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ON THE GENERAL STATE OF THE CURRENCY.
1. Opposition to Small Bank Bills.
Before discussing farther the history of the Miners' Bauk of Dubuque, it seems proper to call attention to some points in the financial history of this period, that is, during the years 1836–38.
The people of this Territory in the main were opposed to the circulation of bank bills, especially of a denomination less than five dollars. Early in the session of the first Legislative Assembly of Wisconsin Territory, there was introduced in the House a bill' to continue in force an act of the Territory of Michigan to prevent the circulation of bills of a less denomination than five dollars. This bill by the suspension of the rules was rushed through the House; but on account of unfavorable circumstances did not pass the Council; a similar law was enacted later in the Territory of Wisconsin.
2. Scarcity of Silver.
The Iowa News early3 in January, 1837, says that as yet we can not complain to a very great extent as to the exceeding scarcity of paper money in this section of the country, yet the want of silver is unprecedented. By some this is ascribed to the influence of the Treasury Circular,4 but by others to the illegal circulation of notes of a less denomination than five dollars; if these notes were refused by everyone, in six months time there would be plenty of silver in circulation. In July a
1 Nov. 16, 1836.
Early History of Banking in Iowa
notice of the illegal issue by the Bank of Wisconsin of these notes of a less denomination than five dollars is copied from the Green Bay Democrat.
3. Stay of Execution.
In his inaugural message to the Legislative Assembly of the Territory of Wisconsin delivered on Nov. 7, 1837, the Governor (Henry Dodge) urged' that a bill be passed allowing the Stay of Executions for one year. In closing his discussion of this topic of his message he says : “Debts have been created, when bank notes of different banks were in general circulation in this Territory, by many of the most industrious and enterprising citizens who no doubt believed they would be able promptly to meet their engagements.” The bill failed to pass at this session although it was taken up for consideration several times.
4. Public Opinion in Regard to Banks.
The opinions of the people at this period in reference to banks seems to have been divided, irrespective of the lines of the party politics, into three classes: Those opposed to the granting of charters to private corporations for banking purposes, but in favor of a well-guarded system of free banks based upon sound financial principles; those not entirely in favor of the prevailing bank system, but who believed that carefully drawn charters should be granted to furnish a sound currency by the means of responsible banks located at home; those utterly opposed to any kind of paper currency and who wished for no other circulating medium than silver and gold. A typical statement from among the many found in the publications of this time is that of a writer under the pseudonym of “Interloper." He felt satisfied from the various signs of the times that a new era would soon commence in this country in relation to banking; and felt that public sentiment was rapidly changing on this
I See Inaugural Message, p. 3.
2 Published by request in Iowa News of January 18, 1837. First published in Milwaukee Advertiser.
subject, and that it would only be a short time until banking monopolies, “begotten by avarice, born in corruption and matured by fraud, which now throng the country, would be swept into oblivion; and a free banking system based on real capital and real responsibility will fill the void.” In this communication he stated that remonstrances against "our bank bill” had been generally signed by the busicess men and citizens, petitioning Congress to refuse its approval of it; and if this should be done, it would render some aid in producing "this desirable result in our young and growing Territory.” From this class and from the third class mentioned above, there were very many signers to the shower of remonstrances poured in upon Congress against its approval of the charter of the Miners' Bank of Dubuque, the Bank of Milwaukee and the Bank of Mineral Point.
The results, in part, of the second class is shown in the attempts to pass other and more carefully guarded charters such as that of the bill to incorporate the Iowa Bank in the First Legislative Assembly, 1836; and the bills to incorporate The Bank of Burlington and The Bank of Racine in 1837; and which produced the more conservative charter of The Bank of Wisconsin, located at Prairie Du Chien, which required one-sixth of the subscriptions to be paid in specie, and provided that the corporation could not contract debts to a greater amount than twice the amount of the actually paid up capital stock; the most prominent clause of all was that in regard to the "safety fund.”
