Abraham Lincoln in Illinois
A Selection of Documents from the Illinois State Archives
DOCUMENT 5AMENDMENT TO A BILL FOR AN ACT SUPPLEMENTAL TO AN ACT TO INCORPORATE SUBSCRIBERS TO THE BANK OF THE STATE OF ILLINOIS
December 22, 1835
One of the most controversial issues in the early years of Illinois was the operation of a state bank. In 1821, the General Assembly created a state bank with four branches that could issue paper bank notes and make loans. At the time, the United States government did not print paper currency and coins minted by the federal government were scarce on the frontier. One of the purposes of the state bank was to solve the shortage of money that hindered the buying and selling of goods. However, because the state bank lent out more money than it took in from deposits, it went out of business in five years, leaving the state in great debt.
In 1834, the legislature created another state bank in order to solve the same frontier problems. Lincoln supported the idea of a state bank, in large part because the money lent out by the bank would fund internal improvements, something he felt the frontier state needed. This document is an amendment sponsored by Lincoln to the legislation creating the state bank. He thought the amendment was needed to make the bank more accountable for its actions. This amendment failed to pass and, like its predecessor, the second state bank also went bankrupt.
Points to Consider
Why would coin money be scarce on the frontier?
How might early settlers obtain goods and services if they didn't have money?
What things did Lincoln want to require the state bank to do in order to keep its charter?