A BOOM.
About this time there was one of those periodical
booms, which Henderson has so often experienced, and by which up to this
time she has been so little benefitted[sic]. Land and town lots---(to use
a common expression), went cleat out of sight, and wages out of all
reason. The people seemingley went wild, and fully ten or fifteen houses
were built during the year.
This was one of the years, for which the civil history
of Kentucky is memorable, by the dreadful monetary derangement which lead
to the passage of the relief laws, and gave rise to the most embittered
and violent conflict of parties of the civilized world were in a painful
state of disorder. The long wards of the French revolution had banished
gold and silver from circulation as money, and had substituted an inflated
paper currency, by which nominal prices were immensely enhanced. At the
return of peace, a restoration of specie payments, and the return of
Europe to industrial pursuits, caused a great fall in the nominal value of
commodities, accompanied by bankruptcy upon an enormous scale. In Kentucky
the violence of this crisis was enhance by the charter of fourty
Independent banks, with an aggregate capital of nearly ten millions of
dollars, which were by law permitted to redeem their notes, with the paper
of the bank of Kentucky, instead of specie. These banks were chartered at
the Session of 1817-18. Every little town and village in Kentucky wanted a
bank, and Henderson was among the foremost. On January 26, 1818, an act to
establish independent banks in this Commonwealth was approved.
FIRST BANK.
Among the number is the following : "A bank, to be
denominated the Bank of Henderson, in the Town of Henderson, with a
capital of one hundred and fifty thousand dollars, to be divided into one
thousand five hundred shares of one hundred-dollars each, under the
direction of Samuel A. Bowen, James Wilson, James Hillyer, Walter Alves,
Nicholas C. Horseley, Leonard Lyne and Wyatt H. INgram, or a majority of
them, for the sale of stock, and continue open for sixty days, unless the
stock is sooner taken up." The subscribers, their successoers and
assigns were made a corporation and body politic in law, and in fact, by
the anem and style of the President, Directors and Company, of the Bank of
Henderson, and were authorized to continue until the last day of December,
1887.
This bank was given plenary, or full banking powers,
and directed, as soon as one-fifth of the capital stock was actually
received on account of the subscriptions, to give notice in two
newspapers, printed in the State, to notify a time and place in the town,
giving at least thirty day's notice for proceeding to the choice of a
president and eight directors. The Board of Directors were invested with
all power usually given officers of such corporations. The bank notes
thrown into circulation, were restricted to three times the amount of
capital, over and above the moneys then actually deposited in the bank,
and in case of excess, the directors shall be individually liable for the
same. Under this act, the Bank of Henderson organized, with what amount of
paind up capital, it has been impossible to ascertain. Captain Samuel
Anderson was elected the first president, and James Hillyer the first
cashier. Monied transactions were pretty heavy in those days, as is
evidence by old notes appearing her and there, in old time papers, now
worthless.
The Bank of Henderson commence business in a two-story
log house, which stood on the southeat corner of Main and Second Streets,
and at the same time commenced the building of a brick banking house on
Main Street. As a great many corporations have foolishly done before, the
directors of this bank concluded to furnish all materials, and pay for all
labor by the day, or by the job, as the case might be. Moses Morgan and
John Mason were employed to do the woodwork, and Francis Hammill, the
brick-work. The lumber was purchased from the "Henderson Steam MIll,"
operated by John Audubon & Co., and the brick manufactured by the company.
As a consequence of this plan, the house cost a third more than it ought
to have cost, and the building committee engaged in a continued dispute
with the workmen. Francis Hammill's bill was disputed, and by agreement,
submitted to John Lewis and Charles Peck, brick masons, who after calmly
considering and investigating, gave Hammill more than be claimed. Another
trouble, was the delay in getting work done. Most of the directors had a
hand in the building, yet everyone of them charged liberally for all he or
they did. This building, which is now known as the Kerr, Clark & Co.
Counting Room, was begun in May, 1818, and completed the latter part of
1819. The following is the estimate made by Lewis and peck[sic], of the
number of brick used :
Amount of brick in the Bank House, Henderson :
Basement
story...............................................................
32,410
First
story.......................................................................
63,570
Second
story..................................................................
