Revenue. 117 



savings and building associations.^ This again increased the revenue 

 of the tax and for the year ending March 31, 1861, the amount 

 received was forty-nine thousand five hundred sixty-one dollars. 

 From March 31, 1852, until March 31, 1861, the taxes on these in- 

 stitutions were two hundred thirty-two thousand three hundred 

 eighty dollars. 



Although before this period the state had imposed the payment 

 of bonuses upon banks as a condition of granting them charters, 

 not much money had been brought into the state treasur}^ 

 Bonuses ^^y ^j^jg expedient, because generally the banks had 

 Banks been directed to pay the required bonus to a particular 

 enterprise. As has already been shown in the treatment 

 of state aid to institutions,^ this policy was continued in this period. 

 In 1853 the state received some revenue from bank bonuses to 

 which no condition in regard to its expenditure had been attached 

 and in 1854 the legislature adopted the policy of requiring all the 

 bonuses to be paid into the state treasury. A resolution was passed 

 that all banks which were chartered during the session, or of which 

 the capital stock was increased within the same time, should pay 

 to the state a bonus of two per cent on the capital thus obtained.^ 

 In 1855 a good opportunity to use the bonus as a means of revenue 

 arose and the legislature did not let is pass. To show how this 

 opportunity arose, it is necessary to refer to banking histor\'. 



In 1852 the legislature passed an act known as the "Free Banking 

 Act." This act permitted any number of persons from twenty- 

 five upward who were residents of the state to engage in banking 

 subject to the terms of the act. No special charter was required. 

 The act also directed the state treasurer to provide for engraving 

 blank circulating notes, in the form of bank notes, of the denomi- 

 nations issued by the incorporated banks of the state. On the face 

 of these notes were to be stamped the words, " Secured by the pledge 

 of Public Stocks." The banking associations or corporations formed 

 under this act, upon depositing with the state treasurer certain 

 specified public securities, were entitled to receive an equal amount 

 of these circulating notes and could use them as bank notes. In 

 case any bank failed to redeem its notes, the state would redeem 

 them by means of the securities received from that bank.^ Three 

 years later the legislature passed an act by which any of the "free 



1 Public Acts, May 1859, chap. 67. 



2 Cf. pp. 106-110. 



3 Private Acts, 1854, p. 53. 



^ Public Acts, May 1852, chap. 23. 



