The Holford Bonds were a series of real estate bonds that have their roots in the founding of the state and created political turmoil in Arkansas as late as 1906.
Arkansas joined the union in 1836 right on the eve of the panic of 1837. The original Arkansas State constitution called for the creation of two banks. The State Bank of Arkansas, meant to loan money to individuals, and the Real Estate Bank of Arkansas, which was a land grant bank typical of those seen in other states such as Florida and Mississippi at the time. The two banks were chartered during the first legislative session and opened for business in 1838, but by 1840 the State bank had failed. Its bonds were then issued to the Real Estate bank.
The Panic of 1837 was a financial crisis in the United States that touched off a major recession that lasted until the mid-1840s. Profits, prices, and wages went down while unemployment went up. Pessimism abounded during the time. The panic had both domestic and foreign origins. Speculative lending practices in western states, a sharp decline in cotton prices, a collapsing land bubble, international specie flows, and restrictive lending policies in Great Britain were all to blame. On May 10, 1837, banks in New York City suspended specie payments, meaning that they would no longer redeem commercial paper in specie at full face value. Despite a brief recovery in 1838, the recession persisted for approximately seven years. Banks collapsed, businesses failed, prices declined, and thousands of workers lost their jobs. Unemployment may have been as high as 25% in some locales. The years 1837 to 1844 were, generally speaking, years of deflation in wages and prices.
The Real Estate bank was unable to sell the bonds but was able to use them as collateral for $121,000 loan with the North American Banking and Trust Company of New York. The legality of this was questionable because they were being used below their face value, which was against the original bonds condition. Without waiting for the state to redeem the loan, and in a breach of good faith the bonds were sold to James Holford, a banker in London, England for $325,000. Then after they were known as "The Holford Bonds". The New York trust company would soon fail having stolen over $200,000 from the state of Arkansas through this deal.Holford then sought to make back the money by suing the state of Arkansas for $250,000, filing in both Arkansas and New York.
Then the Real Estate bank failed and the ownership of the bonds was transferred to the state. The question then became whether or not the state was legally obligated to refund these bonds at face value or even at all since they were now surrounded by legally questionable deals and bad faith. The ordeal turned the state against banking, and an amendment was added to the constitution in 1846 prohibiting the state from chartering another bank.
In the reconstruction era, the issue of refunding the bonds along with the infrastructure bills would be the centerpiece of Republican policy. The bonds were tied up in a lot of real estate in the state and the carpetbagger government was looking for ways to fund infrastructure projects, many of which turned out to be phony ways to funnel money into their own pockets. The Arkansas legislature passed laws to refund the bonds on April 6, 1869with 30 years interest. Afterward they were contested on the grounds of there being fraud and breach of faith in their sale by the trust company. Governor Baxter's veto of a refunding bill that included the Holford bonds would tip off the Brooks-Baxter War in 1874. It wasn't until 1884 that the Fishback Amendment, named for its author William M. Fishback of Fort Smith, Arkansas, was passed prohibiting their payment, and added to the Constitution of Arkansas.
In the history of the United States, carpetbagger was a derogatory term applied by former Confederates to any person from the Northern United States who came to the Southern states after the American Civil War; they were perceived as exploiting the local populace. The term broadly included both individuals who sought to promote Republican politics, and those individuals who saw business and political opportunities because of the chaotic state of the local economies following the war. In practice, the term carpetbagger was often applied to any Northerner who was present in the South during the Reconstruction Era (1863–1877). The term is closely associated with "scalawag", a similarly pejorative word used to describe native White southerners who supported the Republican Party-led Reconstruction.
Fort Smith is the second-largest city in Arkansas and one of the two county seats of Sebastian County. As of the 2010 Census, the population was 86,209. With an estimated population of 88,037 in 2017, it is the principal city of the Fort Smith, Arkansas-Oklahoma Metropolitan Statistical Area, a region of 298,592 residents that encompasses the Arkansas counties of Crawford, Franklin, and Sebastian, and the Oklahoma counties of Le Flore and Sequoyah.
The Constitution of the State of Arkansas is the governing document of the U.S. state of Arkansas. It was adopted in 1874, shortly after the Brooks-Baxter War. It replaced the 1868 constitution adopted by the legislature following the end of the American Civil War and under which Arkansas rejoined the Union.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions. The FDIC was created by the 1933 Banking Act, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years. Since the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2011, the FDIC insures deposits in member banks up to US$250,000 per ownership category.
The Whitewater controversy, Whitewater scandal, or simply Whitewater, was an American political controversy of the 1990s. It began with an investigation into the real estate investments of Bill and Hillary Clinton and their associates, Jim McDougal and Susan McDougal, in the Whitewater Development Corporation. This failed business venture was incorporated in 1979 with the purpose of developing vacation properties on land along the White River near Flippin, Arkansas.
