USA > Arkansas > A pictorial history of Arkansas, from earliest times to the year 1890. A full and complete account, embracing the Indian tribes occupying the country; the early French and Spanish explorers and governors; the colonial period; the Louisiana purchase; the periods of the territory, the state, the civil war, and the subsequent period. Also, an extended history of each county in the order of formation, and of the principal cities and towns; together with biographical notices of distinguished and prominent citizens > Part 19
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Independence, John Ringgold, Town- send Dickinson.
Izard, Chas. R. Sanders.
Izard and Carroll, John Adams.
Jackson, John Robinson.
Jefferson, Sam C. Roane.
Johnson, Lorenzo N. Clark.
Johnson and Pope, Andrew Scott. Lafayette, Josiah N. Wilson.
Lawrence, Robert Smith, Thomas S. Drew, David W. Lowe, Hy. Slavens. Miller, Travis G. Wright.
Monroe, Thomas J. Lacy.
Phillips, Henry L. Biscoe, George W. Ferebee. Pike, Elijah Kelly.
Pope, Thomas Murray, Jr.
Pulaski, White and Saline, William
Cummins, Absolom Fowler, John McLean.
Scott, Gilbert Marshall.
Sevier, Joseph McKean.
St. Francis, Wm. Strong, Caleb S. Manly.
Union, Andrew J. May.
Van Buren, W. W. Trimble, John L. Lafferty .¡
Washington, Davis Walker, Mark Bean,
Abraham Whinnery, Wm. McK. Ball, Jas. Boon, Robt. McCamy.
The convention, proceeding with their labors, framed a Con- stitution suitable for a Republican form of government, em- bracing in its topics such matters as seemed conducive to good government, and adjourned January 30th, 1836.
C. F. M. Noland, of Batesville, was appointed messenger, to bear the Constitution to Washington. He did not arrive there until March 8th. In the meantime, Mr. Sevier, waiting impatiently for the arrival of the instrument, received, Febru- ary 29th, a copy of the "Gazette," with the Constitution, all except the ordinance, printed as an extra.
On the next day, there being some urgency about having the matter before the Body, he laid this "Extra" before the House of Representatives as the Constitution, and had it re- ferred to the Committee on Territories, intending to replace it with the original instrument when received. When Mr. Noland arrived with the document, March 8th, it was at once
(*) Wm. D. Ferguson contested seat of W. W. Elliott, and was seated in his stead.
(t) John L. Lafferty contested seat of W. W. Trimble, and was seated in his stead.
257
FROM 1834 TO 1836.
used for the purpose of being laid before the President. As the matter had already been considered by the Committee, President Jackson communicated it to Congress, March Ioth. Before Congress the matter experienced considerable delay, and a long discussion-the discussion, as two years before, as- sociating the reception of Michigan with Arkansas.
The point of objection in the case of Arkansas was that it proposed to be a slave-holding State. The opposition also took the ground that her proceedings for securing a State Government were revolutionary and unusual ; that her people had dared to form a Constitution for themselves, before re- ceiving the permission of Congress to do so. This objection was even urged to the extent of taking the opinion of the At- torney-General, Benjamin F. Butler, on the subject. His opinion was in favor of her proceedings. He took the view that it was the right of the people peaceably to assemble, and present by petition any request that they might desire to make; that the holding of the convention was nothing more than their peaceably assembling, and their formation of a Constitution, and accompanying requests for a State Govern- ment, was nothing more than their petition to Congress to be admitted into the Union on the basis thereof. Finally, when the consideration of these matters had run through three months, the Bill to admit both Arkansas and Michigan, upon their ac- ceptance of its provisions, passed Congress, June 15th, 1836, and received the signature of the President the next day. In the Senate, the vote on the passage of the Bill was 31 ayes to 6 noes, II members were absent or not voting. The State was allowed one Representative until the next census, and the laws of the United States were declared extended over it.
17
PERIOD IV. FROM 1836 TO 1861.
CHAPTER XI.
FROM 1836 TO 1840.
ARKANSAS A STATE .- JAMES S. CONWAY, FIRST GOVERNOR .- REAL ESTATE AND STATE BANKS, ETC., ETC.
THE Constitution under which the new State entered the Union, provided for an election of State officers, to be held on the first Monday in August, and that a Representative to Congress should be chosen at the same time. It was further provided, that the Assembly should convene on the second Monday in September, and declare the result of the election.
The Democrats brought forward James S. Conway for Gov- ernor, and Archibald Yell for Congress. The Whigs were led by Absolom Fowler, of Pulaski, for Governor, and Wm. Cum- mins for Congress. Strong majorities declared James S. Con- way and Archibald Yell the choice of the people for the high- est trusts in their keeping.
