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Miners' Bank to resume specie payment within a short time and compel it to do a safe business for the people. His opinion was that the only way to do this was by the mortgaging of land for security of the issues of bank notes.
The consideration of the amendment was then taken up, and an amendment was offered by providing that upon failure of the bank to resume specie payments, that persons holding such liabilities could proceed against the stockholders and collect out of their private property as in the case of individual debts, this was accepted as a part of the amendment and the vote upon its passage was lost by a vote of 8 to 17.
The bill as it was now left required that the charter of the bank should be repealed and its affairs closed up and the engrossment of the bill in this form was decided in the affirmative.
In the interval between its engrossment and final passage, Mr. Rogers presented the petition of several citizens of Iowa City, praying the Legislative Assembly to pass a law to resuscitate the Miners' Bank of Dubuque, provided, that the Stockholders caused to be paid into the office of the Secretary of the Territory the sum of $10,000 as a bonus; the said sum to be appropriated for the encouragement of the emigration of marriageable females from New England to this Territory. This was referred to a select committee.
On January 13th3 the bill was passed by a vote of 18 to 7, a strictly party vote; and then referred to the Council.
(c) The Discussion in the Council.
In the Council,4 on January 15th, there were presented petitions and remonstrances from Des Moines County for and against the passage of a law to compel the Miners' Bank to resume specie payments. On the same day the House bill 5 repealing the Charter was received and read the first and second time, and it and the petitions and remonstrances were referred to a Select Committee.
1 Journal of House, p. 78. 2 Ibid, p. 81. 3 Ibid, p. 84. 4 Journal of Council, p. 73. 5 No. 1, House File.
The next morning the Select Committee' made a report amending the bill; these amendments made it practically a new bill as they changed the whole tenor of it. All after the enacting clause was struck out and the first section required that the Miners' Bank should resume specie payment within thirty days after the passage of the act. The second that if the bank did resume specie payments, it should make its notes redeemable at par in gold or silver in the cities of Burlington, St. Louis and New York; and a provision was made that the Cashier should make sworn statement of the condition of the bank every ninety days and have the same printed in the newspapers of Dubuque. The third section provided that if the bank failed to resume specie payments or at any time should fail to continue the payment at any of the places where they were made redeemable, the District Attorney of Dubuque was to swear out a writ of quo warranto and prosecute the
The act was to be in force immediately upon its passage.
This bill as it had passed the House was in consonance with the principles of the Democratic party in regard to banks at this time—that was to close them up as soon as possible by the Legislature revoking the Charter; but the bill as reported back by the Select Committee was completely in accordance with the Whig ideas in regard to banks—that was to make their currency safe; and if that were not safe to proceed against them by legal action.
On January 17th, the bill came up as reported” back for consideration by the Committee of the Whole, and no, amendments were made to it; but in its consideration by the Council an attempted amendment was lost by a vote of five to eight. This required that the bank before commencing business should transfer in trust to the Territory $150,000 worth of real
1 Journal of Council, p. 77. 2 Journal of Council, p. 81.
estate for the protection of the note holders “in case of suspension of specie payment or a violation of any kind,” this real estate was to be held under the direction of the Governor.
An amendment was then made, “That the President, Directors and Stockholders of said bank shall be liable in their individual estates and in case of a failure to pay specie at all times, they shall be liable to be sued and recovered from at all times and places wherever they may may be found.” This was an unlimited individual liability clause, and the most drastic measure that had ever been proposed, or had been passed by any Legislature for the protection of the note holders.
A further section' was added by an amendment which provided that if the bank should import into the Territory any note of a less denomination than five dollars, “or notes of any size not equally as good as specie in Du Buque,” the charter was to be forfeited and the bank was to be closed up as provided. This amendment was changed by striking out “or notes of any size not equally as good as specie in Dubuque, etc.," which simply left it as a prohibition upon the importation and vending of bills of a less denomination than five dollars, and permitted them to bring in and pass depreciated bank notes as was the general custom of banks.
An attempt was made to further amend the bill by requiring that the bank within a year should pay a bonus? of $10,000 to the Territory. This was lost by a vote of 5 yeas to 8 nays. The engrossment of the bill was ordered.
On the farther consideration of the bill, the unlimited liability clause was restricted to the amount of the respective shares owned by the stockholders.
The report as to the condition of the bank was to be made by the Cashier, and it was attempted to amend it so as to show the names of the stockholders, and the number of their respective shares, “and such a statement shall be prima facie evidence of their liability in all cases;" but the last clause was struck out and all that was changed in making the report was that the names and respective shares of the stockholders should be inserted in the report.
1 Journal of Council, p. 82. 2 Ibid, p. 83. 3 Ibid, p. 91.
On January 20th? the bill passed the Council without further amendment by a vote of 10 yeas to 3 nays.
The bill as it had passed the House provided for the revocation of the charter and the winding up the affairs of the bank. As it passed the Council it provided for the resumption of specie payment in 30 days; the making the bills equivalent to specie not only at Dubuque but also at Burlington, St. Louis and New York; in case of failure to comply with the above, “the winding up the affairs of the bank;" that the stockholders should be liable to the amount of their stock; that the bank should not import and vend the bills of a denomination less than five dollars; that a report of the condition should be printed at least once in ninety days, which should show the names and respective shares of the stockholders; and that it was to be in force after the passage of the act.
The bill in this form would have afforded a reasonably safe circulating medium in prosperous times, and when at the same time its stockholders were men of property. By the conditions of the charter the bank was allowed upon a capitalization of $100,000 to issue notes to the amount of $200,000. The only guarantee back of these notes being the capital of the bank, hence by the restrictions of the charter there was, considering the capital not to be in any way impaired, a guarantee of only 50 per cent on the maximum of circulation. By the restrictions added by this act, conceding that each of the stockholders owned property (not exemption proof) to the amount of his respective stock, an additional safeguard of 50 per cent was added to the maximum circulation. That is, under the most favorable circumstances, the note holders were fully secured. Under the most unfavorable circumstances when there was a total impairment of capital and an
entire lack of legal liability upon the part of the stockholders the security of the notes became nothing. But it is probable that under the management of conservative business men of responsibility that the notes in ordinarily prosperous times would have always been current at par. The demand for them to use instead of exchange on St. Louis and New York, the principal trading centers of the Territory, under certain circumstances, would have caused them to have been above par. The notes would have been far superior in regard to safety to most of the circulating medium found throughout the Territory at this time, as practically all in circulation were at a discount. In summation it may be said that if this bill could have been passed, and if it then should have been accepted by the bank and put in operation by such a company as secured control of it in the following April, it would have been a blessing to the business interests of all classes of citizens in the Territory of Iowa.
(d) The House Refuses to Concur.
The House, on January 23, 1844, refused to concur' in the amendments made to the bill by the Council by a vote of 11 to 14; and on the next day the Council passed a motion to postpone action upon the bill until the next "Fourth day of July.” This was the death blow to any farther legislative action upon the affairs of the bank at this session.
8. Resumption of Specie Payments by Miners' Bank.
The Miners' Bank of Dubuque suspended specie payments on March 29, 1841, and resumed the payments of its liabilities in gold and silver on the 19th of April, 1844. This resumption3 was made soon after the election of M. Mobley as Cashier, formerly connected with the State Bank of Illinois at Springfield. From this time until the day that the charter of the bank was repealed, the bank met all of its obligations in specie, if so desired. During the period of its suspension its
i Journal of House, p. 122. 2 See Iowa Standard, April 16, 1841. 3 See Iowa Standard, April 26, 1844.