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 concur1 in the amendments made to the bill by the Council by a vote of II 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 From this time until the day that the charter of the bank was repealed, the bank met all of its obligations in specie, if so desired.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

1 Journal of House, p. 122.

2 See Iowa Standard, April 16, 1841. 3 See Iowa Standard, April 26, 1844.

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.

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.

I March 19, 1844.

CHAPTER VI.

THE QUESTION OF BANKING BEFORE THE CONSTITUTIONAL CONVENTION OF 1844.

I. 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 report' on 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.

I Journal of Convention, p. 28.

89

On the 19th the reports of the committee came up for consideration, and a motion' was made to strike out the majority report and insert the minority report, which was: "No bank or banking corporation of discount, or circulation, shall ever be established in this state." The debate upon this motion commenced early in the morning session and continued through that and the afternoon session. In the warmth of debate, the question of party politics was introduced, and an attempt was made to draw the lines and force the delegates to vote according to the principles laid down by the democratic or whig party. The convention was democratic in politics, but many of the delegates elected by the democrats had been, or at least felt that they had been, pledged to vote for a well regulated and safe-guarded system of banks of issue. The discussion of these questions of actual and implied pledges called forth from one of the delegates the remark, "that if the delegates were pledged, he supposed that they would have to vote against their principles, and the result would be that this democratic convention would pass a whig constitution." But the final result of this day's attempt to draw party lines was unsuccessful; the strongest argument against the dragging in of partisan politics was made by Lowe3 of Muscatine county, and Lucas of Johnson.

The strongest argument made against the majority report was that many abuses could creep in under the regulations as they had been made in it. The difficulty of ascertaining whether the required amount of specie was paid in or not, was pointed out, and it was shown that these requirements had been evaded in Massachusetts by the directors borrowing the specie until after inspection was made by the State Commissioners and then passed on to other banks for their use.

The individual liability clause was attacked on the ground that if a "swindling concern" was to be organized that the stockholders and officers would be found exemption proof as

I Journal of Convention, pp. 89–90.

2 Iowa Standard, October 24, 1844. 3 Ibid.