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Early Michigan Early Banks Of Michigan
These, instances are sufficient to show the gross fraud which tainted the inception of too many of these organizations. The men who got them up had no capital to invest in legitimate banking business, but many of them were unscrupulous and needy adventurers who established banks on fraudulent certificates that they might obtain the notes of the institution for their private benefit. Some of these fraudulent certificates were issued by chartered banks, and some by associations organized under the general banking law. Under such a practice a single bank could, without the expenditure or even the possession of a dollar, have supplied the means for the payment of the thirty per cent, necessary to put into operation a bank in every hamlet in the state.
The furnishing of these certificates of deposit and the loaning of specie to be used in organizing and putting into operation these banks, or to be presented as assets when examinations were made by the bank commissioners, appears to have assumed the character of a regular business, and it is said that large sums were sometimes paid for the facilities thus furnished. Whether a regular tariff of prices was adopted, or such sum paid as could be extorted from the urgency of the applicant in each case, it is certain from the frequency with which their names appear in these reports that certain institutions and individuals must have made it a source of no inconsiderable profit.
Michigan
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