In 1837 a law was passed by the Legislature for incorporating the "Union
Bank of Mississippi," with a capital of fifteen million five hundred
thousand dollars, "to be raised by means of a loan to be obtained by the
directors of the institution." In order to secure this loan, the
stockholders were required to give mortgages on productive and
unencumbered property, to be in all cases of value greater, by a fixed
ratio, than the amount of their stock. When the stock had been thus
secured, as a further guarantee for the redemption of the loan, the
Governor was directed to issue bonds, in the name and behalf of the
State, equal in amount to the stock secured by mortgage on private
property. No bonds as thus directed were ever issued.
This act was duly promulgated to the people, and duly reenacted by the
succeeding Legislature on the 5th of February, 1838, in strict
accordance with the Constitution.
Ten days afterward, however, viz., on the 15th of February, the
Legislature passed an act _supplemental_ to the act chartering the Union
Bank, which materially changed or abolished the essential conditions for
the pledge of the credit of the State. By this supplemental act the
Governor was instructed, as soon as the books of subscription should be
opened, to "_subscribe for_, in behalf of the State, fifty thousand
_shares of the stock of the original capital of said bank_, to be paid
for out of the proceeds of the State bonds to be executed to the said
bank, as already provided for in the said charter.
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