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answers to such of your questions, as are not replied to by the statement itself.
I am very respectfully,
T. O. MARTIN, Cashier. Warner Lewis and others, committee of investigation. For answers to No. 1, 2 and 3, see statement.
To No. 4, I answer fourteen thousand, four hundred and fifty-two 76-100 dollars. From 5-14, inclusive, see statement.
To No. 15, I answer, the Miners' Bank has never knowingly taken more than seven per cent. on loans.
To No. 16, fifty per cent. of the capital stock, was required to be paid in before the bank could legally commence operations.
To No. 17, our deposits are generally of a special character, and made to apply on notes not yet due.
T. O. Martin, Esq., Cashier of the Miners' Bank of Du Buque, being duly sworn by the chairman of the committee of investigation, says: “that the foregoing answers to the interrogatories propounded, and the expose of the condition of the bank, is true and correct, according to the best of his knowledge and belief.
T. O. MARTIN, Cashier. Subscribed to and sworn to before me,
WARNER LEWIS, Chairman of Committee. Which statement your committee carefully examined and compared with the books and vaults of the institution, and is, in their opinion, a true exposition of the condition of the bank, from which it appears that the amount of cash on hand nearly doubled the amount of the liabilities of the bank.
Your committee would further state that every facility was afforded them for making the investigation, through the politeness of T. O. Martin, Esq., Cashier, and upon a full and fair investigation of its liabilities and resources, your committee are constrained to believe that the Miners' Bank of Du Buque, is in a safe and solvent condition.
WARNER LEWIS, HARDIN NOWLIN, JAMES HAI.L.
NOTE—This Report was concurred in by both Houses; Journal of House, p. 132.
2. The Results of the Investigation.
The investigation called for by the appointment of this committee evidently originated in the local prejudices against the Miners' Bank.
It was the third time that the local bickerings had brought a committee to make an investigation of its affairs.
The report of the Investigating Committee does not throw any light upon some of the disputed points of its organization. The old question of how much of the stock was paid in before the bank commenced operations yet remained unanswered. The reply of the Cashier to the question was evasive, as shown by the language of his answer, that: “fifty per cent. of the capital stock was required to be paid in before the bank could legally commence operations.”
The "Bills Discounted” account had risen to $71,597.72, over one-fifth of which had been borrowed by the officers and directors of the bank; in the former report only about oneseventh of the loans were made to the directors.
The character of the circulation had changed, although the total still remained small. The demand notes during the past year had been issued to more than twice the amount of the post notes. The amount of specie for redemption of circulation was very low ; less than one dollar of specie for every five of bills issued. The individual deposits still remained small and were of a special character.
This report gave entire satisfaction to the members of the Legislature, and no further action was taken in regard to the condition of the bank until the beginning of the Legislative Assembly of 1841, when other and new factors entered into the discussion of its affairs.
3. The Proposed Bank of Charleston.
A petition of the citizens of Jackson County, praying for the establishment of a bank at that place was presented to the
1 Journal of House, 1839, p. 140. Original in Sec’y State's office, No. 2212, B. 381.
House of Representatives on December 27, 1838. It was signed by fifty-three petitioners. The petition stated that in order to increase the ordinary means of transacting business in a country destitute of capital, that some measures should be taken to increase the advantages. The bank was to be located in the village of Charleston, in Jackson County, and it was asked to have the rights and privileges incorporated in the charter that were generally granted to banks; and that the bank might commence business with a capital not exceeding fifty thousand dollars, which could at the will of the stockholders be increased to two hundred thousand dollars. It was referred to the Committee on Incorporations and was never heard of again during that session.
4. Condition of the Miners' Bank in 1841.
In an Executive Document of the 26th Congress there is found an interesting letter written by Governor Lucas of Iowa as an answer to the inquiries of the Secretary of the Treasury in regard to the forwarding of a report on the condition of the banks of Iowa.
The Governor wrote that a statement of the condition of the one bank in Iowa was not required by law; and that the latest information that he could furnish him with was a copy of the report of the Legislative Committee made in 1838, and a letter written by Mr. Bainbridge, (President of the Legislative Council). In answer to the Secretary's questions Mr. Bainbridge, under the date of December 14, 1840, wrote that personally he knew nothing of the condition of the Miners' Bank; but in October, the Cashier had informed him that the circulation was less than $40,000. From other sources, in which he had the fullest confidence, it had been stated to him that there was more than $45,000 of specie in its vaults, and he had no idea of the amount of notes. It was his personal belief that the bank had never failed to redeem its notes in specie. And in conclusion he stated that “the people in the Northern part of the Territory have the utmost confidence in the institution.” This meagre statement is all that we know of its condition in the latter part of 1840.
1 Exec. Doc. 111, 26th Cong. 2nd Sess., Vol. IV, p. 1416.
5. The Loan of the Miners' Bank to the Territory of Iowa.
On January 15, 1841, there was approved an “Act' authorizing a Loan of money to be expended on the Capitol.” On account of the financial condition of the Territorial Treasury, it became necessary to secure a loan of money to cover the expenses attendant upon the continuance of the work of erecting the Capitol. The Territorial Agent, Jesse Williams, was authorized to make such a loan to an amount not exceeding twenty thousand dollars, if it could be made by pledging the faith of the unsold lots in Iowa City. In accordance with the provisions of this act, the Territorial Agent secured a loan of five thousand dollars on June 28th, 1841, due in eighteen months after date, payable at the Bank of America in New York City. The interest to be paid quarterly, at the State Bank of Missouri, in the city of St. Louis. On September 30th of the same year another loan of only five hundred dollars was made, payable at the State Bank of Missouri nine months after date. These loans were negotiated at the rate of seven per cent. per annum from the Miners' Bank. The act was repealed by the Legislative Assembly of 1841-42.
6. The Panic of 1837 and General Suspension of Specie Payments.
On the roth and 11th of May, 1837, the New York banks and the Natchez, Miss., banks suspended specie payments, and as fast as the news spread to the cities, East, West, North and South, the other banks of the United States suspended also. In this general suspension of specie payments the banks of New England were included, as they were not in the suspension of 1824. All the New York banks, including the deposit banks, continued this suspension of specie payments. until May Ioth, 1838, without any violation of their charters. In August, 1838, the banks of Philadelphia resumed specie payments; and by the ist of January, 1839, there was at least a nominal resumption of specie payments throughout the Union. From 1837 to 1841 there was great distress among the people of the country, especially in the well-settled Eastern states. Prices were abnormally high, and inflated land values in the Western states and territories collapsed as the currency depreciated. Although business throughout the country was revived slightly in 1838-9, the weak and crippled condition of the banks in general made them easy victims to the so-called “after panic of 1839.” The immediate cause of this after panic was the failure of the United States Bank of Pennsylvania, immediately followed by the suspension of all the banks of Philadelphia. By the end of the year 1839 out of 957 banks and branches in the United States 343 of these had suspended specie payments entirely, 62 in part, and 56 had failed; during that year only 48 of the suspended banks had resumed specie payments, The State Bank of Missouri did not suspend specie payments on its own notes, but as it traded on the notes of other Western banks, it became an issuer of inconvertible paper money. The banks of Rhode Island soon resumed specie payments. The banks of South Carolina resumed specie payments in July, 1840, and all the other banks to the South and West of New York, with the exception of East Jersey and a few scattered banks of different places continued to refuse specie on demand. On January 15th, 1841, the banks of Philadelphia resumed specie payments and sustained them for about twenty days. They then for the fourth time suspended specie payments and did not resume again until the roth of March, 1842.
1 Chapter 72, Laws of the Territory of Iowa, 1841.