USA > Alabama > Memorial record of Alabama. A concise account of the state's political, military, professional and industrial progress, together with the personal memoirs of many of its people. Volume I > Part 40
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WRECK OF THE BANK.
The firmness among public men indexed a greater firmness among the body of the people, and the aim of all the debate became how best to extricate the state from the clutches of the banks. Debtors met and warmly denounced propositions on the part of the banks to collect past due notes. The branch at Montgomery, for instance, that had had $1,750,000 of capital, found itself with $200,000 in specie. There were $2,400,000 due the bank, and the directors naturally wanted to get some of that amount in hand. They had brought suits for $800,000 of this indebtedness, and were proposing to sue yet other claims. The press teemed with indig- nant protests against the cruelty of the bank, and at least three public meetings were held in quick succession, at which. denunciatory resolu- tions were passed. The ridiculousness of the system could no further go. These debtors could have hoped for but one way out of their troubles, and that was to have the state tax its citizens to believe the speculators who had gutted the banks. It was to this that the people were event- ually driven. The shrewdest management of the affairs of the banks could then only serve to make a wreck a little less disastrous. Niles'
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Register, vol. 57. p. 352 (1840), estimated the bank losses of Alabama to be $1,000,000 in Tuscaloosa, $2,000,000 in Mobile, $500,000 in Montgomery, $1,000,000 in Decatur, $50,000 in Huntsville, together with $300,000 that had been embezzled by the European agent. It is curiously significant of the utter carelessness that characterized the management of every one of the banks, that it was impossible to find out how the accounts in fact stood. A joint legislative committee reported on January 9, 1843, that of the debts owing the state banks, the total was $16,392,873.77. Of this amount $8,853,135.80 was reported good; $5,501,493.16, bad, and $2,048, - 244.81 doubtful. In 1844, a like report showed of good debts, $6,755, 103.27; doubtful, $1,019,395.18; bad, $6,179,680.27, and unknown, $632,792. Gov- ernor Martin, in his message of 1845, reported a total debt due the. banks of $17,693,983, and of this $6,292,599.70 was bad. These estimates were wholly unreliable, however, as became apparent, when commission- ers were appointed to wind up the bank and its branches. They reported that they had found these legislative estimates entirely untrustworthy.
PLOTS TO DEFRAUD.
To resume the historical narrative more directly. In 1841, according to Garrett, an extensive scheme to practice frauds upon the state bank and branches was discovered and produced a profound sensation. These were to be carried out through presenting fictitious bills of exchange, to which recommendations of members of the legislature had been obtained by various false pretenses. At the ensuing session of the general assem- bly a joint committee was raised to examine into the truth of certain charges connecting the names of various members of the legislature with attempts to corrupt bank directors. They reported they discovered the existence of a disgraceful league to plunder the banks and swindle the people of the state. They seem to have lacked the courage to push the matter, however, and the matter was laid over for further considera- tion at the hands of the next legislature. This consideration it failed to get. In the discussions had at the time the report of the joint commit- tee was made, Mr. Young of Greene county drew a picture of what the committee had learned, and his statements touch the very core of the evil in the financial system, that now remained only to curse the people of the state. "He drew pictures, " says Garrett, "founded on facts which had come to his knowledge fom witnesses, that almost bewildered the imag- ination, at the extent and enormity of the schemes to plunder the banks by false papers and the certificates of members of the legislature as to the solvency of the parties, induced either by, a promised share of the proceeds, or through ignorance, or too great a desire to conciliate favor which might be useful at the ballot box, or, what was no doubt too gen- erally the case, by an obliging and careless confidence in the representa- tions of men who asked for certificates, either for themselves or their
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friends, promising their word and honor that all was right in regard to the quality of the paper submitted."
LIQUIDATION.