43.580
Parapet
walls..................................................................
10,136
Vault..............................................................................
19,800
Shaft of
chimney.............................................................
1,575
171,071
Deduction for
chimney....................................................
3,000
158,071
" JOHN LEWIS,
" CHARLES PECK."
Francis Hammill's bill for brick work, which was
allowed by the committee of arbitration, was three dollars per thousand
for laying in the wall, twelve arches at three dollars each, and one arch
at five dollars. this was the arch over the front door. The following is
one of Audubon's bills :
"To the President and Directors of the Bank of
Henderson, to Henderson Steam Mill.
To three pieces of scantling, 56 feet, at
41/2c...................................... $2 52
To two pieces of scantling, 34
feet......................................................
-----
To sixty rafters. 714 feet, at
4c...........................................................
28 56
To five pieces scantling, 40 feet, at
3c.................................................
1 20
To fifteen joints, 2781/2 feet,
6c.........................................................
16 71
$48 99
J. J. AUDUBON & CO."
The putty---thirty pounds used in glazing, cost forty
cents per pound, only thirty-six cents per pound more than the same
material is worth at this time. In the same summer of 1818, when the Bank
of Henderson commenced business, the State was flooded with paper money,
and to add to this financial uncertainty, our bank turned loose a goods
boxfull{sic] of her notes. With this, speculation sprung up in all
directions, large loans were rashly made, and as rashly expended. Most of
these financial bubbles exploded within one year, and only a few were
alive at the end of two years. Following in the wake of the unfortuniates,
the Bank of Henderson, after two years of unsuccessful business, turned
her toes to the daisies, and effected a settlement as best she could. In
the meantime, the pressure of debt became terrible, and the power to
replevy judgments was extended by the Legislature, from three to twelve
months, by an act passed at the session of 1819-20.
The following bit of history, as much to be applied to
Henderson as any other county, is reproduced simply to give the reader a
faint idea of the frightful condition of monetary affairs throughout
Kentucky, after the forty banks had been incorporated and let out their
circulating issue. During the year 1819, this monetary distress became
more and more alarming, and in the summer of 1820, the cry for further
relief became overwhelming. Vast majorities of both houses of the
Legislative were pledged to some measure which should relived the debtor
from the consequences of his rashness. The reign of political quackery was
in its glory. The sufferings of the patient were too acute to permit him
to listen to the regular physician, who prescribed, time, industry
and economy as the only honest and just remedy. He turned eagerly
to the quacks, who promised him instantaneous relief, by infallible
nostrums, and specifics without pain, without self denial, and without
paying the penalty which nature always imposes upon any gross violation of
her laws. The great cry of the people was, more money, and their
heaviest complaint was, debt: Therefore the Legislature of 1820-21
chartered the bank called the "Bank of the Commonwealth," which was
relived from all danger of suspension, by not being required even to
redeem its specie. Its paper was made payable and receivable for public
debts and taxes, and certain lands, owned by the State, south of Tennessee
River, were pledged for the final redemption of its notes. Its business
was to pour out paper in profusion, in order to make money plenty. The
creditor was required to receive this bank paper in payment of all his
debts, and if he refused to do so, the debtor was authorized to replevy
the debt for the space of two years. By more mad legislation, the paper of
the new bank sank rapidly to one-half its nominal value, and the creditor
had his choice of two evils--one was to receive half of his debt in
payment of the whole, and the other was to receive nothing at all for two
years, and at the end of that time, do the best he could, running the risk
of new delays at the end of that time, and the bankruptcy of his
securities. The indignation of the creditor at this wholesale confiscation
of his property, can be imagined, and as a consequence, society rapidly
arranged itself into two parties, called Relief and anti-Relief. The
constitutionality of the Commonwealth Bank act was tested and decided
against the State. This decision created intense indignation among the
debtor class, which was at that time in a large majority. An appeal was
taken to the Court of Appeals, and the question came directly before them
at the fall term, 1823. Their decision was awaited with intense anxiety by
all parties. Terrible denunciations of popular vengeance in advance, if
they dared to thwart the will of a vast majority of the people, were
intended to warp their judgments or operate upon their fears. The Judges
had maintained an unbroken silence, but when called upon, delivered their
opinion seriatim and at length, calmly concurring with their
brethren of the Circuit Court, that the act was in violation of the
Constitution of the United States and totally void. The opinion created an
immense sensation throughout every county of the State, and the conflict
of parties was renewed with redoubled fury.
