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Representatives in the session of 1843. The testimony as submitted with the report is but an abstract of that given in the majority report of committee of the House, and as the essentials of the testimony have been stated above it is not necessary to insert the abstract here. The testimony is summed up as showing:
That the corporators have misused their charter, because they had perpetrated a fraud upon the people by not paying in the capital stock in accordance with the law of Congress confirming the charter, which provided that no bills or notes should be issued until one half of the capital stock shall have been actually paid in. That until the capital stock was actually paid in by the stockholders in the legal currency of the United States it did not have a legal existence as a corporation. That this was a condition precedent to legal existence; but instead of paying in legal coin of the United States, they gave their own notes and commenced the business of banking. They claimed at that time, and now claim, the right to exercise the corporate privileges conferred upon them in direct defiance of the law granting the corporate existence.
2nd. Persons have been elected directors of the bank who were not bona fide owners of the stock, when the law of Congress, confirming the charter, declares that “the directors shall all be stockholders in the institution." That the law did not contemplate nominal stockholders—persons who did not really have an interest or a responsibility in the affairs, who were merely directors for the owners of the bank; but the spirit of the law was that they should be persons who had an interest in the business affairs of the bank through a real ownership of its stock.
3rd. That the bank had suspended specie payment from March, 1841, to July 1st, 1842, and after paying specie for a week “again suspended for a great length of time."
This was contrary to the provisions that the bills “ obligatory, and of credit, notes and post notes, when demanded at their banking house should be paid in the legal coin of the United States."
The refusal to pay specie for its bills was clearly a violation of this provision. As evidence that the suspension of specie payments by banks having similar charters had been considered by the Legislatures of many different States, it was only necessary to recall the large number of acts legalizing suspension “ that had been passed by them in the last few years. And then the committee added_acts which will stand forever recorded upon their statute books to condemn and disgrace those who passed them."
The Miners' Bank of Dubuque does not deny but what it has so abused and misused its charter by the suspension of specie payments; still its officers had urged that the Legislative Assembly of Iowa does not have the power “to annul, vacate and make void the charter until the acts of forfeiture have been judicially investigated and declared by a court of competent jurisdiction.” The rule here contended for by the bank does not hold in that the right is specifically reserved to the Legislature. The committee quote in substantiation of their ground Chancellor Kent: “If a charter be granted and accepted with that reservation, there seems to be no ground to question the validity and efficacy of the reservation." To hold that forfeiture could not be worked until judicial sanction was given would render inoperative the provision of the charter authorizing the Legislature, under certain conditions, to revoke it. Was it the intention of the Legislature to simply reserve the right for its successors to confirm the decrees of the courts revoking the charter, or to reserve the power to revoke it themselves? The spirit of the charter is to reserve the right to the Legislature to repeal it “whenever they ascertain the conditions of the same to be violated."
The committee deem that under the Organic Law the repeal of the charter is a rightful subject of legislation; that the corporation has abused the provisions of the charter by not paying in the capital stock as provided by law, and by the election of directors with no real interest in the bank, and by the refusal to pay specie, when demanded, for its notes.
On these grounds the committee feel that the charter should be repealed, “that the people of this Territory may not be hereafter injured and defrauded by an institution which has heretofore been so regardless of the law and the interests of our citizens."
The report of the committee was concurred in; and the bill was then read the second and third time and passed by a vote of 12 yeas to i nay.
1 Journal of Council, 7th Legislative Assembly of the Territory of Iowa, p. 40.
On motion two hundred and forty copies of the report of the Committee on Incorporations were ordered printed for distribution.
As shown by the certificate of the Secretary of the Territory, dated May 21, 1845, the act repealing the charter of the Miners' Bank was presented to the Governor on the 15th of May, and after being retained by him for three days, “was returned to the committee from which it was received, without his signature.” Under these conditions, by the provisions of the Organic Law of the Territory, the act became a law.
(c) Provisions of Bill.
