Real Estate Bank of the State of Arkansas

From FranaWiki

The Real Estate Bank of the State of Arkansas was one of the first two banks established by act of the State of Arkansas in its Constitution of 1836, the other being the Bank of the State of Arkansas. The Real Estate Bank was established to help planters and farmers by providing them with a pool of state-secured credit.

The Real Estate Bank was founded with $2 million in capital just before Christmas of 1838. The main branch of the bank was located in Little Rock, and opened on December 12, 1838. Other branches were located at Helena, Washington, and Columbia. The Governor appointed Elliott H. Fletcher the first commissioner of the bank. William W. Stevenson became president pro tempore, and William Cummins the bank's attorney.

State government officials provided almost no oversight of the Real Estate Bank, and it quickly succumbed from inadequate management, fraud, and a national economic panic. The panic brought the price of real estate in the state down dramatically, and much of the assets of the bank had been secured by using land as collateral. Among the losses suffered by the bank was most of the monetary bequest of British citizen James Smithson earmarked for what would eventually become the Smithsonian Institution. The money had been deposited in the bank by the U.S. Treasury Department on the advice of Arkansas senator Ambrose H. Sevier.

The Real Estate Bank was liquidated for abuses of its charter on July 29, 1844, and the running of the bank assumed by trustees selected by members of the Arkansas General Assembly. After the failure of both the Real Estate Bank and the Bank of the State of Arkansas the legislature barred all new banking in the state. This first amendment to the state constitution would remain in effect until the time of Reconstruction.

Controversy over the clearing of bonds issued by the Real Estate Bank, called Holford bonds, continued for decades. Control of the bank's balance sheet passed into the hands of Colonel Gordon N. Peay on April 25, 1855. After Peay died in 1876 receivership passed to William Booker Worthen. All business of the Real Estate Bank was transferred to the Commissioner of State Lands in January 1881.


  • Tom Dillard, "Banking the Wild Old Way," Arkansas Democrat-Gazette, August 23, 2009.
  • William Booker Worthen, Early Banking in Arkansas (Arkansas Bankers' Association, April 1906), 1-41.

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