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(6) The Testimony of G. D. Dillon.
G. D. Dillon was sworn and stated that $41,147 was in the bank in specie on the 21st of November, 1837. Some money there belonged to the bank at that time and some to me. The safety fund notes on hand at that time belonged to the bank; the notes of the United States Bank belonged to the Bank and individuals.
I entered names on the bank for $101,000 worth of stock the owners assigned it to me. The ten per cent. was all paid in. The small stockholders paid in their stock, some drew it out again by notes.
Some paid the installment of forty per cent. I brought two notes of $75,000 from the East. Part of the stock was individual notes which were afterwards discounted. I showed the committee $12,000, which was on hand at that time. The Galena Bank was the bank in which we deposited our stock, part in specie and part in paper. The paper money that I had considered as belonging to the bank, but as some of the directors said that they would not consider it legal, I thought there was some they should not have. It was talked of among the directors to take stock notes. The notes that I had were payable to the President, Directors and Co. of the Miners' Bank of Du Buque. The directors have never passed upon them. The opinion of the directors was that a note payable to the bank was good for stock without endorsement. Some of the stockholders have had their stock discounted. Some of the forty per cent. was paid in specie, and some in notes of other banks. I don't remember that any individual notes were received for stock, some paid their stock, put in their notes and drew it out again. I don't remember at what time we began issuing. Don't remember with what notes we discounted with first. The people here got a large portion of Du Buque paper, for their notes, others got other bank paper. Some of the stockholders had their notes discounted and drew out the money they paid their forty per cent. with. I took into consideration that we had funds and paper amounting to $100,000, which was paid in before issuing. I have the notes originally paid in by me. I ought to own $101,000 of the stock. I put in a note and took it out again; I paid in my stock and drew it out again by a note. I sometimes discounted notes on my individual responsibility. The statement I made to the first committee is substantially correct.
After hearing the above statements and testimony of the
several individuals, the committee resolved to meet again on the first Monday in June next, and the Clerk be authorized to have the present proceedings published in all the papers of the Territory.
T. H. McKNIGHT, Ch’man.
E. Childs, Com.
February 10, 1838. The editors of all papers in the Territory will please give one insertion of the above in their respective papers, and send their bills to the Secretary of the Territory for payment."
(c) Discussion of the Report.
In this report the President and Cashier testify that the full amount of the capital had been paid, and the statement is made that the required amount of specie had been paid in; but there is no testimony bearing upon whether it was paid at the time required by the charter. The testimony shows that one-half of the money was Jackson County and Bank of Manchester notes, the charter of which is discussed later. It is stated that there is no officer or director that owes more than $5,000, the limitation of the charter; and the total amount owed by all the officers and directors is $14,183, which is about one-seventh of the total capital of the bank. The testimony in the report and the statement of the count of the Investigating committee reveals that $30,000 in Michigan notes have been put in circulation.
The appended statement of assets and liabilities only shows loans to the amount of $42,869.05, while the testimony of the President and Cashier show that $48,708.78 had been loaned.
It is shown that while post notes will be received in payment of debts due the bank regardless of maturity, they will, under other circumstances, be paid only in notes of other banks.
No other paper money than Michigan notes is revealed by the count of the money of the bank by the committee; and
1 lowa News, February 10, 1838.
$1,318.02 in specie with which to pay the $1,350.00 of demand notes of the bank.
The testimony of G. D. Dillon, the former cashier, while evidently badly mixed by taking it down in long hand, reveals some of the peculiarities of the early organization. This testimony showed that he had received the assignment of the subscriptions of the controlling interest of the bank's capital of which the first requirement of ten per cent. had been paid in. In one place, he states that a part of the stock was individual notes that were afterward discounted; in another, that the directors considered an unendorsed note, made payable to the bank, was good for stock; in his later statement in regard to this subject, he says: “I don't remember that any individual notes were received for stock, some paid their stock, put in their notes and drew it out again.” These statements furnish at least one witness to the fact that the money was paid in for the stock and that then the stockholders borrowed the money from the banks upon their individual notes.
(d) The Supplementary Examination.
The committee was not satisfied with the amount of specie on hand; but they were assured by the officers of the bank that the sum of $40,000 in specie was on deposit to the order of the bank in Detroit, and that it would be in the hands of the bank at the opening of navigation. As no report could be made until that time, they adjourned to meet the first Monday in June.
The committee met at Dubuque on June 5, 1838, and addressed to the cashier the following interrogatories:
First. What amount of discounts have been made since the examination in February last, and in what funds?
Answer. Thirty-eight thousand five hundred and twentyone dollars and forty-eight cents since the examination in February, and principally in the notes of Michigan and Wisconsin Banks received in the course of uur regular business.
1 Journal of House, 1838, p. 87, et seq.
Second. Have you taken the Manchester and Jackson County Bank notes in payment of notes discounted by the bank?
Answer. We have invariably received the notes of the Jackson County and Manchester Bank, circulated by this bank, when offered in payment of discounted notes, but have redeemed such circulation principally in current Michigan and Wisconsin money.
Third. What is the present amount of your discounts?
Fourth. What is the kind of funds on hand, of what banks and what amount of each?
Answer. Of the bank notes on hand, $3,858 are in the notes of various Michigan chartered banks; $2,804 in the notes of the Bank of Wisconsin; and $576 in the notes of Illinois, Ohio, and Kentucky banks.
Fifth. What is the amount of the notes in circulation of your bank, the amount payable on demand as well as those payable after date ?
Answer. $11,030; $460 payable on demand, and $10,570 payable 12 months after date.
A statement of the condition of the bank was also furnished by the cashier.
STATE OF THE MINERS' BANK OF DU BUQUE, JUNE 4, 1838. Banking house and lot.......
........$ 3,256.II Real Estate ........
950.00 Bills Discounted...........
.. 69,003.66 Contingent Expenses....
2,417.79 Domestic Bills of Exchange...
11,876.87 Bank of State of Missouri......
500.00 Farmers' and Mechanics' Bank of Michigan
762.19 Bank of Mineral Point....
318.37 Illinois Branch Bank at Galena..
496.50 Suspense Account....
4,453.98 Secretary of Wisconsin Territory....
5,050.00 Notes of Other Banks...
7,258.00 Cash items..........
576.68 Specie on hand..........
457.30 Specie in transit......
2,068.72 1,113.00 2,753.00 10,570.00
460.00 .. 10,412.73
$127,377.45 The committee called attention to the fact that the bank had not complied with its charter, nor with its promises and engagements to the committee in the month of February, and at this time have but $457.30 in specie on hand as the basis of their capital.” The committee did not and could not consider specie "in transit” as worthy of being depended upon.
The committee thought the bank had “violated, misused, and abused the privileges of its charter in several instances”; that the individuals who owned the institution did not have it in their power to place it in a solvent condition, although they believed the directors desired and intended to do so; the state of the currency was such that the object could not be obtained; that there was little confidence in the bank, and from all that had been exhibited, it was the opinion of the committee that the charter of the bank should be annulled and vacated. They offered the following resolution:
Resolved, That the committee on corporations be instructed to bring in a bill to repeal the charter of the Miners' Bank of Du Buque, and so to provide in said bill for the settlement of the accounts of said bank, that the public may suffer as little as possible.
(e) The Memorial to the Legislature.
On the 18th of June, the memorial' of Francis Gehon, Peter A. Lorimer, Francis K. O'Ferrall, Robert D. Sherman, and S. D. Dickson was presented to the Legislative Assembly. This stated that on June 14, 1838, that they had personally examined the books, deposits, accounts, and exhibits of the
1 Journal of House, 1838, p. 138, et seq.