Missouri Bicentennial Minutes: The “Solemn Public Act” and Loan Office Act Pass
The special session of the General Assembly, on June 26, 1821, passed an act prohibiting enactment of any law excluding any citizen from enjoyment of the privileges and immunities to which such they were entitled under the U.S. Constitution. Missouri abided by this until 1835, when a law passed that required free persons of color apply for a freedom license.
The special session also attempted to deal with economic challenges of the panic of 1819. Four relief acts passed: providing for some land holders to redeem land sold for debt, abolishing imprisonment for insolvent debtors, and exempting certain family possessions from executions for debt. The fourth was the most controversial, likened by one historian to “making something from nothing.” The General Assembly sought to alleviate the lack of currency by creating loan offices.
Five loan office districts, at Chariton, Boonville, Franklin, St. Louis, and Jackson, each managed by three commissioners, issued certificates to a face value of $200,000. These were good for payment of taxes and debts to the State, and served as tender for payment of salaries and fees by the state. Individuals could receive secured loans of $1000 on land and $200 on personal property.
The scheme failed. Security on loans proved inadequate, and subsequent litigation increased opposition. By November 1822, the General Assembly forbade issuance of more certificates. Legal challenges to the certificates ended with a U. S. Supreme Court ruling in 1830 finding that the loan office was unconstitutional, affirming the prohibition of states to issue bills of credit. The end result was Missouri holding a debt on loan office certificates it would not repay until 1834.