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7. The Closing of the Bank.
On the 16th day of August, 1845, Judge Wilson appointed Benjamin Rupert and John G. Shields trustees to settle up the affairs of the Miners' Bank of Dubuque ; and approved their bonds. The trustees sought to obtain possession of the bank but the directors refused to turn it over ; and at the November term of court a suit was brought in the name of the United States by James Grant, relator, which raised the question of the constitutionality of the act that repealed the charter of the Miners' Bank of Dubuque. This case was appealed to the Supreme Court of the Territory of Iowa' from the ruling of Judge Wilson in not sustaining the demurrer of the defendants; the ruling of the lower court was sustained.
The case was then tried upon its merits in the lower court and the act repealing the charter of the Miners' Bank was decided to be constitutional. The directors appealed the case to the Supreme Court. It was tried at the July term of 1848 and the decision of the lower court was sustained. 3
The results of these decisions was to legally put the affairs of the bank in the possession of the Trustees ; but in the three years intervening between the passage of the act repealing the charter and the final trial, the affairs of the bank had been settled and it had passed out of existence.
On February 25, 1849, a meeting of the directors was called to close up their connection with the affairs of the bank.
8. Constitutional Convention of 1846.
The act providing for the Constitutional Convention of 1846 was passed on January 171h, 1846. Immediately after its passage the question of whether the delegates to it should
Docket B, 3d Judicial District (Dubuque County) p. 444. 2 Morris Reports, p. 482. 3 Green's Reports, Vol. I, p. 553.
4 Chapter 37, Laws of the 8th Legislative Assembly of the Territory of Iowa, p. 31.
be elected as political partisans was agitated. The Whig press was opposed to a Constitutional Convention to which the delegates had been elected by a party vote. As a typical statement of the Whig position, the following from a prominent Whig paper of the times may be taken: “They cling to a party Constitution—and why? Because they think they are in a majority and can carry out their views. If we are right in this assertion, and we believe that we are, they are tyrants. What is tyranny ? It is the exercise of authority of the strong against the weak. We draw our inferences and call the actions of our opponents tyranny.'
The Whig party claimed that they were not contending for a bank in Iowa, and that they did not demand a Constitution providing for one; but they wished to have this question left open for the consideration of the people that they might determine it later for themselves. They believed that the people had good sense enough to act upon this subject without the necessity of any constitutional restraint to prevent them from doing mischief. Whig conventions, held for the nomination of delegates, did not adopt resolutions in favor of banks.
On the other hand, the larger portion of the Democratic nominating conventions for delegates adopted resolutions instructing the delegates, if elected, to provide a prohibiting clause against banks, and in all cases denouncing them as intolerable nuisances.
(6) Resolutions of the Democratic Nominating Conventions.
As a typical example of one of these is a resolutions passed by the Democratic mass meeting, held at Fairfield on February 21, 1846; it was: 6. No bank or other institution is ever to be erected by the Legislature with the power of issuing its own notes, or the notes of any other bank, public institution or private individual; and a further prohibition against issuing by any individual, or individuals, of bills, checks or promissory notes, or other paper to circulate as money."
1 Iowa Standard, January 26, 1846.
3 Resolutions upon this subject are found in the Capital Reporter, March 11, 1846, and succeeding issues.
If this resolution had been followed it would have kept out of the state much of the “wild cat” banking that abounded in Iowa in the “Fifties," as it would have prevented the circulation of the “Nebraska Bank” money, the issues of the broken Agricultural Bank of Tennessee and of the defunct Talledegah Bank of Georgia.
Two of the resolutions passed at Marion, March 1846, throw light upon the opinion held as to the effect of a circulation of bank paper; they were:
Resolved, that this meeting is opposed to banks and chartered monopolies, believing such institutions to be detrimental to the great mass of the community, by creating a fictitious value upon property, and corrupting to the moral tone of society, by causing men to depend more and more upon loans and discounts than upon industry.
