I.

CHAPTER V.

BANKING IN IOWA FROM 1841 TO 1844.

The Attitude of the Fourth Legislative Assembly.

At this time the Democratic party in many of the different states of the Union was taking a decided stand in favor of forcing all the banks into a speedy resumption of specie payments. There was a general tendency to make those that could, resume specie payments and to force those that did not have the ability to resume, to the wall. There was a strong feeling in the party that the "rotten concerns must go by the board" and there was a seemingly concerted action to carry out this thought.

So the Miners' Bank again became a topic of discussion in the Legislative Assembly during the session1 of 1841-42, appearing in the form of Joint Resolutions and Bills in the Council and the House.

In the Council two Joint Resolutions, an Act, and a Resolution originated. Leffler of Des Moines County on January 20, 1842, introduced a Joint Resolution2 authorizing an investigation by a joint committee of the Miners' Bank of Dubuque, which was passed on the same day and referred3 to the House. Springer introduced on February 2, 1842, a resolution requiring the Cashier of the Miners' Bank of Dubuque to furnish to the Council a sworn statement of its affairs. This was adopted. Mr. Bainbridge4 presented the statement of the Cashier.

1 Continued from December 6, 1841, to February 18, 1842.

2 Journal of Council, 4th Legislative Assembly, p. 100.

3 Ibid, p. 135.

4 Ibid, p. 137.

51

Statement of the affairs of the Miners' Bank of Dubuque,

Notes of other Banks (chiefly Illinois).

32,812

Gold, Silver and Notes of State Bank of Missouri

43,277.66

$322,074.17

I hereby certify that the foregoing is a correct statement of the affairs of the Miners' Bank of Dubuque, according to the best of my knowledge and belief.

T. O. MARTIN, Cashier. Sworn and subscribed before me, this first day of February, 1842. JOHN HAWKINS, Justice of Peace.

This was referred to the committee of the whole. The Council then resumed its sitting as a committee of the whole ' on the Joint Resolution (C. F. No. 95) requiring the Miners' Bank of Dubuque to resume specie payments. No day being named for the resumption, Mr. Bainbridge of Dubuque moved that the blank be filled with August 1st. This date was adopted. The resolution was then reported to the Council. Mr. Green of Linn moved to insert March 1st instead of the later date;

Journal of Council, 4th Legislative Assembly, p. 137.

and from this motion sprang up one of the most spirited debates of this session of the Legislative Assembly. By this debate the Miners' Bank of Dubuque was introduced into the arena of party politics.

In all of the different Legislative Assemblies preceding this, the members had been elected upon purely local considerations, the questions of party not affecting the results at all. But a large portion of this particular Assembly had been elected upon the basis of party principles, the rest upon local considerations. Not only in the Council, but also in the House, during this session the bank was attacked, not because of any of the characteristics of this particular bank, but because it was a bank. The Democratic members as a whole based their speeches in opposition to it upon the principles which had generally governed the banking system. It was written of it at at this time: "Her notes form a very inconsiderable portion' of the circulating medium of the Territory." From this time on the bank was not only to be bruised for its own misdeeds, but was to be ground between the millstones of party politics. From this time on, until the introduction of the National Banking System and the doing away with the State Bank of Iowa, the party lines were to be drawn, more or less tightly, always enough to be felt. There was no ceasing by the most radical wings of either the Whig, the Democratic, or the Republican party.

These conditions must be borne in mind in judging the future action of the people in their consideration of the banking system. It will not be the system alone that will be considered, but there will always be behind it the thought of the system as a banking system, irrespective of the principles governing it. (a) Position of Democrats in the Council.

Bailey of Van Buren spoke2 in opposition to the amendment and denounced all of them as "swindling machines, festering with corruption." Continuing in his speech, he adverts to the

1 Capital Reporter, December 23, 1841.

› Iowa Standard, February 5, 1842.

late bank riots' and claims that the 1st of August, set as the time of resumption by most of the Western banks, will see the most of them go down in a general crash. In the latter portion of his speech, he said: "If the Legislature should fail, or refuse to act promptly in this matter, that the people of Iowa would be justified in taking the matter into their own hands and taking summary vengeance on the bank."

Hall of Van Buren replied to the somewhat demagogic utterances of his colleague and was opposed to the Council doing anything, but if it must do something, he was in favor of serving it the same as other Western banks and defer the resumption of specie payments until the 1st of August.2

Bainbridge of Dubuque was opposed to mobs and hoped to never see one in Iowa; but, if one occurred, it was his wish that the people would be hung.3 He re-asserted that up to this time there was no dissatisfaction with or "excitement" against the bank in the community where it was located; that "the great body of the people had been benefitted by and were perfectly satisfied with the operations of the bank." He called the attention of the Council to the fact that it had paid specie longer than any other Western institution, and only suspended in self-defense. That since its general suspension it had paid out thousands of dollars in specie to settlers who had needed it to enter their lands, and had never refused it for that purpose. He affirmed that the statement of the cashier showed its solvency; and that if it were compelled to resume and maintain specie payments, the result of it would be that the banks of neighboring states, where suspension was legalized, would drain it of its specie, while their own notes might be in its vaults and would not be available until general resumption. This would be of benefit to the bankers of St. Louis, but the poor farmers and mechanics of Iowa would have to sacrifice their notes or wait twelve months for the settling of the affairs of the bank. In closing he said that the

I In the cities of the Eastern States.

2 Iowa Standard, February 5, 1842. 3 Ibid.

"Democracy of some gentleman demanded the abolition of all banking institutions, but his did not carry him so far."

Green of Linn was of the belief that the whole system was of the tendency to deprive the laborer of the product of his toil, and give it to some rich broker or speculator. He called attention to the common custom of contractors buying up the depreciated notes of Ohio and Michigan at enormous discounts and paying their hands with them at their face value. The people everywhere were redressing the wrongs which they were suffering from banks. For himself he knew nothing of this bank or its operations, he was simply speaking of the principles governing the system. It was only a matter of expediency that he would vote for March 1st. A very incendiary portion of this speech, as reported, not quoted, led to a denial of it by Green in the Capital Reporter and an affirmation of the correctness of it in the Standard by the editor and a correspondent.

Parker of Scott was opposed to the Legislature taking any action upon it; if there was any question of the bank having forfeited its charter, it should be tried before the "proper tribunal." He felt that his constituents did not have any interest in the concerns of the bank. Personally, he would not vote to deprive any creditor of his just dues and was opposed to all form of stay laws.

The committee of the whole now reported3 it back to the Council with the blank filled with August 1st. Green following his former course moved to change August 1st to March

Ist.

This caused Leffler to give a clearly defined statement of his position.4 From the standpoint of wrong, it was as unjust to insert March 1st as August 1st. The certain effect of passing it as amended March 1st would be to give the gold to the St. Louis brokers and leave the bank without any specie to redeem its notes in the Territory. This would be

1 Iowa Standard, February 5, 1842. 3 Journal of Council, p. 137.

4 Iowa Standard, February 5, 1842.

2 Ibid.