National Affairs: Mississippi Skeleton

In June 1838, the Sovereign State of Mississippi sold $5,000,000 worth of bonds to pay for 50,000 shares in Union Bank of Mississippi. In less than two years the bank was hopelessly insolvent. In 1842 the Mississippi Legislature denied that the State was under legal or moral obligation to pay the bonds in question. Thus occurred the first repudiation of a State debt. Similarly, in 1839 Mississippi defaulted interest on a bond issue sold in 1831-33 to raise funds for another State bank. Although the courts ruled against Mississippi in both cases, in...

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