As he received from the government, soon after making this deposition, about $io,000 to liquidate claims for his expense in Tripoli, which he had long pressed in vain, his good faith has been doubted.
Other items were afterwards added to liquidate other obligations than those included in the above, chiefly on account of the internal debt.
Territorial mandates were now tried, which inspired no greater confidence, but served to liquidate two-thirds of the debt, the remaining third being consolidated by its dependence on the Grand Livre (September 30, 1797).
The constitution prohibits the legislature from lending the state's credit or incurring an indebtedness for current expenses in excess of $1,000,000 or incurring any indebtedness whatever, other than for war purposes, unless such indebtedness be authorized by law for " some single work or object," the law to be approved by the people at a general election and providing for a direct annual tax sufficient to pay the interest and to liquidate the debt within eighteen years.
The diminution was due to the law of the 10th of April 1893 upon the banks of issue, by which they were obliged to liquidate the loan and mortgage business they had previously carried on.
Since federation no chartered bank has been compelled to liquidate without paying its note-holders in full.