Governor Fitzpatrick, who was inaugurated in 1841, was mainly instru- mental in so arousing public opinion and educating it, that means were devised for placing the banks in gradual liquidation. He induced John A. Campbell to become a member of the legislature, and together they worked out the legislation that was needed. It was a very able report, Judge Campbell reviewed the history of the banking system and pointed out its disastrous effects upon the economic and social life of the state. The committee recommended that the branch at Mobile be placed imme- diately in liquidation, that the Decatur branch be restricted in incurring any new indebtedness and that the branches at Huntsville and Montgom- ery be aided to resume specie payments. Again, in 1843, he was able to report that four of the branch banks had been placed in liquidation. He said that these banks had been, for years, unable to maintain their own engagements. They had given the people an irredeemable currency, which was constantly fluctuating in value. They had generated in the state a spirit of improvidence and wastefulness. Their management had been characterized by abuses and extravagance. They had already occasioned a vast loss of capital and credit to the state. The bills passed by the legislature of a financial character looked to a permanent divorce between the state and the business of private banking. On February 4, 1846, an act was passed to regulate the affairs of the banks and provide for the payment of the state bonds. Under this act Governor Fitzpat- rick, F. S. Lyon and W. M. Cooper were appointed commissioners to conduct the settlement of the banks' affairs. Fitzpatrick declining, Hon. C. C. Clay was appointed in his stead. On December 20, 1847, they made their first full report to the general assembly. This report showed that the total amount of debts collected that were due the banks for the year ending December 31, 1846, was $1,832,794.24. In the year 1847, there was collected $1,625.179.30. They estimated that there would be realized from the remaining assets of the banks about $2,200,000. It was then clear that the people would have to resort to taxation to meet all the outstanding obligations left by the banking system.
Mr. J. H. Fitts of Tuscaloosa, in his able paper on the state banking system quotes an octogenarian friend as saying, "We had no trouble in getting plenty of money then; all we had to do was to get together and vote ourselves as much as we wanted." Those were "flush times," but. to the complexion, as shown by the commissioners, had the system come at last: a people who found themselves rising from a prolonged debauch, with a heavy bill of expenses to meet. There once lived an ingenious Quixote in an Alabama town who occasionally got on desperate sprees. When drunk he made things lively, by shooting in at windows, smashing
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show cases and breaking glass wherever he found it. When he sobered up, he meekly and quietly went his rounds, inquiring at each store whether he had done any damage there, and if he had, he promptly paid the damage and departed. Alabama prepared to do likewise after a memorable debauch. There was some talk of repudiation, but that pol- icy was sternly discountenanced. The state's credit had always been high, and the patriotic citizens determined to have the proud satisfaction of paying every dollar the state owed. It was an Herculean task to col- lect the debts due the banks, and after the first report made by the three bank commissioners, the commission was continued with only one member, Francis Strother Lyon. The unflagging industry of this man, his tact, his patience, his skill and his fine executive sense, enabled him to render a more signal service to the state in a financial way than any other man in her history. He brought his labors to a close in 1853, when he was able to report that an indebtedness for which the faith and honor of Alabama were pledged had been reduced from $14,000,000 to $3,544,666.67. The state had passed through an ordeal, and whatever may have been the disasters experienced at home, an unsullied reputa- tion for integrity had been preserved abroad.
WAR APPROPRIATIONS.
There was nothing unusual in the financial history of Alabama from the collapse of the state banking system to the beginning of the war. When the state seceded in January, 1861, energetic measures were adopted in preparation for hostilities. The legislature, on February 5th, appropriated $500,000 in aid of the cause of the southern Confederacy, and when the special tax of $2,000,000 was imposed by the Confederate - government, it was promptly paid, and then almost immediately the state issued bonds to the amount of one and one-half millions and recom- mended the other seceded states to follow this example. This was in the first flush of anticipated triumph; the bloody severity of the conflict soon had its effect upon the credit of the state and materially affected the willingness of capitalists in making investments in Alabama obligations. The slump began; enormnous issues of paper money in Richmond and larger and larger issues in Montgomery, inflated prices with constantly accelerated rapidity and brought deeper and deeper distress upon the mass of the people. There is one incident of our financial history of this period that is usually told with marked pride by Alabamians. The anxiety of the administration to preserve the credit of the state was such that Gov. Thomas H. Watts (governor 1863-65) shipped through the blockade at Mobile interest necessary to be paid on bonds held in Lon- don. Mr. J. H. Fitts detracts materially from the honor of this transac- tion on the state's part, however, by alleging that the money used in this way was borrowed from the Central Commercial and Eastern banks of Alabama, was never repaid, and recovery was defeated on the ground that the state could not be sued.
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MEMORIAL RECORD OF ALABAMA.
REPUDIATION.
In 1865, the first constitutional convention that assembled in the state after the cessation of hostilities, passed an ordinance voiding all the debts contracted by the state in aid of the war directly or indirectly, and a subsequent legislature passed an act of the same tenor, thus burying with the Confederate flag, Confederate money.
RECONSTRUCTION PERIOD.
