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Early Michigan Early Banks Of Michigan
As the law required security to be given for the final payment of the bills and all other debts of the bank, their failure left a large apparent liability upon the sureties. Some had given personal bonds only; others had given mortgages on their farms, which threatened to sweep away their lands and leave them penniless.
These mortgages still remain undischarged upon the record, but the supreme court of the state, in 1845, held them to be invalid. The general banking law itself—a statute which inaugurated a system that attracted, for a time, so much notice, and which, with the institutions organized under it, played so important a part in our monetary and financial affairs, was declared (so far as authority to confer corporate powers was concerned) unconstitutional and void. (Green vs. Graves, 1 Doug. 351; and in 1848 the same court held, that a bank director could not be adjudged liable to a creditor of the bank under the provision declaring such liability in the statute. (Brooks vs. Hill, 1 Mich., 118.)
Since these decisions all agitation on the subject has ceased.
Michigan
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