The State Legislature assembled in its first session in the unfinished State-House, September 12th, 1836. Sam. C. Roane was elected President of the Senate, and J. Greer, Secretary. In the House, John Wilson was chosen Speaker, and Samuel H. Hempstead, Clerk. The valedictory of Gov- ernor Fulton was delivered. With his retirement, the Territory gave place to the State. The result of the election for Gov- ernor was formally declared, and 3 o'clock P. M. was set for the inauguration of Governor elect Conway. At the time appointed, Mr. Conway appeared, escorted by Robert Mc- Amy, of the Senate, and Grandison D. Royston, of the House.
261
JAMES S. CONWAY. First Governor of the State.
263
FROM 1836 TO 1840.
The oath of office was administered by Albert Pike. The Governor chose for his Private Secretary John J. Clendennin.
James Sevier Conway, who thus became the first Governor of the State, was born in Green county, Tennessee, December 5th, 1796, son of Thomas and Ann Conway, the second of seven sons, all of whom became distinguished men. In 1816 he emigrated to St. Louis, Missouri, and from there came to Arkansas on a surveying expedition in 1820, and in 1823 came. to the Territory to live, settling on a farm on Red river, in Lafayete county. In 1825 he surveyed the western bound- ary line of the Territory, and in 1831 surveyed the southern boundary, as has been stated. In 1832, on the creation of the office, he became Surveyor-General of the Territory, and was in the discharge of its duties up to the time when he was elected Governor. At the time of his election he was a resi- dent of Hot Spring county. He served as Governor one term of four years. He died at Walnut Hills, Lafayette county, March 3d, 1855, in the 59th year of his age. The members of this family surviving are a son, Frederick Elias Conway, of Little Rock, and three daughters, Mrs. Dr. Sevier, Mrs. Logan, and Mrs. M. C. Bradley, living on Red river, or in the vicinity of Walnut Hills.
At this session of the Legislature, A. H. Sevier and William S. Fulton were chosen United States Senators. Doctor Robert A. Watkins became the first Secretary of State. Townsend Dickinson, Daniel Ringo, and Thomas J. Lacy were elected Judges of the Supreme Court, Daniel Ringo being chosen Chief Justice. Elias N. Conway was elected Auditor without opposition, and William E. Woodruff was elected Treasurer. Woodruff and Pew were made State Printers. President Jackson appointed Benjamin Johnson United States District Judge, Thomas J. Lacy District Attor- ney, and Elias Rector, Marshal. Judge Lacy declined the Attorneyship, and served as Judge. The Judges of the Su-
264
HISTORY OF ARKANSAS.
preme Court appointed H. Haralson, Clerk of the court, an office which he held for a number of years.
And thus, with a full complement of officers for her gov- ernment, the State began her official life.
In the autumn occurred the first Presidential election in which the State of Arkansas took part. The candidates were Martin Van Buren, the nominee of the Democrats, and William Henry Harrison, the nominee of the Whigs, with Daniel Webster and Hugh L. White also Whig candidates. The vote of Arkansas was for Van Buren, the successful can- didate.
Upon this, the first Legislature, devolved the arrangement of all the minute and numberless matters of State life. Many Bills were passed defining duties of officers, guarding pub- ilc interests. Militia was to be organized, Courts estab- lished, public buildings erected, census provided for, taxes levied, etc., etc.
RKAN
SEAL OF ARKANSAS TERRITORY.
STATE
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HI
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OF
MERCY
AN
SEAL
GNANT
SAS.
SEAL OF THE STATE OF ARKANSAS.
It was enacted that the familiar seal of the Territory, im- pressions and devices unchanged, with the simple addition of the words, "Seal of the State of Arkansas," be retained for the State. This seal remained in use, until the Legislature of 1864, by Act of May 3d, adopted a new seal for the State. The devices on this new seal show an eagle at the bottom,
265
FROM 1836 TO 1840.
holding a scroll in its beak, inscribed "Regnant Populi," a bundle of arrows in one claw and an olive branch in the other ; a shield covering the breast of the eagle, engraved with a steamboat at top, a bee-hive and plow in the middle, and a sheaf of wheat at the bottom ; Goddess of Liberty at the top, holding a wreath in her right hand, a pole in the left hand surmounted by a liberty cap, and surrounded by a circle of stars ; outside of which is a circle of rays ; figure of an angel . on the left, inscribed "Mercy ;"' a sword on the right hand, in- scribed "Justice," surrounded by the words, "Seal of the State of Arkansas." This is the seal at present in use.