The reconstruction period in Alabama is mainly remarkable for the extravagance with which the debt of the state was increased. The debt of the state was stated by Provincial Governor Parsons to be $3, 445,000. This, however, did not include the indebtedness incurred by the appro- priation on its parts of special funds, like the sixteenth section and uni- versity funds: Including these with the bonded debt of the year 1867, the auditor's report of that year places the state debt at $8,355,683.51. The commissioners appointed in 1874 to liquidate and adjust all claims against the state on account of indorsed bonds, reported January 24, 1876, that the direct and contingent indebtedness of the state was $30,000,000. The larger part of this enormous increase was represented by 'hasty, ill-con- sidered and sometimes doubtless corrupt indorsements of railroad bonds. In February, 1867, a law had been enacted, providing that on the con- struction of a certain number of miles by railway companies the state would indorse the bonds of the road to the extent of $12,000 per mile. In 1868 the amount of the indorsement per mile was raised to $16,000, and, tempted by the inferior character of the legislature of that session, birds of prey swept down upon it. Barbecues, dinners, excursions, unvar- nished bribery with money, influenced many votes and a huge debt was piled up to build railroads that got little beyond the paper stage. It is not surprising that in November, 1873, Gov. Lewis was forced to admit that he was unable to sell for money any of the state bonds.
Certain discrepancies will be found to exist in nearly every statement of the indebtedness of Alabama prior to the settlement of the debt in 1876. The commissioners, who made the settlement, reported that their investi- gations in the archives of the state developed the fact that the records are incompetent as to the endorsed bonds, and not entirely accurate as to the bonds extended and bonds issued and sold by the state. The careless- ness with which the faith of the state was pledged is shown in the remark of the commissioners that, according to the report of the auditor, the amount of bonds endorsed by the state for the Selma, Marion & Memphis Railroad company appeared to be $720,000. The railroad company itself claimed to have bonds so endorsed to the amount of $765,000, a difference showing a debt of $45,000, of which there was no trace on the books of the state government.
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FINANCE AND BANKING.
SETTLEMENT OF THE STATE DEBT.
The commissioners referred to were George S. Houston, then governor, Levi W. Lawler and T. B. Bethea. After summarizing the indebtedness of the state, the precise amount they fixed being $30,037,563, they pro- ceeded to inquire what could be done in the presence of so overwhelming a burden. They said the interest account alone was impossible of pay- ment, and to acknowledge the full amount as valid claims would be to acknowledge an indebtedness equal to one-fifth of all the property of the people, and the result would be corfiscation. ."It is apparent, therefore, that a just and honorable compromise is indispensable. Unjust claims must be rejected, and those which are acknowledged must necessarily be reduced." In proceeding to compromise they divided the indebtedness of the state into four classes. In class one they placed the recognized direct debt, consisting of bonds bearing five, six and eight per cent. interest, bonds issued for temporary loans and in bankrupt cases, state obligations bearing eight per cent. interest, "Patton" money, trust funds and some small claims against the state. In addition there were in this class some bonds bearing seven per cent. interest, issued in aid of certain railroad corporations, the total of this class was $11,677,470. As to their in- debtedness the commissioners proposed as a compromise that the past due interest be canceled and to substitute a new bond for the face of those outstanding, the new bond to have thirty years to run, bearing interest at the rate of two per cent. per annum for five years from July 1. 1876, three per cent. for the next ensuing five years thereafter, four per cent. for the next ten years and five per cent for the next ten years. They estimated that such a settlement would save the state $1,250,000 in can- celed interest, in addition to the large amount saved by a reduction in the amount of interest to be paid. In class two, certain bonds issued in aid of the construction of railroads, amounting to $1,192,000, were recom- mended to be scaled fifty per cent, and the interest reduced to five per cent per annum. The original rate of interest was seven per cent. In the third class were certain bonds, hypothecated, and various claims by banking concerns and private individuals, amounting to $2,573,093. In class four they placed the enormous indebtedness incur- red by reason of the state aid system, by which a number of railroads had been able to get the state deeply in their debt. The Alabama & Chattanooga railroad had $4,720,000 of endorsed bonds; the Montgomery & Eufaula $1,280,000, and so on. The unpaid interest amounted to $2,750,000. These bonds, together with the straight bonds loaned to rail- roads, amounted to $14,641,000. The commissioners proposed that in the case of the Alabama & Chattanooga railroad, the state should issue a new series of bonds amounting to $1,000,000, and turn these over, together with the railroad itself and its land grants, to the bond holders. In the case of the others they suggested that the true interest of the bond hold-
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MEMORIAL RECORD OF ALABAMA.
ers lay in the acceptance by them of a transfer of the lien created by statute, the state to have a full discharge from the "pretended" claims against it. The commissioners stated in their report to the governor that Alabama needed "indulgence," and they italicized "indulgence." The state finances were broken down and rest was needed. The creditors seem very generally to have taken this view of it and the commissioners had little difficulty in prevailing upon the creditors to agree to the terms proposed. The result was to reduce the indebtedness of the state, direct and contingent, from $30,037,563, the amount it had been placed at by the commissioners, to a little more than $9,000,000, the precise figures being, in 1892, $9,293,400.
