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Federal Reserve Bank of St. Louis

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MATERIALS REGARDING
INSURANCE OF BANK OBLIGATIONS IN IOWA, 1858-1865

Contents
Legislation
Abstracts from meetings
Correspondence and excerpts
Statistical data

•


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Federal Reserve Bank of St. Louis


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Federal Reserve Bank of St. Louis

LAWS OF IOWA.

125

CHAPTER 87.
AN ACT to Incorporate the St te Dank of I01111.

SECTION 1. Be it enacted by the General Assembl
the State if Iowa, That the State Bank of Iowa be and stat, Irk Incor•
the same is hereby incorporated with all the powers
hereinafter granted, and by that name shall be capable
of contracting and being contracted with, and of prosecuting and defending actions as tully as natural persons,
and of doing all other acts neessary to effect the objects
contemplated in this act by the creation of said corporation.
SEC. 2. That as soon as five or more branches of the rive or 'm ore
organize.s
brancht may
State Bank of Iowa. shall b3 organized as in this act is
authorized, the Ditectors of the said State Bank ofIowa
appointed by such branches, shall meet in Iowa City at
such time as shall be designated by the Board of Bank
Commissioners, who shall give ten days previous notice
to each branch, of the time ofsuch meeting,and provided
two-thirds of the whole number of such Directors shall wet M Iowa
be convened,they shall organize by taking an oath, dil- *city,
igently, faithfully, and impartially to perform the duties
imposed upon them by by this act, a certificate of which
oath, signed by each Director, shall be filed and pre- Elect Preet.
served in the office of the Secretary of State, and by
electing some one oftheir number as President, who shall
preside at the meetings of the Board and sign its official
documents; and thereafter the directory of the State
Bank shall 1 e composed of one Director, appointed by
each branch of said Bank, two-thirds of whom shall be
a quorum ;• and other branches may be organized under
such Directory as is herein provided.
SEC. 3. The Directors shall, when they deem it nec- Directors may eVice Pres.
essary, elect a Viee President, whose duty shall be pre- kctntaand
Sec'y.
scribed by the by-laws. They shall appoint a Secretary,
who shall keep a fair and true record of the proceedings
of the Bank. They shall keep an office in Iowa City,
kept at
which together with their books, papers, records, and Office
Iowa City.
accounts of every description, shalt at all times be open
•
to the inspection of any committee of the General As-


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Federal Reserve Bank of St. Louis

LAWS OF IOWA.

sendily, or either branch thereof; and of any Commissioner or Commissioners specially appointed for that
purpose by the General Assembly, or either branch
thereof, or by .the Governor of the State. They shall
procure and furnish each branch with notes for circulation, and decide on the amount to be furnished from
time to time to each, within the limits and agreeaby to
Furnilli ',ranch's the rules and restrictions prescribed by this
act. They
with antra.
may prescribe rules for the settlement of balances between branches, revise their by-laws and regulations
concerning charges for making collections, and cause
both to be made uniform, or as nearly so as may be expedient. They shall have power by themselves, or by
a committee of one or mure members of their own body,
Exatnino branch- or b." a special agent appointed by them for that purpose, whenever, and as often as they shall think proper,
to visit any branch, inspect its books, records and accounts, and all the evidences of debt due to and securities held by such branch, examine and ascertain the
amount of money and other property held by such
branch; examine on oath the President, Vice President,
r-duc cir- and Directors, and Cashier, and all other officers, agents,
clerks, or servants of the branch, touching its condition,
means and liabilities, they shall have power to require
any branch to reduce its circulation or other liabilities
within such limits as they shall, after full enquiry into
its condition, deem necessary to secure front loss either
the dealers with such branch, or the other branches of
Poufbl,
.
ino
hn
rra:
the State Bank of Iowa. They shall, as soon after the
porta.
first Monday
every month as practicable, publish in
some newspaper printed at Iowa City, a consolidated abstract ot the monthly reports of all the branches, showing their assets, liabilities and condition, which statements shall be recorded in a book or books to be kept
for that purpose. They may appoint an executive coinEx Committee' mittee of not less than three, of whom the Vice President shall be one, to act in behalf of the Bank in all such
cases as 2-•hmali be prescribed by the by-laws of said Bank,
Hot inconsistent with this act.
SEC. 4. The President, Vice-P,esident, Secretar y
Open to inApec•


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LAWS OF 141WA.

