Tuesday] CLARKE. [February 10th from Johnson seems to entertain, I sincerely re-vaults with coppers and paying them out to billgret it. paper, copper by copper, at the rate of fifty dolholders, when they demand their specie for their lars a day, to keep from breaking. I do believe, if I know my own heart, that there is no man more willing to listen to the candid, impartial, unbiassed opinions of their fellow men, and give them due weight and consid- ploded? Shall we have this basis here, and see Has not this old specie basis been already exeration than myself. I will be behind no man the bags of specie mounted upon wheels, and in courtesy. I will receive from no man a kind-rolled from vault to vault all over the State? ness that I am not willing to return again. IA pretty kind of banking system that would be will receive from no man a polite attention that I will be unwilling to bestow upon him. I would ask what have been the acts of arrogance I have exhibited here? Have I ever come in here when any committee has made a report, and offered as a substitute for that report a report drawn up by myself? Have I offered to this Convention my own individual gettings-up as a substitute for the report of five gentlemen who have given it due consideration and been selected for that purpose? Arrogance! Have I stepped beyond the sphere in which my duties have called me to act? Have I taken upon my own shoulders the labor of any committee, and come forward here with my individual efforts, and asked this convention to give them the place of the report of this committee? I will leave it to this convention to decide the question of arrogance between the gentleman from Johnson and myself. As for intelligence and moral honesty, let our words and our acts be our best wit nesses. for us to adopt, to enable the "widows and the banks broke, what a wonderful privilege it orphans" to invest their money! And when would be for these "widows and orphans" to have their money invested in these stocks. Johnson would use some of that wisdom whic It seems to me that if the gentleman from he does not accord to me-but which of course he must possess himself, else he could not judge so acutely of it in regard to others—he would see that if we provide here for a perfectly safe banking system under a general banking law, and make each stockholder individually liable, w would thereby provide in every bank, the best kind of a savings institution. Every bank organized under this law would be a savings bank, in which the gentleman, if he happens to be a trustee for any of these "widows and orphans," can most safely deposit their funds upon interest, and thus relieve himself of that grievous burden. As wonderful as it may seem, the sysfor the safe investment of all the funds that may tem we propose here will afford an opportunity orphans. They can be deposited in these instibe left by deceased persons for their widows and tutions, and they will be the safest institutions that can be provided, and interest will be allowed upon these deposites. I stand here defending the report made by the committee, of which I am chairman. said that this was our report, did I not also say When I to this Convention, that every individual member upon that committee, claimed to have his own ideas and to retain the right to come here and move amendments to this report, if he should see fit to do so? Does not the gentleman know that this is the Was there any thing of arrogance in that? I tleman from Jasper [Mr. Skiff] allow interest I certainly said that. system in vogue here now? Does not the gentold the Convention that they could look upon after a certain time upon all deposits made with the report merely as the index to our minds, af- him? Is this not the best system? If you ter examining all the information that came be- adopt a system in which the bankers would fore us in relation to the subject upon which we rather issue their own notes for circulation, and were called to act. And in my last remarks I not use the money deposited with them, a sys stated that I would thank any man in this Con- tem in which the negotiability of the stocks is vention to assist us, by any suggestion or amend-more important than the bills, they would say, ment, to carry out the great idea of that report. we cannot allow you interest upon your deposits, Was there any thing of arrogance in that? object of all the members of that committee, as I The but you can invest your money in our stocks. understand it, was to introduce a system here for safe banking for the people, and not for the benefit of monopolies and swindlers. ed to introduce a system that would allow of We want banking, but not of swindling. The gentleman gets up here now, and says that I did not answer his great argument in favor of his motion; which is, that the money of the widow and of the orphan might be invested in these bank stocks, if we can only take away this principle of individual responsibility. My God! what an investment that would be for "widows and orphans!" A general banking law without any individual liability! A bank ing system with a specie basis, and no certain stock securities, when we would have the old candy-hill operation gone over again, of filling question, and has accused me so much of arroThe gentleman has said so much upon this gance, that I will put the question in this way. cause I have claimed to myself superior wisdom If I am arrogant in this matter, it must be beover all similar conventions. Now, I find in the over somebody else, over this convention, and constitution of New York this provision: joint stock association for banking purposes, isThe stock holders in every corporation and suing bank notes, or any kind of paper credit, to circulate as money, after