Since the settlement of the state debt there has been little to chronicle in the way of financial events. The assessed value of property has stead- . ily increased, and the tax rate, that was then 7{ mills on the dollar, was reduced in 1892 to 4 mills. In that year the decrease was found to be too great; and a deficit was shown to exsit in the treasury. The general assembly promptly responded to the earnest demand of public opinion, that the credit of the commonwealth should be preserved unimpaired, and raise the rate to 5 mills. In that year the assessed valuation of property was $260,926,127, and the taxes amounted to $1,048,899.36. In 1882 the assessed valuation had been $151,520,551. In recent years, the valuation of property, if it has not gone forward with "leaps and bounds," has at least increased rapidly enough to be deeply gratifying to all lovers of the state and to promise a great future for its inhabitants.
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PERSONAL MEMOIRS-AUTAUGA COUNTY.
Personal Memoirs.
AUTAUGA COUNTY.
DR. JOHN W. DAVIS, a retired physician and surgeon of Autauga county, Ala., was born here in 1838, the son of Benjamin, born in Brunswick county, Va., in 1780, and Martha (Taylor) Davis, born in Oglethorpe county, Ga., in 1797. Maj. Benjamin Davis was a soldier of the war of 1812 and was one of the pioneer settlers of Autauga county, having come here in the year 1818 or 1819; here he married, and became quite popular -at one time representing Autauga county in the state legislature and at another time serving as tax collector. He was a well-to-do farmer and died, in 1863, at the age of eighty-four years, a life-long Methodist. Mrs. Martha Davis was a daughter of Benjamin Taylor, who came to Alabama from Georgia and settled in Autauga county many years ago; she died in 1873, at the age of seventy-seven years. These parents had born to them nine children viz: Mary Eliza, deceased wife of German Fike; Dr. Ben- jamin F., deceased; Warren Merritt, killed when young, by a falling tree; Balert Henry; Louisiana, deceased wife of John H. Barlow; Dr. Thomas Asbery, of Anniston, Ala., who served as captain of company G, Sixth Alabama infantry, and later as surgeon of the regiment, and later still as brigade surgeon under Gen. Gordon; Laura T., wife of William Caver, of Autaugaville; Mary, deceased wife of J. H. Gohlson, also deceased; and Dr. John W. Dr. John W. Davis was educated at the school of his dis- trict and at Summerfield, Dallas county; he then read medicine with his brothers; attended the university at New Orleans, and graduated, in 1859, from the medical department of the university of Atlanta, Ga., fully equipped for the practice of his profession. Early in 1861, he joined company G, Sixth Alabama infantry, and with it went to Virginia, where he was taken prisoner by the enemy the day before the first battle of Bull Run, and was confined in prison at Washington, D. C., for six months, when he was paroled. On his return to his native state he engaged in the practice of his profession for nine months in Perry county: was then detailed to take charge of the sick at the Alabama salt works in Clarke county, and at the end of another period of nine months joined the artil- lery at Mobile; was sent to Fort Gaines, where he was again captured, and for three months confined in the barracks at New Orleans, and for four months on Ship Island, and was exchanged at the latter place in January, 1865, returned home, resumed his practice and engaged in farming. In 1867 he married Miss Astoria J., daughter of Dr. John and Clarissa Shackleford, of Autauga county. Both these parents are now
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MEMORIAL RECORD OF ALABAMA.
deceased, the father having died when Mrs. Davis was a little girl. He was a son of Gen. Shackleford, one of the pioneers and one of the most prominent citizens of Autauga county. Dr. Davis abandoned the practice of his profession a few years after the close of the war, and has since devoted his entire attention to his agricultural interests. He owns 1,350 acres of rich land, all secured by his own efforts. The doctor is a member of Autaugaville lodge, No. 449, F. & A. M., and with his wife is a member of the Methodist Episcopal church.
