The most important amendment to be proposed was that in regard to corporations which was the work of "Locofocos;" but many of the old school Democrats would have been glad to have had an opportunity to vote for the provision for “Joint stock companies," or to leave the matter to the discretion of the Legislature. Most of the counties where the Whigs were the predominant party adopted resolutions in the conventions, called for the election of delegates to the State Convention. The resolution' passed by the Whig Convention at Farmington, Van Buren county, on the 29th of April, is one of the more conservative ones. It is as follows: Resolved, that the Constitution of the State imposed upon the people of this State by the wretched policy of a party preventing as it does and will, the influx of capital and enterprise into our young State and consequently the development of her inexhaustable mineral resources, her great agricultural wealth and manufacturing and commercial facilities is a burden to which the people will not long submit, and that we will sustain no man for the Legislature at the approaching election who will not pledge himself to vote for a law submitting the question to a vote of the people. There were no resolutions in regard to the question of amending the Constitution passed at either the Democratic or Whig conventions of this year. By the year of 1849, the question of amendment or no amendment of the Constitution in regard to incorporations had become of enough importance to receive the attention of both parties at their State Conventions. In the resolution in regard to National affairs, "the paper policy" was decried by the Democratic Convention.3 In the Whig Convention4 two resolutions were devoted to the subject. These state "that the welfare and interests of the I Iowa Standard, May 17, 1848. 2 Fairall's Handbook of Iowa Politics, p. 25. 3 Held at Iowa City, June 28, 1849. 4 Ibid, June 30, 1849. 5 Fairall's Handbook of Iowa Politics, p. 27. people imperatively demand an amendment by which the incubus imposed in some of the provisions of the Constitution upon their resources and prosperity, shall be removed. That the people had a right to demand that the question be submitted to them for their action and if this was not done the people would be recreant to their interests if they do not visit their condemnation upon a party that with professions of Democracy perpetually upon its lips has shown itself in practice to be destitute of the true principles of Democracy." The Whig Convention' of 1850, passed resolutions which were practically but the reiteration of those of the previous year. The Democratic Convention of this year gave no attention to the subject. The Whigs, at their Convention held at Iowa City, on February 22nd, 1852, stated3 that they were rejoiced to see their Democratic fellow-citizens in the western states occupying a part of the Whig platform, especially those parts in regard to currency and internal improvements. The opinion of this Convention was that a Convention to revise the Constitution of the State should be called at an early date and it was recommended, with a view of the carrying out of this object, that all State and local candidates, in every part of the State, should make this issue a distinct and strong one before the people. In consonance with with this, the amendment of the Constitution was made one of the principal issues of the campaign of 1852; it had its effect in the campaign as shown in the inaugural messages of Governor Hempstead delivered December 7th, 1852. While in the Legislature of Iowa Stephen Hempstead had I Held at Iowa City, May 15, 1850. 2 Fairall's Handbook of Iowa Politics, p. 28. 3 Fairall's Handbook of Iowa Politics, p. 32. 4 Constitution of Ohio and the enacting of banking laws by Wisconsin, Illinois and Indiana. 5 Governor's Message, p. 2. been one of the strongest of the anti-bank Democrats, and he was especially active in the attempts made to close up the affairs of the Miners' Bank. His statements as made in this message were a fair and candid avowal of the position of the larger part of the Democratic party in Iowa at this time; and in fact of the more conservative Democracy of the whole country. Because of this a condensation of his statements upon the subject of banks is given here. He expressed deep concern, when he saw in looking to the future, a large portion of his fellow citizens in favor of amending the Constitution in such a manner as to permit the establishment of banks. Restrictions incorporated in the Constitution for the purpose of preventing hasty, unjust and unwise legislation and thus protecting the people. The time had now come to study the principles of political economy as connected with the government so as to ward off the approaching evils. Among the first of these evils, he considered the system of banking as it had been and was now being carried on. Having been invested by law with extraordinary privileges they had become a power over the trade, industry, and commerce of the whole country. These banks had three special privileges: "First, to concentrate their capital and credit, and to issue their notes to double and often to triple the amount of their capital; Second, to loan their credit at a high rate of interest; Third, an exemption from the ordinary liability to pay their debts and contracts to which the majority of mankind is subjected." Possessing, exclusively, these powers and privileges by the sanction of the law it was not surprising that the agricultural, industrial and manufacturing industries of the country should be subject to frequent financial convulsions. The failures of the banks of Illinois and other Western States during 1840-41 and the consequent ruin entailed upon thousands could not be forgotten. A number of those states had failed to profit by their former experiences and had recently organized general systems of banking and again the whole Mississippi Valley would be flooded with a paper currency; and that they might look for another financial convulsion more disastrous than the former. He admitted that a system of banking would serve the purpose of stimulating the hopes and business pursuits of a community during seasons of prosperous credit, and would impart more than ordinary vigor to traffic; but it was always treacherous and had too many uncertainties upon which to risk the fruits of toil and industry of persons who were generally the least able to bear the losses incident to a paper currency. What would be the gain by the establishment of banks and the substitution of a paper currency whose inevitable tendency would be to drive the currency from circulation? The first blast of adversity would sweep the foundations of the business relations of the State away. There was too much paper money in circulation now; it had already driven, to a great extent, the precious metals from the State. "For the purpose of retaining in circulation a sufficient sum of gold and silver to do the ordinary business of the citizen," he urged the Legislature to pass a law prohibiting the circulation of all bank notes of a less denomination than ten dollars; for a law of this character would have a salutary effect in driving out the small notes and to some extent would protect the people from the effects of " Bank Explosions". This forecasting or rather prophecy of the future evil effects of state banks and their paper issues was fulfilled by the crisis of 1857. The Whig Convention' of 1854 passed a resolution2 which stated that the experience of seven years under the Constitution showed that it was not suitable to the political, agricultural and commercial wants of the State and that it was in direct opposition to "The Spirit of the age." The people needed and demanded an organic law which would make liberal provisions for internal improvements by the State and a banking system so organized and regulated that it would relieve the people from the heavy indirect taxation that they I Held at Iowa City, February 22, 1854. had been forced to pay to the banks of other States whose money was in circulation in Iowa. In his message' of 1854, Governor Hempstead recalled the cautions that he had given and recommendations that he had made in regard to State banking systems. He called attention to the fact that although only two years had elapsed yet they found themselves in the midst of a financial crisis. Long lists of suspended and broken banks were found in every issue of the newspapers, that the people who suffered from these broken banks were not "those whose business it was to deal in money and bank paper; and who wield the lightnings of heaven to tell of danger or disasters, but others whose very existence depends upon their labor and who can ill afford to pay the luxury and expense of banking corporations." "Yet with all the evidence of the pestilential effects of paper money on the necessary confidence between man and man and the industry and morals of the people, the enormous frauds that have been practiced and the losses suffered by toiling millions, we are told that it is necessary to establish a banking system in Iowa." He reiterated the statements in his former message that a banking system had a stimulating effect in times of prosperity; but that it was a system which was always fraught with danger. He looked upon the system which employed public stocks and securities as the most dangerous of all of the different expedients resorted to for the concealment and mitigation of the errors and evils of the present banking systems; for it was the making of one promise that it might be impossible to redeem the basis of another equally as desperate. He had had no occasion to change the opinions which he had communicated previously to the General Assembly, nor could he discern anything in the condition of the business relations or the positive wants of the community that the Constitution of Iowa should be changed to establish a banking system in Iowa. 1 Delivered December 8, 1854. Journal of House, p. 32. |