and all officers and agents of the Bank, shall each receive Compensation of
such compensation for their services as said Bank shall officers.
allow, which shall be assessed upon the several branches
of the State Bank of Iowa, in the ratio of their capital
stock. The Bank may also allow the executive coin- Expense of plates
mittee such compensation as it may deem just and reasonable, to be pahl by the several branches in the same
manner; and the expenses of procuring plates and printing notes of circulation, shall be paid by the several
branches in the ratio ot the notes of circulation received
by each.
SEe. 5. Each Director of the Bank, appointed by
the branches, shall continue in office until the first
of
day in February next after his appointment, and until Directrs.
his successor shall be appointed and qualified. Vacancies in the Board shall be filled by the branch by which
the appointment vacated was made. In voting, each Vacancies
member shall be entitled to two votes, and to one addi- Ratio of Voting.
tional vote for every fifty thousand dollars of the amount
ot capital stock paid into the branch represented by him
over one hundred thousand dollars, at the tme of such Term of officers.
voting. The President and Vice-President of the Bank
shall hold their offices for one year, and until their successors are appointed; but they may be removed by a
resolution of the Board. They and all other officers Take oath.
and agents of the Bank shall take an oath faithfully,
diligently, and impartially, to fulfill the duties of their
appointments, and not knowingly violate any of the Give bond.
provisions of this act.. They shall be required to give
bond in such sum,and with such securities, as the Bank
shall prescribe, and all vacancies in said appointment
shall be filled by the Bank.
SEC. 6. All notes designed for circulation by the
wk to forbranches, shall be turnished by the State Bank of Iowa ;:
lit
:
01r:
inches
but no notes shall be delivered to any branch until they trrer:ii ardnumare numbered and countersigned by sonic person authorized by the State Bank of Iowa to countersign the same
as register, and a full record of such numbering and
countersigning made in a book provided fur that purpose; and all such notes shall have stamped or printed


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Federal Reserve Bank of St. Louis

Mon. Ap

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LAWS OF IOWA.

on their face the words, "Registered by the State Bank
of Iowa." All notes so worn, defaced, or mutilated, as
Worn and &foe- to be unfit for circulation, shall be returned by the
ed notes exchanged and de- branch by which they were issued, to the Bank and an
stroyed.
equal amount of new notes received thereofor ; all such
notes so returned by a branch, shall be credited, and all
new ones delivered in their stead shall be charged to
such branch on the books of said Bank; and the notes
so returned shall be burned to ashes in the presence ot
the President or Vice President, and at least two of the
Directors of said Bank.
SEC. 7. Before the Bank shall deliver to any branch,
notes for circulation, it shall require such branch to pay
Branches to furnish stocks a s over or deposit to the credit of said Bank, as said Bank
security
for shall order, either in money or United States Stocks,
notes.
or interest paying State Stocks at their current value in
the city of New York, but in no instance above their par
value, an amount equal to twelve and one half per cent
on the amount of thenotes for circulation, which shall be
delivered to such branch. And so from time to time as
any branch, by the paying of an additional amount of its
capital stock, or by not having received the amount of
notes for circulation to which it was previously entitled,
shall receive an addhional amount of notes for circulaBranches deposit
8t6e1
"
as
'
Sat
tion
; such branch shall deposit with the Bank twelve and
ty
Fund for the
re
eemption 0 f one half per cent on the amount of notes so receiveel ;and
nodte
the stocks and money so deposited shall be denominated
the "Safety Fund," and shall be invested as hereinafter
provided, and held by the Bank as the property of said
branch, in trust for the benefit of the several branches
ot the State Bank of Iowa,and as a fund for the redemption of the notes of circulation of any one or more of
said 'ranches that may fail to redeem its notes, to be applied to that purpose in the manner pointed out in this
act.
SEC. S. All money so deposited or paid to the Bank
the on account of the Safety Fund by any branch, shall be
Bank holds
stocks.
under the direction of said Bank, invested either in interest paying Stocks of States or of the Vnited States.
Each branch shan be entitled to receive the interest ae-


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129
cruing on the stocks, in which its porti
on of the Safety Brandies receive
Fund shall have been invested, and in case
the interest.
of the insolvency of any branch, the stocks in whic
h the money of
such branch shall have been invested as afore
said, if the
proceeds of such stock shall be sufficient to
:
redeem its Ians‘T
re
ritins
outstanding notes of circulation, shall as
far as practica- ,1:yert'1 into tumble be first converted into money and appli
ed to that
purpose, before any part of the Safety Fund
belonging
to other branches, shall be so applied.
SEC. 9. The State Bank ofIowa shall notfurni
sh to any tik furnishe.
branch, circulating notes to an amount bearing
a greater proportion to the capital stock of said bran
ch actually
paid in and at the time remaining undiminished
by losses,
or withdrawal, than the proportion hereinafte
‘T .
icedrelle
r specified, hu
that is to say: On the first hundred thou
sand dollars,'
arid'
or any lesser amount of its capital, not more
than twice
the amount of such capital, on the second hund
red thousand dollars, or part thereof; not more than
one and one and three
three quarters the amount of such capital, over
one hun- ICZ.i2%!
dred thousand; on the third hundred thou
sand dollars dr"th9tu"d.
or part thereof,not more than one and a half the
amount
of such capital, over two hundred thousand;
nor shall
said Bank furnish to any branch circulating
notes ofany og,erAea tati
third
other denomination than of one dollar,two dolla
rs, three hundred thousand.
dollars, five dollars, ten dollars,twenty dolla
rs,fifty dollars and one hundred dollars. Of the notes
furnished
to any branch not more than ten per cent of
the amount
shall be in notes of one dollar each, not more
.
tentf
:
than ten Tahmeaurnoc
per cent in notes of two dollars each, and not
more than Vr"„be,:' each
twenty-five per cent shall be in notes of all deno
minations under five dollars, and not more than
fifty per
cent in notes of all denominations Under ten dolla
rs.
SEC. 1.0. If any branch of the State Bank
of Iowa Branch refusing
tyeetzimuriendr
shall refuse to pay its notes of circulation, or any
i.
ofthem,
solve n t, and
in gold .or silver coin, the lawful currency of
the United State U'k takes
possession.
States, on which payment shall be lawfully
"
demanded
at its banking house or customary place of doin
g business, during the usual banking hours, such
branch shall May
be deemed to have committed an act of insol
vency, and tngrr..1 legal
thereupon all its property, credits, securities,
liens and
17