COL. CHARLES S. G. DOSTER is a native of Autauga county, Ala., and its oldest lawyer. His father, Absalom Doster, was born in Mecklen- burg county, N. C., 1796, and his mother, Mrs. Sarah (Alexander) Doster, in Greene county, Georgia, in 1806. Absalom Doster received a fine English education when young, and at the age of sixteen was taken by his parents to Georgia, and in 1818 came with them to Autauga county, Ala., where he engaged in merchandising at old Washington, then the oldest town in this part of the state. He was married in 1822, and continued in the mercantile business and in farming at Washington for several years, when he removed to a point near Prattville, where he con- tinued to be a leading planter until his death in 1882. He was a man of good business capacity and sound sense, and served in the state legisla- ture in 1840-41, when the capitol was located at Tuscaloosa, and was the only whig that ever represented Autauga county in that body. He was prominent as a deacon in the Baptist church, at Prattville, for many years, and was forty years a Mason-first a member of the lodge at Washington, and then of Hampden-Sydney lodge at Robinson Springs, Elmore county .. In the war of 1812 he was stationed at Savannah, Ga. His parents, James and Lydia Doster, came from an inflential family of North Carolina, of Irish extraction. Mrs. Lydia Doster died at Wetumpka, Ala., Mrs. Sarah (Alexander) Doster is still living and has been a member of the Baptist church since early womanhood. Her parents, Edmond and Mary Alexander, came to what is now Lowndes county, when Alabama was a vast wilderness, inhabited by wild animals and still wilder men. Mr. Alexander was a Virginian by birth, and entered the colonial army when but twelve years of age. He and wife ended their days in Lown- des county, where they reared a large family of children. Charles S. G. Doster is the second in a family of four sons and two daughters, viz .: Dr. Edmond A., who was a graduate from a New York university, and attained a high rank as a physician, but is now deceased; Charles S. G., who was born in 1830; Victoria, wife Zachariah Abney, prominent as a lawyer in Prattville; Madora, wife of M. D. Lamar, and two that died young. Col. Charles S. G. Doster was reared on the home plantation, received his early education at Rocky Mound academy, then attended the East Tennessee university, and in 1853 graduated from the Centenary col- lege at Jackson, La. He had read law for some years prior to his final graduation under the late distinguished ex-Governor Watts, with
C. S. G. DOSTER.
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PERSONAL MEMOIRS-AUTAUGA COUNTY.
whom he was very intimate for half a century, and in 1851 was admitted to the bar, Col. Doster is now one of the oldest lawyers in the state and one of the most eminent.
In 1854 Col. Doster married Miss Caroline E., daughter of John and Nancy (Harris) Slaton, who were natives respectively, of Kentucky and. Georgia, were married in Georgia, and in 1835 settled in Autauga county, where Mr. Slaton was engaged in planting until his death in 1846. His widow survived until 1882. Of the large family born to this couple two sons were in the late war, viz .: Maj. William F. Slaton, who is now superintendent of education at Atlanta, Ga .; he was in the army of the Tennessee, was wounded and captured at Corinth, and served a time in a Federal prison; Capt. Henry H. Slaton, after the war, became a member of the Florida legislature, but later moved to Arkansas, in which state he died. Col. C. S. G. Doster has been very active in politics and in public life in general. His first office was that of justice of the peace; from 1854 he was from six to eight years superintendent of education of Autauga county. He was colonel in the state militia before the war, and during that struggle was commandant of the militia stationed at Prattville. After the war had closed he served in the state legislature until the republicans gained control of the state, and was chairman of the commit- tee on education and a member of the judiciary committee. In 1870 he was again sent to the legislature and served on the judiciary committee. In 1872 he was elected to the state senate for four years, in which body he was chairman of the committee on privileges and elections and a mem- ber of the judiciary committee. He resigned, however, before the expir- ation of his term to make the race for the position of circuit judge, but was defeated, and has never sought office since. He was also, in 1866, a member of the celebrated national convention which met at Philadelphia to sustain President Andrew Johnson in his reconstruction policy. This convention was composed of many of the most eminent men of the country, and Col. Doster was one of its secretaries. Col. Doster is a large stock- holder and a director in the Prattville Cotton Mills and Banking com- pany, and to the large property he inherited he has added materially. He has for many years been a member of Prattville lodge, No. 89, F. & A. M., is chairman of the board of stewards of the Methodist Episcopal church, and has been for many years president of the board of school trustees of the Prattville Male and Female academy. Mrs. Doster, who was born in Georgia, is the mother of five children. viz .: Mary Tulula, wife of W. W. Reynolds; Charles E., a lawyer and planter; Corinne, now Mrs. J. L. Alexander: Howard S., editor and proprietor of the Prattville Progress, and Carrie M. Col. Doster, the largest planter and land-holder in the country, is universally popular, and is perhaps more familiar with its early history than any other inhabitant of the state.
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