MBNA Corporation was a bank holding company and parent company of wholly owned subsidiary MBNA America Bank, N.A., headquartered in Wilmington, Delaware, prior to being acquired by Bank of America in 2006. In December 2016, UK-based Lloyds Banking Group purchased MBNA from Bank of America for £1.9 billion. It was the world's largest independent credit card issuer, specializing in affinity cards. MBNA was founded in 1982 as Maryland Bank, N.A., a subsidiary of Maryland National Bank. The letters N.A. stood for National Association. In 1989, Maryland Bank was renamed MBNA America Bank. MBNA Corp. spun off from Maryland National and became an independent company in 1991. Maryland National was acquired by NationsBank in 1993.
The Brooks–Baxter War was an armed conflict in Little Rock, Arkansas, in the United States, in 1874 between factions of the Republican Party over the disputed 1872 state gubernatorial election. The victor in the end was the "Minstrel" faction led by Elisha Baxter over the "Brindle Tail" faction led by Joseph Brooks.
Elisha Baxter was the tenth Governor of the State of Arkansas.
William Meade Fishback was the 17th Governor of Arkansas and U.S. Senator-Elect for Arkansas.
A mortgage-backed security (MBS) is a type of asset-backed security which is secured by a mortgage or collection of mortgages. The mortgages are sold to a group of individuals that securitizes, or packages, the loans together into a security that investors can buy. The mortgages of a MBS may be residential or commercial, depending on whether it is an Agency MBS or a Non-Agency MBS; in the United States they may be issued by structures set up by government-sponsored enterprises like Fannie Mae or Freddie Mac, or they can be "private-label", issued by structures set up by investment banks. The structure of the MBS may be known as "pass-through", where the interest and principal payments from the borrower or homebuyer pass through it to the MBS holder, or it may be more complex, made up of a pool of other MBSs. Other types of MBS include collateralized mortgage obligations and collateralized debt obligations (CDOs).
Bankers Trust was a historic American banking organization. The bank merged with Alex. Brown & Sons before being acquired by Deutsche Bank in 1999.
A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by real property. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans, starting at 7.7%, because of the higher risk and shorter duration of the loan.
The main elements of Japan's financial system are much the same as those of other major industrialized nations: a commercial banking system, which accepts deposits, extends loans to businesses, and deals in foreign exchange; specialized government-owned financial institutions, which fund various sectors of the domestic economy; securities companies, which provide brokerage services, underwrite corporate and government securities, and deal in securities markets; capital markets, which offer the means to finance public and private debt and to sell residual corporate ownership; and money markets, which offer banks a source of liquidity and provide the Bank of Japan with a tool to implement monetary policy.
Regions Financial Corporation is a bank and financial services company headquartered in the Regions Center in Birmingham, Alabama. The company provides retail and commercial banking, trust, securities brokerage, mortgage and insurance products and services.
Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. Real estate is an asset form with limited liquidity relative to other investments, it is also capital intensive and is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment. The primary cause of investment failure for real estate is that the investor goes into negative cash flow for a period of time that is not sustainable, often forcing them to resell the property at a loss or go into insolvency. A similar practice known as flipping is another reason for failure as the nature of the investment is often associated with short term profit with less effort.
The W Holding Company was a financial holding corporation located in Mayagüez, Puerto Rico. On April 30, 2010, Westernbank, its wholly owned bank subsidiary, failed and its deposits and assets were seized by the Federal Deposit Insurance Corporation and subsequently sold to Banco Popular de Puerto Rico.
Refund Home Loans was an Australian mortgage services company founded by Wayne Ormond in 2004. The company created a franchised network of work from home mortgage brokers. After issues with the regulator for breaching trading practices in 2009 it got into financial difficulties. In October 2011, Refund Home Loans announced that the business was going into administration and in June 2012, the remains were sold to rival Australian mortgage company Homeloans Ltd.
IberiaBank Corporation, stylized as IBERIABANK, is an American financial holding company headquartered in Lafayette, LA and the largest bank based in Louisiana. Founded in 1887, it now has over 250 combined offices in 10 states primarily throughout the South. The company has eight locations with representatives of IBERIA Wealth Advisors in four states, and one IBERIA Capital Partners, L.L.C. office in New Orleans.
Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921), was a United States Supreme Court case that helped define the range and scope of federal question jurisdiction in state corporate law matters. The case dealt with whether or not a district court had the power to uphold the constitutional validity of the Federal Farm Loan Act of 1916.
In finance, the notion of traditional investments refers to putting money into well-known assets with the expectation of capital appreciation, dividends, and interest earnings. Traditional investments are to be contrasted with alternative investments.
Rogers Caldwell was an American businessman and banker from Tennessee. He was known as the "J. P. Morgan of the South." He was the founder and president of Caldwell and Company and its subsidiary, the Bank of Tennessee. He was the president of the Tennessee Hart-Parr Company, which sold tractors in the Southern United States, mechanizing agriculture, and the president of the Kentucky Rock and Asphalt company, which built infrastructure and roads in Tennessee. With his friend and business associate politician Luke Lea, he owned newspapers in Tennessee.
CenTrust Bank, A State Savings Bank was a Miami, Florida-based savings and loan. Its failure in 1990 was one of the largest and costliest failures of the savings and loan crisis.