The third class might have chosen for their spokesman John H. Baker, candidate to fill vacancy in the House of Representatives, who closes3 his “Card to the Voters" with the following sentence: "I am opposed to the whole banking system, believing that we have no use for any better money than gold and silver.”
5. Character of the Paper Money in Circulation,
In the early portion of 1838, meetings of the business men and citizens were held in the different towns to consider the state of the currency, and to fix the rate of discount at which the so-called "good bills" would be received in commercial transactions. The results of the meetings held at Galena, although without the Territory but immediately adjoining it, may be taken as an example. The first public meeting was held on January 29, 1838, and a committee was appointed to report about two weeks later the discounts at which the various bank bills would be received in trade. The rates of discount were: “At ten per cent., the notes of the Farmers' & Mechanics' Bank of Detroit, State Bank of Michigan, Farmers' and Mechanics' of St. Joseph; at fifteen per cent., the notes of the Bank of River Raisin, Erie & Kalamazoo, Clinton, Ypsilanti, Calhoun, St. Clair, Tecumseh, Washtenaw, Constantine, Macomb, Green Bay, Lake Erie & River Raisin R.R. Co., all other banks of Michigan and Wisconsin twentyfive per cent.; and the notes of all other Banks not receivable in the Galena Branch of the Illinois State Bank at ten per cent. discount."I
Not only was this portion of the Territory deluged at this time with innumerable counterfeits of various banks, including a large issue of counterfeits on the State Bank of Indiana, but also with a countless number of forged notes and notes of banks with no legal existence. An example of this last class even sprang into existence within the boundaries of this Territory. One sentence, in one of the many notices, in regard to the issues of this bank, The Prairie Du Chien Ferry Co. Bank, conveys to the modern reader a vivid idea of one of the queer financial views of this time. The sentence referred to is: “We have seen a bill purporting to be on the •Prairie Du Chien Ferry Co. Bank,' but we do not know whether the persons' who sign these bills as President and Cashier are men of property or not; yet, the safest plan will be to refuse them."
i Iowa News, February 17, 1838. 2 Iowa News, March 31, 1838.
A newspaper advertisement of one of the merchants of Dubuque, inserted in the Iowa News of April 14, 1838, shows some of the peculiarities of the currency of the time, and the light in which it was viewed, at least by one merchant:
Tis better from evil well forseen to run,
Than perish in the danger we may shun. My specie traps and Benton bullets being exhausted, I became overpowered with Wild Cat,' and in my own defense have shut the doors of my menagerie.
Now that I have got the animal conquered, those of my old friends and customers who are in debt to me will please favor me with a few more specimens of the breed. In the future, however, I will prefer the Sucker, Puke or Hoosier Tame Cat, and occasionally one of the old domestic species of Buckeye or Corncracker. In a few days my doors will be thrown open to public patronage, but I will never again entrust my person or property to those crazy animalculae imported over the mountains or lakes. The far fetched I leave to ladies.
CHARLES CORKERY. April 14, 1838.
In April, 1838, the circulation of the northern portion of Wisconsin Territory was made up almost wholly of the notes of the banks organized under the general banking law of Michigan. The Bank Commissioners, who had been appointed, were diligent in the performance of their duties and had reported among the long list of the banks that had forfeited all claims to public confidence the Bank of Manchester and Jackson County Bank. The notes of these two banks had constituted the principal portion of the circulation of Dubuque County up to this time.
I "A bank was started this year (1837) called the Prairie Du Chien Ferry Co. Bank. Handsome bills were issued. George W. Pine, President. H. W. Savage, Cashier. It did not circulate well here, as it had no charter. It did less damage than most of the wild cat institutions of that day.' P. 12, Annals of Prairie Du Chien, by S. Burrie.
2 Senate Exec. Doc. No. 38, 52d Cong. 20 Session, p. 34.