The majority now determine to sweep from their path,
and make an example to future ages, of the three calm and recluse
students, who had dared to set up reason against rage, and the majesty of
truth and law against the popular will. The great majority had been
accustomed to make and unmake, to set up and pull down at its soveriegn
will and pleasure. The judiciary, by the Constitution, held their offices
during good behavior and nothing less than two-thirds of both houses could
remove them.
The canvass of 1824 was conducted with the hope of
obtaining this result. General Joseph Desha, candidate of the relief
party, was elected by the large majority, a vast majority of both houses
were on the relief party. At the following meeting of the Legislative bar
and assigned reasons at length for their decision. This was unsatisfactory
to the crazed majority, and a vote was taken to remove the Judges of the
Supreme Court, but a constitutional majority of two-thirds could not be
obtained. They found they could not remove the Judges by impeachment or
address, because their majority, although large, was not two-thirds of
each house, but they could repeal the act, by which the Court of Appeals
had been organized and could pass an act organizing a new court.
A bill to this effect was drawn up and passed by a
large majority in the House of Representatives, and by a nearly equal
majority in the Senate. No time was lost in organizing the new court, the
old court, however, denied the constitutionality of the act, and still
continued to sit as a Court of Appeals. A large majority of the bar of
Kentucky recognized them as the true court, and a great majority of the
Circuit Court Judges obeyed the mandates as implicitly as if no
reorganizing act had passed. The title of parties now changed from relief
and anti-relief to old court and new court.
Great activity was exerted in the canvass of 1825, and
never were the passions of the people more silently excited. The result
was the triumph of the old court party by a large majority in the popular
branch of the Legislature, while the Senate still remained attached to the
new court.
In the canvass of 1826 both parties arrayed in final
struggle for the command of the Senate, and the old court party again
triumphed. AT the ensuing session of the Legislature the obnoxious act was
repealed, the opinion of Governor Desha to the contrary, and the three old
Judges re-established de facto as well as de jure. Their
salaries were voted them during their forcible and illegal removal from
office, and all acts of the new court treated as a nullity. This certainly
was one of the most signal triumphs of law and order, over the fleeting
passions of people, which has ever been recorded in the annals of a free
people.
The fate of the Commonwealth Bank, and its almost
unlimited amount of worthless paper currency, and the replevin[sic] laws
connected with it, was forever sealed by the triumph of the old court
party. The replevin laws were repealed, and the bank extinguished by
successive acts of the Legislature, which directed that its paper should
be gradually burned, instead of reissued. In a few years, its paper
disappeared from circulation. New banks were afterwards chartered and
another vast quantity of paper money put afloat to stimulate the wildest
spirit of speculation. Everybody rushed into the market to borrow money to
carry out some pet thought or wild scheme, but this fabric was too
baseless, and unreal to endure. IN the spring of 1837, all of the banks of
Kentucky suspended specie payment. In this state of things the Legislature
of 1837 met and legalized the suspension of the banks. By the exercise of
superior business tact, the financial condition of things was again
brought to a satisfactory conclusion, and the counties of the State again
took on new life. During these troublous times Henderson County was
fortunate to be represented by Leonard H. Lyne, Samuel G. Hopkins and
Judge George Morris. Henderson County's history during this time, and
since, is so closely interwoven with that of the State ithat it would be
impossible to give a satisfactory view of the subjects which engrossed the
attention of the people, without entering into details forbidden by the
plan of an outline sketch like this. It is safe to say, however, that
political relief and anti-relief, old and new court, excitement ran as
high in Henderson as in any other county in the State, but from the
character of men elected to represent the county during the time, we may
safely conclude that Henderson stood by the honor of the States, and was
enrolled with those, whose inherent attachment to sober and rational
liberty guied them in every action, public or private.
History of Henderson County, Kentucky
by Edmund L. Starling
p. 146-155
published in 1887
public domain material