The Judge of the Third Judicial District was authorized to appoint two trustees. These trustees were to have full power to settle up the business of the bank, "to sell and convey the personal and real estate,” and also “to collect and pay the debts.” They were to have authority to sue for and recover any debt or property of the bank in the name of “The Trustees of said Bank;" after paying the debts and necessary expenses they were to divide the money and remaining property among the stockholders.
Provision was made that the trustees should receive in payment for debts due the bank, the bills of the same at their face value. All real estate was to be sold on a credit of four, eight and twelve months with equal payments. The purchasers were to give a mortgage on the property and also a bond with security, which was to be approved by the trustees. If there were any failures to comply with these requirements within two days after the sale, the property, after giving twenty days notice, was again to be sold; if any loss was sustained as a result of this second sale, the first purchaser should pay the deficiency and the costs.
Before entering upon the discharge of their duties, the trustees were to give a bond in such a sum and with such
1 Chapter 31, Laws of the 7th Legislative Assembly of the Territory of Iowa.
security as should be approved by the Judge of the Third Judicial District; and were to be held “jointly and severally responsible to the creditors and the stockholders of said bank to the extent of the property and the effects of the said bank as shall come into their hands."
Any suits pending in the courts of the Territory, of which the bank was a party, should not be discontinued or in any way effected” by the repeal of the charter, but were to be prosecuted to a final termination by the trustees.
The trustees, on receiving their appointment, were to take possession of the property and make a “complete schedule” of it and file a copy in the office of the clerk of the District Court of “Du Buque” County. The affairs of the bank were to be closed up within a reasonable time, not to exceed two years, unless by special consent of the Judge upon the showing of a good cause. They were to make a final report to the Judge, and to make such reports from time to time of the condition of their trust as he might require. The amount of their compensation was to be fixed by the Judge. The act was to take effect in twenty days after its passage.
3. Provision for Payment of Debt Due the Miners' Bank by the Territory of Iowa.
On May 21, 1845, Samuel Murdock of Clayton County introduced in the Council a resolution' requiring the Committee on Territorial Affairs to report at an early date how much the Territory is indebted to the Miners' Bank of Dubuque; when the debt was contracted and for what purposes, also as to what means the Territory has for paying the same.
The committee made their report in the form of (No. 55, C. F.) “A Bill to provide for the payment of the debt due to the Miners' Bank of DuBuque.” It was read and referred to the Committee of the Whole, and by them reported back
- Journal of Council, 7th Legislative Assembly of the Territory of Iowa, p. 65.
2 June 4, 1845.
without any amendments, and was finally passed by the Council on June 7th.
The bill as passed by the Council was received in the House and referred to Committee on Judiciary, and was reported back without any amendments on June 9th and sent to the Governor for his signature.
On June 10th, 1845, this act' was signed, to provide payment for the long past due account of the Miners' Bank of DuBuque against the Territory of Iowa, which had been contracted under the provisions of the act of the 15th of January, 1841.
By this act the Territorial Treasurer was to give a three months' notice, published in at least two papers in the Territory, and in some one paper in St. Louis and Cincinnati, of a public sale of lots belonging to the Territory on the first Monday in May, 1846.
There were to be enough of these lots sold to the highest bid der, upon 6 and 12 months credit, to pay the debt due to the “Miners' Bank of Du Buque.” The purchasers were to make a bond with sureties to secure these payments, and when they were made the Treasurer was to execute a deed for the lots. As soon as these bonds matured the Territorial Treasurer was to collect them and pay the debt.
This act was to take effect after its passage, which was upon June roth, 1845.
It will be seen by the provisions of this act that notes given to the bank for money loaned could not be paid at the earliest date possible, before May 1847. Six years after they were given and over four years after the last one was due.
4. Protest Against Provision for Banks in Constitution.
Before the vote was taken on June 2, 1845, upon the “ Bill to submit to the people the draft of a Constitution formed by the late convention,” nine members submitted a written pro
: Chapter 18, Laws of the Legislative Assembly of the Territory of Iowa, 1845.