Resolved, that we are opposed to the circulation amongst us of bank notes of other states, believing it to be an evil from which we have suffered much, knowing that where such bills are circulated, specie disappears.
Johnson County, as the seat of government, having within its confines the leading politicians of the party in the Territory, at its convention held on March 14th, 1846, passed the most elaborate and withal the most radical protests against banks, of any of the counties. The three resolutions? devoted to banks follow:
7. Resolved, that believing, as we do, that there is gold and silver enough in the world to answer the purposes of a circulating medium, we utterly repudiate the doctrine advanced by our opponents that banks are necessary institutions and promote the public prosperity; and further, that we regard them as the most deadly enemies to the true interests of the laboring and producing classes, and as tending to sap the foundations of our liberties, as vipers warmed in the bosom of the body politic, to sting it to death, as splendid schools for bribery and corruption and as stalking horses for vice and demoralization.
1 Capital Reporter, March 18, 1846.
8. Resolved, that a State can not delegate that power to individuals which it does not possess itself; and that, therefore, no bank charter can be granted without a violation of that clause of the Constitution of the United States, which declares that no State shall have power to emit bills of credit or make anything but gold and silver a legal tender for the payment of debts.
9. Resolved, that experience having taught us, that when corrupting money power enters the field against the people's rights and the federal constitution, the latter forms no adequate safeguard to the former, but is trampled under foot with impunity, we are in favor of the incorporation into our constitution of a provision expressly prohibiting the incorporation of banks and other institutions with the power of issuing its own, or the notes of any other institution or individual to circulate as money."
The election of delegates was fought out on party lines. (c) The Constitutional Convention.
The Constitutional Convention of 1846 met at Iowa City on May 4th and continued in session until May 19th. There were thirty-two delegates; of these ten were Whigs and twenty-two were Democrats.
The Committee on Incorporations consisted of Bates, Dible, Grant, Olmstead and Ross, all Democrats. As the result of their labors they made their report' upon Incorporations on May 7th; it was as follows:
No corporate body shall be hereafter created, renewed or extended, with banking or discounting privileges.
The stockholders in all private corporations, except corporations for the purposes of education, charity or religion, shall be responsible in their individual and private capacity for all debts and liabilities of every kind, incurred by such corporation.
3, The Legislature shall have the power to amend, alter or repeal all laws creating private incorporations.
I Journal of Convention, p. 38.
These provisions were in consonance with the political action of the party to which the committee belonged. In the Constitutional Conventions of this year, where that party was in power, we find nearly the same provisions were put in the constitutions—Missouri and Louisiana.
These sections came up for discussion and a motion was made to substitute for the report! : “Whereas, all sovereignty resides in the people, and the creation of a corporate body is one of the highest acts of sovereignty, therefore, this Convention conclude, that the people have the right, through their representatives, to grant such corporate privileges as may be deemed conducive to the public good.” This was laid on the table until the 12th and was then amended by adding: "or the right to prohibit them altogether through this Convention, their representatives, if they, the people, should deem such prohibition for the public good;" but the amended substitute was lost.
A substitute for the first section’ was offered in the following form:
1. No corporate body shall hereafter be created, renewed, or extended, with the privilege of making, issuing, or putting in circulation, any bill, check, ticket, certificate, promissory note, or other papers, or the paper of any bank, to circulate as money.
2. Corporations shall not be created in this State by special laws, except for political or municipal purposes, but the Legislature shall provide by general laws for the organization of all other corporations, except corporations with banking or discounting privileges, the creation of which is prohibited. The stockholders shall be subject for such liabilities and restrictions as shall be provided by law.
An amendments to this first section was offered in the form of an additional clause by which the law creating such body renewing or extending its privileges should be published in the newspapers for four months before a general election for
1 May 9, Journal of Convention, p. 56. 2 Journal of Convention, p. 71. 3 Ibid, p. 72.