It was stipulated by Act of Congress, on the admission of the State into the Union, that the 16th section of each town- ship be granted to the State, for the use of the inhabitants of such township, for school purposes, or when such section had previously been disposed of, then other equivalent sections ; that twelve salt springs be reserved for the use of the State ; that five per cent. of the net proceeds of the sale of govern- ment lands in the State, deducting expenses, be reserved for making public roads and canals ; that five sections of land be granted to complete public buildings ; that two townships be granted for seminary purposes; the State should not interfere with the disposal by the United States of any of its lands, nor to tax them; that non-resident proprietors be taxed no higher than residents, and that all bounty lands, granted for services in the War of 1812, be exempted from taxation for three years from the date of the patents therefor.
These stipulations were acceded to by the General Assembly, in a resolution of October 18th, 1836, and the items thereof became the compact between the State and the General Gov- ernment-irrevocable, except by the consent of the United States.
BANKS.
Financial questions, always vital, appeal with particular em- phasis to most enlightened wisdom, in the earlier history of
266
HISTORY OF ARKANSAS.
communities, with rapidly increasing population, and rapidly multiplying industries. The demands for money, which had been engaging the consideration of Congress and the various Legislatures during the administration of Mr. Van Buren, were claiming increased attention. The single solution which seemed to be suggested by the wisdom of that time for all the financial problems, was found in the one word-bank. The whole country fell under the bank mania. The wildest speculative adventures were called conservative, the forces were working which culminated in widespread financial dis- aster.
It was hardly to be expected, that the pioneers in Arkansas should be wiser than leaders in older States, and the emergen- cies of their people were certainly not less pressing. The particular necessity of the times required the creation of an adequate circulating medium. Many persons had lands, while but few had ready money, and to relieve this stringency seemed to be the first requirement of legislation.
The Legislature of 1836 met the occasion with Banks. Bills were passed, establishing "The Real Estate Bank," and incorporating the "State Bank."
The system under which these banks were created, was that the State should lend its credit as a guaranty for bonds which they should put forth, but that the banks should pay the bonds both in interest and principal as they fell due, thus securing the State against any loss or demand on account of them. In order to create a capital for them to operate upon, the Acts creating them provided, that the State should issue bonds, and deliver them to the institutions, who were author- ized to sell them upon the market only at par, and the pro- ceeds thus obtained should constitute their capital.
In the case of the State Bank, which was exclusively a State institution, whose officers were to be elected by the General Assembly, the capital stock was put at $1,000,000.00.
267
FROM 1836 TO 1840.
The Governor was directed to issue them one thousand bonds of the denomination of $1,000 each, bearing five per cent. at first, but afterwards raised to six.
The proceeds of the sale of the seminary lands, the five per cent. on sales of public lands, all moneys derived from Con- gress, distributing the surplus revenue to the States, and all other State funds, were directed to be deposited in the bank, and constitute a part of its capital. Administrators were permitted to make time deposits of trust funds for dividends. branches of the bank were directed to be opened at Bates- ville and at Fayetteville, each with a capital of $300,000.00.
In the State Bank at Little Rock the names of Major Jacob Brown, United States Army, appeared as President, with John H. Crease, Cashier. At Fayetteville, James Mc- Kisick, President, and Wm. McK. Ball, Cashier; at Bates- ville, D. W. Lowe, President, John Ringgold, Cashier. The doors were all thrown open, and the State was engaged in a general banking business.
January 3Ist, 1843, the entire Institution went into the hands of the Receivers. After a career of five years, the State Banks closed, with liabilities placed at $1,910,023.00, and assets at $1, 176,810.00.
Of the liabilities, $1,295,781.00 was on account of the bonds issued by the State, for which the State stood responsi- ble as endorser. Of the assets, $1,510,619.00 was due from individuals, but few of whom could be expected to pay. The Receivers experienced many trials in the almost fruitless struggle to turn the nominal assets into ready money. The very failure of the banks had precipitated the community into such confusion and disaster, that even where the disposition existed there was small ability.
The reputation of the State suffered greatly. The de- pressed condition diverted emigration. Many, burdened with debt, sought relief in removal to distant parts. Still the Trustees persevered.
268
HISTORY OF ARKANSAS.
The collection of the debts and realizing of the assets of the bank, however, though attended with great delay and loss, yet made some progress. In the Legislature of 1848, the Joint Select Committee reported that they had canceled State bank bonds and coupons to the amount of $156,286.00, and registered Real Estate Bank bonds and coupons to the amount of $120,280.00, total $276,566.00, all of which had been re- ceived in satisfaction of claims of the State Bank. This may be said to be the commencement of the formal extinguish- ment of the State debt on account of these bonds.