the first day of January, 1850, shall be individually responsible, to the amount of their respective share or shares of stock in any such corporation or association, for all its debts and liabilities of any kind, contracted after the said first day of January, one thousand eight hundred and fifty." In the constitution of Ohio is this provision : "Dues from corporations shall be secured, by such individual liability of the stock-holders, and other means, as may be prescribed by law; but, in all cases, each stock-holder shall be liable, over and above the stock by him or her owned, and any amount unpaid thereon, to a further sum, at least equal in amount to such stock." In the constitution of Indiana, is this provision: The stock-holders in every bank or banking company, shall be individually responsible to an amount over a d above their stock, equal to their respective shares of stock, for all debts, and liabilities of said bank or banking company." Illinois has the following provision in her constitution: "The stock-holders in every corporation, or joint stock association, for banking purposes, issuing bank notes, or any kind of paper credits to circulate as money, shall be individually responsible, to the amount of their respective share or shares of stocks, in any such corporation or association, for all its debts and liabili ties of every kind." In California and other States, the same, or similar provisions can be found in their consti tutions. [February 10th would ask this convention if there is anything of arrogance in that? And if I stand up here to manfully contend for that principle, believing that it is right, am I doing anything more than it is my duty and right to do? The gentleman accuses me of arrogance. I believe that I have nothing of arrogance in the sense in which I understand that word. But, if I should get up here, and should raise my voice upon any question counter to, and in opposition to, the wisdom of all the conventions that have assembled in the different States, to form constitutions, then I should think I might be chargeable with something of arrogance. Whether the gentleman himself, may be correctly accused of that or rot, I leave to his own conscience to determine. But so far as our positions are concerned before this body, 1 am not fearful of any verdict that may be rendered against me. when our record upon this matter, or upon others, shall be made up. I occupy the position of five members of the committee, who took this matter into consideration and reported this section. I arrogate nothing to myself superior to the wisdom of the others of the committee, or to the wisdom that guided the conventions which framed this same provision in the constitutions of other States. if the gentleman occupies a different position, I think he is not ent tied to throw stones. I stand upon this section, believing it will be ef Mr. YOUNG. There is a clause in the Indi- ficacious in securing, if possible, the rights of ana constitution, requiring this individual liabil-bill-holders, under the system we are about to ity. I want to know if any person was ever inaugurate in this State. benefitted by that provision, or ever got any more on account of it? And there is another question I should like to ask, concerning the provision in the constitution of the State of New York. I would like to know if there has ever been any bank established under that provision in the State of New York? Mr. CLARKE, of Henry. Plenty of them. them. There may Mr. YOUNG. I think not one. have been some evasion there, but we attempt to guard against these evasions in a subsequent section here. Mr. WILSON. I offered an amendment to this section a while since, but we have had two or three lengthy speeches, and I do not know as my amendment has been noticed much. I wish to present my reasons for offering that amendment. Section eight reads as follows: "Every stockholder in a banking corporation or institution shall be individually responsible and liable to its creditors, over and above the amount of stock by him or her held, to an amount equal to his or her respective shares so held, for all its liabilities, and in all cases where its stock shall be transferred, the liability of the gentle-transferrer shall not cease, nor shall the liabili ty of the transferee commence until the expiration of six months after such transfer shall have been duly recorded as provided by law." Mr. CLARKE, of Johnson. Will the man from Henry [Mr. Clarke] allow me to ask him a question? Mr. CLARKE, of Henry. [After a pause.] I will not. If the gentleman will be so uncourteous as he was to my friend from Dubuque [Mr. Emerson] on yesterday, as to refuse to answer any question from him, a gentleman much his senior, I will not answer any question he may put to me while I am upon this floor. I su mit to this convention, that I have not assumed any wisdom, superior to the wisdom of those who framed the constitutions of New York, Ohio, Indiana, Illinois, Texas, California and other States, which have provisions in them similar to this one. I have been humbly content to take their wisdom, and their reasons for this provision. I have been contented to be guided by that light in my course here: and I My amendment is to strike out all after the words "for all its liabilities," and insert "crea ted during the time that the person sought to be charged was a stockholder in such banking incorporation." The principal reason that induced me to offer that amendment was this. I believe the true policy, in relation to corporations of this kind, is to bring them as near to the nature of a partnership as possible; for after all they are but part:erships. If five persons enter into a partnership, all debts contracted by that partnership