Wolf Scalps, Murder, and the Real Estate Bank

Wolf scalps??The birth of the Real Estate Bank of Arkansas was marked by a very public murder.

The bank, established by the 1836 Arkansas Constitution, was conceived and operated as a mechanism for the wealthy planters of the cotton-growing south and east to plunder the state—and the state’s most powerful politicians were among the plunderers.  It was a semi-private corporation: private in that the stockholders, who controlled the bank, received all of the profits, and public in that the state assumed all of the risks. (This particular combination is not unknown among the banks of our own era.) Its initial capital consisted of bonds issued by the state, and it could issue additional bonds which would also be guaranteed by the state.

Stock in the bank could be purchased with land, including mortgaged land, buildings, or even crops.  The men who appraised the land, however, were in the pay of the stockholders, and the land, sometimes not in cultivation or even suited for cultivation, was often grossly overvalued.  Stockholders – a small group, pretty much limited to Arkansas’ political elite and their friends – could use their stock as collateral for loans with which to purchase more land, sometimes multiplying their original investment several times over.  (Substitute “collateralized mortgage obligations”  for “overvalued land” and you begin to get the idea.)

The murder in question occurred in December of 1837, at a point when allegations of fraudulent land valuations had already begun to appear.  The bank President, John Wilson, was also the Speaker of the House of Representatives, and had acquired a well-deserved reputation for corruption in connection with bounties offered for wolf scalps.  When a bill providing that certificates for wolf scalp bounties should circulate as legal currency came to the floor,  Representative J. J. Anthony, a ferocious opponent of the bank, offered an amendment.  The amendment specified that those certificates should be signed by the President of the Real Estate Bank— a deliberate insult to Wilson.

Wilson left the podium, drew his Bowie knife, and advanced on Anthony, who drew his own knife.  A fight ensued, which ended with Anthony stabbed in the stomach and bleeding to death on the House floor.  At the trial, which took place several months later, Wilson was acquitted; the jury found that Anthony had violated parliamentary procedure and the rules of good order by insulting him.  Wilson then took the jury out for drinks, to the accompaniment of cheers from the crowd.  In the course of the trial it was revealed that Wilson had been carrying a loaded pistol, brought to the State House that day for the express purpose of seeking “satisfaction”  from a different legislator for a different insult.

The Real Estate Bank survived for barely another three years, finally collapsing in 1841 from a combination of fraud, fantasy finance, incompetence, and a nationwide depression.  The directors appointed themselves as receivers, kept the remaining money, and refused to turn over the books.



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