This extinguishment of the debt was continued from time to time as means came to hand, but still, in October, 1858, the State accountants, Messrs. William M. Gouge and A. H. Rutherford, reported, in an able and exhaustive report made by them of that date, that the deficit of the bank, after deducting all assets in the least degree available, was still $1, 167,236.00, for which the faith and credit of the State stood pledged, and that on such portion of it as consisted of bonds, interest was accumulating at the rate of $37,710.00 a year.
The Real Estate Bank was organized upon a system in some respectssimilar to the other, yet in many particulars differ- ent. It did a general banking business, but made loans and discounts with only mortgages on lands for security. Its char- ter provided that the capital stock should be two million dol- lars. To raise this amount in money, the Governor was di- rected to issue 2,000 bonds, of one thousand dollars each, bearing interest at five per cent., afterwards raised to six, pay- able in twenty-five years. For the payment of these bonds the faith of the State was pledged. Any person becoming a stockholder in the bank, should have credit to the amount of one-half of his shares, secured by mortgage upon lands of ap- praised value, and any person not a stockholder could secure loans by a mortgage being laid upon his lands. For the pay- ment of loans long time was given, conditioned upon the payment of interest at stated periods. Branches of the bank
.
269
FROM 1836 TO 1840.
were established at Washington, Columbia and Helena, and subsequently at Van Buren.
The entire amount of stock provided for by law was quickly taken-more subscriptions being offered than were authorized to be received.
The two thousand bonds contemplated by the charter were issued by the Governor, and delivered to the officers of the bank. For a long time no market could be found for them. Finally, in September, 1838, five hundred of them, for . $1,000.00 each, were disposed of to the Secretary of the Treasury of the United States, being purchased by him as an investment of the funds of the Smithsonian Institute. One thousand, for $1,000.00 each, to the North American Trust and Banking Company of New York.
The bank at Little Rock opened for business, December 12th, 1838; the branch at Helena, February 15th, 1839; that at Columbia, March 5th ; that at Washington, April Ist. By the 3Ist of October, 1839, these banks had made loans and discounts to the amount of $1, 585, 190.00.
On the 2d of November, 1839, the bank at Little Rock suspended specie payment, although it had in circulation only $156,910.00, with $111,967.00 of coin in its vaults. In ex- planation of the action, it was argued, that it was found im- practicable, on a specie paying basis, to keep in circulation as much money as the necessities of business demanded. The Directors proceeded to put into effect a policy of expansion. Under this policy the bank increased its issues so rapidly that in May, 1849, it had in circulation $759,000.00. This cur- rency very naturally lost its commercial value-falling 35 to 40 per cent. below par.
While the bank was thus extending its circulation and in- creasing its loans and discounts, it did not collect enough in actual funds to pay interest on the State bonds. To meet this and some other demands of a pressing nature, the bank made use of the 500 bonds which they held, and in violation
270
HISTORY OF ARKANSAS.
of the provisions of their charter pledged these bonds, amount- ing to $500,000,00, to the North American Trust and Bank- ing Company, obtaining thereon only $121,336,00. In breach of faith, the North American Trust and Banking Company sold these bonds to James Holford, a banker, of London, receiving from him an advance of $325,000,00. This was a subject of much after-difficulty, the State justly contending that the bank had no right to dispose of the bonds in such way, and the bank contending that the North American Trust and Banking Company had no right to part with them in the manner it did, Mr. Holford contending that he was an innocent purchaser of the bonds, and ought to be paid the full amount of them, with the interest. It is a subject which has come down to our times, and will be more fully noticed hereafter in its appropriate place.
There was a brief and vigorous struggle for the recovery of lost standing, but to little effect, and on the Ist of April, 1842, the . Central Board of the bank passed an ordinance, placing the affairs of the bank in liquidation, by assigning all of its assets to Trustees appointed by the Board. On the 2d of April the deed of assignments was made to fifteen per- sons, all of whom were Directors of the bank. They were, therefore, making an assignment from themselves in one ca- pacity, to themselves in another. From this arrangement the State, the party most in interest, was entirely excluded. From that time the management of the bank's affairs became, as far as she was concerned, what Governor Elias N. Conway in his message to the Legislature of 1854 called "a sealed book."
Very great dissatisfaction with the entire transaction prevailed. The local boards of the bank at Little Rock, and of the several branch banks, for a time resisted the action of the
27I
FROM 1836 TO 1840.
