimackinac; La Salle built a fort at the mouth of the Saint Joseph in 1679; and in 1701 Cadillac founded Detroit as an important point for the French control of the fur trade. But the missionaries were not interested in the settlement of the country by Europeans, the fur traders were generally opposed to it, there was bitter strife between the missionaries and Cadillac, and the French system of absolutism in government and monopoly in trade were further obstacles to progress. Even Detroit was so expensive to the government of the mother country that there was occasional talk of abandoning it; and so during the last fifty-nine years that Michigan was a part of new France there were no new settlements, and little if any growth in those already established. During the last war between the English and the French in America the Michigan settlements passed into the possession of the English, Detroit in 1760 and the others in 1761, but the time had not yet come for much improvement. The white inhabitants, still mostly French, were subjected to an English rule that until the Quebec Act of 1774 was chiefly military, and as a consequence many of the more thrifty sought homes elsewhere, and the Indians, most of whom had been allies of the French, were so ill-treated, both by the officers and traders, that under Pontiac, chief of the Ottawas, a simultaneous attack on the English posts was planned. Detroit was besieged for five months and both Michilimackinac and Saint Joseph were taken. Moreover, the English policy, which first of all was concerned with the profits of trade and manufacture, gave little more encouragement to the settlement of this section of the country than did the French. By the Treaty of Paris, in 1783, which concluded the American War of Independence, the title to what is now Michigan passed to the United States, and in 1787 this region became a part of the North-West Territory; but it was not until 1796 that Detroit and Mackinac (Michilimackinac), in accordance with Jay’s Treaty of 1794, were surrendered by Great Britain. In 1800, on the division of the North-West Territory, the west portion of Michigan became a part of the newly-established Indiana Territory, into which the entire area of the present state was embodied in 1802, when Ohio was admitted to the Union; and finally, in 1805, Michigan Territory was organized, its south boundary being then described as a line drawn east from the south extremity of Lake Michigan until it intersected Lake Erie, and its west boundary a line drawn from the same starting point through the middle of Lake Michigan to its north extremity and then due north to the north boundary of the United States. In 1812, during the second war between Great Britain and the United States, General William Hull, first governor of the Territory, although not greatly outnumbered, surrendered Detroit to the British without a struggle; in the same year also Mackinac was taken and Michigan again passed under British rule. This rule was of short duration, however, for soon after Commodore Oliver H. Perry’s victory on Lake Erie, in September of the next year, Detroit and the rest of Michigan except Mackinac, which was not recaptured until July 1815, were again taken into the possession of the United States. Up to this time the Territory had still remained for the most part a wilderness in which the fur trade reaped the largest profits, its few small settlements being confined, to the borders; and the inaccurate reports of the surveyors sent out by the national government described the interior as a vast swamp with only here and there a little land fit for cultivation. The large number of hostile Indians was also a factor in making the Territory unattractive. But during the efficient administration of Lewis Cass, governor of the Territory from 1813 to 1831, the interference of the British was checked and many of the Indians were removed to the west of the Mississippi; printing presses, established during the same period at Detroit, Ann Arbor, Monroe and Pontiac, became largely instrumental in making the country better known; the first steamboat, the “Walk-in-the-Water,” appeared at Detroit in 1818; the Erie canal was opened in 1825; by 1830 a daily boat line was running between Detroit and Buffalo, and the population of Michigan, which was only 4762 in 1810 and 8896 in 1820, increased to 31,639 in 1830 and 212,267 in 1840. In 1819 the Territory had been empowered to send a delegate to Congress. By 1832 the question of admission into the Union had arisen, and in 1835 a convention was called in Detroit, a constitution was framed in May, that constitution was adopted by popular vote in October, state officers were elected, and application for admission was made; but a dispute with Ohio over the boundary between the two caused a delay in the admission by Congress until early in the year 1837. Although the ordinance creating the North-West Territory fixed the boundary line as claimed by Michigan, yet that line was found to be farther south than was at the time expected and when the constitution of Ohio was adopted it was accompanied with a proviso designed to secure to that state a north boundary that was north of the mouth of the Maumee River. The territory between the two proposed lines was unquestionably of greater economic importance to Ohio than to Michigan, and, besides, at this particular time there were forcible political reasons for not offending the older state. The consequence was that after the bloodless “war” between the two states for the possession of Toledo, Congress settled the dispute in Ohio’s favour and gave to Michigan the territory since known as the upper peninsula. The boundaries as fixed by Congress were rejected by a convention which met on the 4th of September at Ann Arbor, but they were accepted by the convention of the Jackson party, which met, also at Ann Arbor, on the 6th of December; the action of this latter convention was considered authoritative by Congress, which admitted Michigan into the Union as a state on the 26th of January 1837. Since admission into the Union the more interesting experiences of the state have been with internal improvements and with banking, which together resulted in serious financial distress; in the utilization of its natural resources, which have been a vast source of