can be enforced against the partners individually. You have first to exhaust the partnership property in payment of their debts; if that is not sufficient you can then resort to the Tuesday] CLARK. property of the individual partners as individu als. 371 [February 10th con, by each of the members, about arrogance, whole, I believe they will be found to be a very are really true. For if you take the family as a modest and unassuming class of men, [renewed laughter] and for the credit of the family I hope that hereafter we will not have so much of this thing. Now when men associate in corporations for hanking purposes, I can see no reason why they should not be held to their own contracts to the same extent as persons in ordinary partnerships. If five men enter into a corporation for banking purposes, and they engage in that business, create debts and liabilities of any char- this eighth section-I am individually in favor As to the question before the committeeacter, I cannot see why those five men should of something of the kind, though I am not very not be held responsible for all the debts and li- particular as to the exact phraseology of the abilities so contracted, in the same manner as section. I believe, as has already been urged partners in any other kind of partnership. There here, that something of the kind is necessary. is no reason why that should not be done. If I believe that good faith towards the bill holdyou provide that the stockholders shall be indi-ers of the community at large, requires that vidually liable to double the amount of their we should adopt a provision of this kind. It stock, as this section provides, for all the debts would be giving to the people, who take the contracted while they were stockholders in the issues of this bank, additional security and corporation, you necessarily compel, not merely protection which is not afforded in any other the directors of the institution, but every stock- shape. While it will do that, I do not believe holder to look into, and investigate and exam-it will materially retard capital from being put ine the contracts before they are made by that institution. Every man becomes interested in the matter. He does not depend entirely upon the directors of the institution, but it is his peculiar interest, in connection with his pecuniary affairs, to look into the contracts made by that institution. If they prove disastrous, and the property of the institution is not sufficient, then why not make each individual stockholder liable for the contracts he entered into as a part and parcel of that partnership? in this? Do we seek to affix any responsibility Is there anything unjust to him that would not apply to a man in an ordinary partnership? He is not liable for any debts contracted after he has ceased to be a stockholder. It is then thrown upon others, and it falls upon those who enter into contracts to create liabilities. But so far as he is one of the contracting parties, I do not see why he should not be held responsible for his own acts and those with whom he is associated. I am not so completely wedded to any particular scheme that I will not vote for anything else but my own proposition. I will vote for my own views first. If I cannot get them, I will vote for the best I can get, upon the principle that half a loaf is better than none at all. hope that hereafter, instead of lengthy personalities, such as we have had here, and which are certainly not very agreeable to the Convention, we will confine ourselves a little more closely to the matters before us. can get along faster, and do away with the neI think we cessity of having resolutions of adjournment, and cutting off debates, introduced here. I think such a course would be more satisfactory to ourselves as well as to our constituents. Mr. CLARK, of Alamakee. I will say, in the first place, that I am very sorry that this bone of contention has been thrown in among the Clarke family. I am pained at the ill-will and disregard of the interests of that family, which I have seen exhibited here this morning by two of its members. [Laughter.] Now I do not believe that the charges made pro and meet into banking operations. I believe at least the been contended for by those who oppose this sec- And if they int nd that, they that condition, which will satisfy the community can have no objection to place their liabilities in that the institutions which issue these bills, and announce these liabilities, are perfectly sound and solvent, and that the bill-holders will be safe and secure. it is the interest of every stock-holder to make It is for their interest to do so; the credit of his institution as strong and perguard that can be thrown around these institumanent as it possibly can be. And every safetions, to insure confidence in them, is beneficial to the stock holder. vailed heretofore in most States in relation to I am opposed to the principle, which has presociations, and taking a certain amount of stock. banking, of allowing men to go into banking asThey may be worth millions of dollars outside of that stock. They put that stock into the bank, and paper is issued upon it, and they reap tution have confidence in its solvency, in consethe benefit of it. People outside of that instiquence of the position and wealth of the stock holder, aside from his interest in that institution. The community take these paper issues, sition and character of the individual stock to an extent they would not do, but for the poholder. that individual stock holder, who is worth his But when anything befalls that bank, millions, and who, individually, would be considered responsible to any amount, steps aside, and gets clear of all the liabilities of the institution. I do not believe such a system can be maintained upon principle or expediency. 