Central Board, and refused to surrender their assets to the . trustees appointed by them. The matter was finally taken to the Supreme Court. Judges Dickinson and Lacy sustained the assignment; Chief Justice Ringo dissented, but in vain. The assignment of interests, so vital to the State, without her voice in the matter, was confirmed, and went into effect.
When the deed of assignment was made, April 2d, 1842, the assets and liabilities of the Real Estate Bank were stated by the officers as follows :
LIABILITIES :
To 1,530 bonds sold and outstanding, . $1,530,000.00
6 per cent. interest on same, then due, ·
75,735.00
Amount received on 500 hypothecated bonds, 122,389.00
6 per cent. interest on same, then due, 7,648.00
Notes issued by the bank, outstanding, 495,725.00
Due to banks and depositors, 165,410.00
Total liabilities, $2,396,907.00
ASSETS-TO MEET THESE DEMANDS :
$53,551.00 Specie in its vault,
Principal and interest of loans on notes and bills, 2,000, 192.00
Real Estate, valued at 34,394.00 ·
Amount due from other banks, 30,242.00
In notes of Arkansas Bank and loaned to State, 364,535.00
Total assets (nominally stated), $2,482,916.00 Excess of assets over liabilities, $86,009.00.
Upon the assembling of the Legislature of 1842, Governor Yell presented the bank matter in a strong light, saying, that the effect of the assignment had but the bank's affairs beyond the scrutiny and control of the State, although the State remained responsible for the payment of interest on the bonds.
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HISTORY OF ARKANSAS.
But all the efforts of Governors and Legislatures to correct the evil failed. For years the Trustees held the field. Until as late as 1853, when the Attorney-General was directed to file a bill in chancery to divest the Trustees of the assets in their possession. This was followed in 1855, by an Act "to aid in bringing to light the true condition of The Real Estate Bank." By this Act the Governor was directed to procure the services of competent accountants to examine the affairs of the bank. Mr. Wm. M. Gouge, of the U. S. Treasury Department, was induced to take hold of the matter, and was ably assisted by William R. Miller. Vast volumes treasure the results of the investigations. The progress of the suit in court was slow, until it became necessary to create a new tribunal to consider it. Accordingly the Legislature, in January, 1855, created a new Court, "The Court of Chancery of Pulaski county, with special jurisdiction in all cases wherein the State is concerned." Hon. H. F. Fairchild was ap- pointed Chancellor. The end came April 20th, 1855, by a decree of the Court of Chancery of Pulaski-the assets of the Real Estate Bank were transfered to C. F. M. Noland, Receiver.
While these matters were in progress, Albert Pike and Ebenezer Cummins, attorneys for foreign creditors, brought a number of suits against the State to enforce the payment of interest on the bonds issued to the State Bank and to the Real Estate Bank. Among them was one in the name of William A. Platenius, administrator of James Holford, deceased, for interest, amounting to $1,000,000.00, on the 500 bonds he had bought from the Trust and Banking Company, com- monly called the "hypothecated" bonds, known to us as the "Holford" bonds, and another, in the same name, on bonds amounting to $500,000.00. The suits were founded merely on copies of the bonds. Samuel H. Hempstead, State Solicitor; defended on the ground that the originals should be produced,
273
FROM 1836 TO 1840.
and this defense being sustained by Chief Justice Taney, in the Supreme Court of the United States, in an opinion ren- dered at the December term of that Court, 1857, the matter found rest for a time.
When the doors of the bank closed, a long struggle was begun to convert the assets into money, but with no better success than in the case of the State Bank. Debtors were unable to pay, however willing ; the debts were made on ten years' time, hence collection could not be enforced before ma -- turity. Many debtors let their lands go for the debts, and many, becoming insolvent, moved out of the State. In gen- eral, but little was accomplished, and in 1858, sixteen years after the assignment, the situation was expressed in the report of Gordon N. Peay, who had become Receiver of the assets since the death of Mr. Noland, as follows: Liabilities, Octo- ber Ist, 1858, $2, 170,132.00; assets, $889,506.00; defic- iency, $1,280,620.00. And for this deficiency the State stood in the attitude of an endorser whose principal has become in- solvent, and has left him with the debt to pay.
The early intervention of the war thereafter prevented any action on the bank matters, until, as far as the lands were concerned, suits having been brought to foreclose the mort- gages on them, Chancellor Yonley, in 1874, made a decree giving fifteen years in which to pay them out by installments ; and as to the bonds, they were comprehended in a general Funding Act, passed by the Legislature in 1869, April 6th, by which all bonds, including the disputed Holfords, were allowed to be exchanged for new bonds, running twenty-five years, bearing six per cent. interest.
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