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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.
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
1 Journal of Council, p. 95.
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 concurs 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 suspendeda 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 liabilities depreciated very much. It was claimed that they had been bought in at a very great discount by the nonresident stockholders of the bank, and that in this manner they had realized a large sum.
1 Journal of House, p. 122. 2 See Iowa Standard, April 16, 1841. 3 See Iowa Standard, April 26, 1844.
Shortly before this we find that a number of citizens of Dubuque and adjoining counties had petitioned Governor Chambers to direct the district attorney to file quo waranto proceedings against the bank; but the governor refused to grant the request. The radical anti-bank paper of the Territory, the Iowa Capital Reporter,' could see no reason why this reasonable request was refused, for the bank would have a chance to defend itself in a court of law, and if, as its friends claimed, there had been no violation of the charter, no forfeiture could be declared, and the bank would come out of the ordeal with a better credit than it had ever had since its organization. If the governor had permitted this prosecution to have been commenced, the bank would have had the advantage of a strong federal bank Whig to prosecute the case against it, which many deemed would have been a decided advantage for the bank over its opponents. It also stated that those persons who had attempted to bring the bank to justice had been defeated three times and that they were about to make a petition to the district court to bring it to trial. This case, after various delays, came up for trial in the May term of court in 1845. The case was ready for the jury when it was dismissed. The friends of the bank claimed that it was because the prosecution was unable to prove fraud or mismanagement in its corporate affairs. The prosecution claimed that the reason why the case was dismissed was because the books of the bank were so mutilated that it was an impossibility to tell what the character of the earlier organization of the bank had been.
1 March 19, 1844.
THE QUESTION OF BANKING BEFORE THE CONSTITUTIONAL
CONVENTION OF 1844.
The Majority and Minority Reports on Banks. The first constitutional convention met at Iowa City, on October 7, 1844, and on the morning of the 11th the Committee on Incorporations made a majority and minority reporton banks. The majority report provided for a bank with branches, but not more than one branch could be organized for every six counties. The bill to establish such a bank and its branches was to be passed by the majority of members elected to both houses of the Legislative Assembly, to be signed by the governor, and then to be approved by a majority of the “ qualified electors” of the state before it became a law. One-half of the capital stock was to be “actually paid in gold or silver,” and this amount was to be in no case less than one hundred thousand dollars. The bank and the branches were not to issue any notes of a less denomination than ten dollars. The remedy for the collection of debts was to be reciprocal against the bank and its branches. The legislature reserved to itself the power “to put an end to the corporate powers and privileges” if the bank or its branches refused to pay on demand any “bill, note, or obligation issued by the corporation, according to the promises therein expressed.” The Legislature also reserved the power to alter, repeal, or amend the charter, at any time that they might deem that the public good required it. The stockholders were to be respectively liable for the debts of the bank and its branches.
1 Journal of Convention, p. 28.