372 Tuesday] this constitution, will be beset by agents of these That such a provision as this has been adopted in the constitutions of other States, that it is in the constitution of the State of New York, that there has been a banking system in operation under that provision for years past, that these banks are flourishing and multiplying, and daily issuing their paper, all this is in itself a complete refutation of the argument that such aously upon this subject. provision here will drive capitalists out of backing in this State. The gentleman from Mahaska [Mr. Young,] has asked if any banks in New York have gone into operation under such a I can tell the gentleman provision as this. that they have, and that every dollar of paper issued in that State, by any bank, since the first of January, 1850, has been issued with this liability attached to it, in consequence of this provision of the constitution of the State of New York; and it can be issued in no other way. | Has it had the effect of retarding the business! of banking there? Most clearly not; and if not, then I contend that it will not have that effect here. I am in favor then of incorporating some provision of this kind into our constitution. I believe that it is safe, that it is just to the community, and to all engaged or interested. I believe, in fact, that something of this kind is expected by the people. I know this question was canvassed a great deal in the southern part of this State. There are not a few there who take the position that banks of every kind are antidemocratic, and directly in conflict with the best And many others interests of the community. take the position that if we are to have banks, all the guarantees, and che 'ks, and safeguards, should be thrown around them, which the ingenuity of this couvention can devise. I do not see, for my part, what injustice can be done to any one, what injury will be sustained by any one, in consequence of a provision I am in favor of this kind in our constitution. of it, though, as I said before, and as the gentleman from Jefferson [Mr. Wilson,] has said, I am not so wedded to this particular provision that I will not yield, if the majority of the convention are opposed to it. I will fall back upon the next best thing, that can be adopted, if I cannot get this. I am in favor of placing in this constitution all proper safe-guards about the bill-holder. Gentlemen will not frighten me from this position with the charge that we are legislating in the convention. We are here peculiarly exempt from many of the temptations and influences to which legislative bodies that come after us, will be exposed. I am not aware that any moneyed influence has been exerted, or brought to bear, upon any individual in this body, to affect his judgment, or his free action, in relation to placing our banking institutions upon a safe basis. If we adopt a constitution without any of these checks and safe-guards,and leave the legislature to establish a system of banking with just such checks and restrictions as they may see fit to adopt, the first legislature that assembles under | Many men in this State, who are in favor of banking institutions being established here, if the prohibition is simply removed from our constitution, and the legislature is allowed to enact just such laws as they may see fit in regard to this matter, will vote against this constitution upon that ground, when they would vote for it if it contained proper safe-guards. This provision will recommend this constitution to the people when it is submitted to them for their adoption or rejection. ཐུབ I do not believe this day, that, as anxious as the majority of the people are for some system of banking in this State, a constitution would be adopted by the people of this State, without some safe-guards being thrown about the bill holders, to secure them against worthless issues of banks that the legislature might be induced to incorporate, if this matter was kept entirely to them. For these reasons, I am in favor of some kind of check, some kind of safe-guard, in the shape At all events it of deposits, and a provision rendering the stock holder individually liable. Mr. SKIFF moved that the committee rise, recan do no harm, and I think it will do gooi. port progress, and ask leave to sit again. The question being taken, the motion was not agreed to. Mr. PALMER. It seems to me, that if we were to discuss the questions before us, our speeches would be shorter, if not less frequent. The question at issue is the motion made by the gentleman from Jefferson, [Mr. Wilson,] which I do not consider as bringing before us the whole of this section eight. The question presented by that motion is, whether we will strike ont The clause proposed to be the latter clause of that section, and insert what is proposed by him. stricken out, provides that the transferer of stock shall be liable for six months after the transfer, and the transferce shall not be liable for six months after that transfer. Now it appears to me that that clause should be stricken out, if something better can be substituted. It is no: right, for one thing, that the stock holders in A bank should be liable for what is done aft r they cease to be stock-holders. Nor is it right to exempt any stock-holder from liability for six months after he becomes a stock-holder. For that reason I am in favor of striking that clause We would not impose such liabilities upon out. private partners, in firms for other business, for it would be unreasonable to impose such restric tions upon them as is here proposed to be st tached to banking. The question was then taken upon the amend ment of Mr. Wilson, and, upon a division, it was agreed to: ayes 15, uoes 10. Tuesday] TRAER-CLARKE-HALL-GOWER-PARVIN. The question then recurred upon the motion of Mr. Clarke, of Johnson, to strike out the section as amended, and, being taken, it was not agreed to, upon a division; ayes 7, noes not counted. Mr. TRAER moved that the committee rise, report progress, and ask leave to sit again. The question being taken, it was not agreed to. No further amendment being offered to the eighth section, Section uine was then read as follows: State Bank. "The general assembly may also charter a State Bank with branches, to be founded upon an actual specie basis." Mr. CLARKE, of Johnson. I move to amend this section by adding, after the word "specie," the words "or of the stocks of the United States or of interest paying states," so as to make this section conform to the provisions of the seventh section in relation to banking under a general! JAW. I do not know exactly what is meant by this ea of a State Bank. I presume it is not intended that the State shall own all the stock of this bank, but the bank will have something of the character of what is now called the Indiana State bank. As I understand it, the state does not own the stock of that institution, but, as under the general banking law, these banks are secured by stocks of other states. If that is the idea of the committee who made this report, I see no reason for having it upon a different basis than that of banks under a general law. Mr. HALL. I would suggest to the gentleman from Johnson, [Mr. Clarke] to modify his amendment so that it will read or on stocks as authorised by the seventh section of this article, or both." Mr. CLARKE, of Johnson. That will accomplish the object I have in view, and I will accept that in lieu of my amendment. The question being then taken the amendment was agreed to. Mr. TRAER. I move to amend the section by striking out the word "state" in the first line of this section, so that it will read: "The General Assembly may also charter a bank with branches, to be founded upon an actual specie basis, or on stocks, as authorised by the seventh section of this article, or both." [February 10th amined by the people, than we are, at this time. The legislature is left free to adopt either or both of these systems, as they may think proper. The gentleman from Johnson, [Mr. Clarke] does not wish the state to own stock. If he will look at the third section of this report, he will find that the state is prohibited from owning any of this stock. This provision here is only to enable the state to have some control over this bank; this striking out will confine the legislature to one system of banking, and that is what I object to. Let us leave both systems as the committee have reported, and when the legislature meets, if they see proper to establish the general banking law, they can do so. I am not any prophet or the son of a prophet. But I think that by the time the legislature comes to act upon this matter, the general banking law of Illinois will be in disrepute. And that is the system, I believe, which the gentleman from Johnson [Mr. Clarke] desires to see established here. Mr. CLARKE of Johnson. By no means. Mr. PARVIN. I am glad to hear that. But I do not know what system he would have. I would allow the legislature a choice in this mat ter We can throw certain restrictions around any law that may be passed, and I think this body have signified their intention to do so by refusing to strike out this eighth section, and I trust the convention will never strike it out, for and one which will hold amid the storms and it is the sheet anchor of our banking institutions, gales which we may feel sure we will have. I hope that the convention will refuse to strike out the word "state" and not restrict the legislature to any one particular system, when, by the time they meet, a large majority of the people will be opposed to that system. Mr. TRAER. I think my friend from Muscatine, (Mr. Parvin) is mistaken in the question before the committee. I do not understand that the motion is to strike out the section under consideration. I made a motion to strike out the word "state" because it appeared to me to be a contradiction of terms. We say in one section of this article, that the state shall never take stock in any banking corporation. And it seems to me that this idea of calling this a State bank, when the state has no part or parcel in it, is a contradiction of terms. I therefore moved to amend the section in that respect. I think the naming of this institution is a matter which should be left entirely with the stockholders. I would therefore, leave this matter of the name an open question, and only provide by general principles for certain restrictions, to be thrown Mr. PARVIN. I am sorry that the pruning around this system. The same provision in this knives of members are so sharp this morn-report is in the constitution of the State of Ining. They seem to be cutting and slashing all diana, with the exception of the word "state," around. I do not think we are to have a bank- and the words, " upon an actual specie basis." ing system, with proper securities around them, I think it would be just as well to leave out this without the action of the legislature. I am glad word "state," for if it is necessary to have it callthat we are not to do that here, I think the leg-ed by that name, there is no doubt that the stock islature will be better enabled to do this, after holders and general assembly will give it that this measure shall have been discussed and exname. So far as the matter of fact is concerned Mr. GOWER. I would move to amend the section so that it shall read that this state bank shall be called the "Bank of Iowa," instead of theState Bank." |