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LAWS OF IOWA.

assets of every description shall forthwith vest in and be
the property,credits,securities,liens and assets ofthe State
Bank of Iowa,for the uses and purposes declared in this
act. And the said branch shall only be allowed to make
payment of any such lawful demand in silver coin where
t for
the sum so demanded does not exceed the amoun
laws
which silver coin is a legal tender according to the
deof the United States, and when payment shall be
manded on more than one of its notes at the same time,
ted for
the aggregate amount of such notes so presen
payment to the amount of one hundred dollars shall be
considered but one demand.
_ SEC. 11. The State Bank of Iowa, on receiving intormation that any branch has committed such act of
Slue Bank
of one or
n'Irm"'"nr,.; insolvency, shall torwith appoint a committee
imme°8 joratnmake
recnelver
shall
who
,
others
or
ors,
eolvout branch. more of its Direct
reand
ation,
inform
such
of
truth
the
diate enquiry into
satbe
shall
Bank
the
if
and
Bank;
port thereon to the
isfied from the report of the committee,that such branch
has suspended the payment of its notes in gold and silver as provided in section ten,(10) it shall forthwith
appoint a suitable receiver, or receivers, who shall take
immediate possession of the books, records, money, chodeses in action and property of such branch, of every
the
of
use
joint
the
scription, and hold the same for
other branches of the State Bank of Iowa, and the creditors of the failing branch, and the State Bank of Iowa
same in
6,„ pou no shall immediately provide money and place the
conmost
tIce,
such solvent branch or branches, as may be
such
of
venient for the purpose of redeeming the notes
failing branch,and shall give public notice thereofin some
newspaper printed in the place where such failing branch
is located, also in some newspaper ofgeneral circulation
published in Iowa City.
SEC. 12. Each solvent branch shall contribute in the
mveni branch's
ed, to the sum
make up losses ratio of the circulation to which it is entitl
of Insolvent
necessary for redeeming the notes of the failing branch, •
anch.
as provided in the preceding section, on the requisition
of the State Bank of Iowa, and may be remunerated for
such contribution from the Safety Fund, as sevn 88

Notes ta $100 one
docuand.


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Federal Reserve Bank of St. Louis

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'

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I

131
. money sufficient can be raised from that
fund, by a sale Reimbursed from
Safety Fund.
or hypothecation of the stock, funds, or other
securities
belonging thereto.
SEC. 13. The receiver or receivers appointed
•e es OTC
as pro- Recei
bond.
t vided in the eleventh sectio
n, shall be required to give
bond in such sum, and such securities as the State
Bank
of Iowa, or Executive Committee, shall judge suffic
ient,
and under the direction ot said Bank, shall proce
ed to
settle up the affairs ofsuch branch, and convert its assets
into money; the money so made shall be applied:
First: To reimburse all moneys which shall have been Reimburse a I I
moneys
advanced by the several branches, for the redemption taanchcs.f r m
of the notes and bills ot the insolvent branch, and
which
may not have been previously reimbursed from
the
Safety Fund.
Second:•
To reimburse all moneys advanced from the
Reimburse the
Safety Fund, other than moneys derived from that
Safety Fund
portion of the Safety Fund furnished by the failing branc
h.
Third: To the payment and discharge of all the
the Ilabiliti's
re- Pay
of insolvent,
maining liabilities of such branch : And
Fourth: The residue shall be divided among
thest0ekhold,"
stockholders of the failing branch, in proportion to
the "k""1"eft
stock by them respectively held.
SEC. 14. Ifany branch against which the State Bank
of Iowa shall have instituted proceedings on account of
Branch may ort h e State
any supposed act of insolvency as prescribed by the join
Bank,
eleventh section of this Act, shall deny having committed such act of insolvency, such branch may apply to
any court of competent jurisdiction for a writ of injuncenvtion to said State Bank of Iowa, to suspend all further Prove inredspecie,
nd receive its
proceedings against such branch as an insolvent Bank; and
mtesini,..r
and such court, after citing said State Bank of Iowa to
appear and show cause why such writ should not be
granted, and after the finding of a jury that such branch
has at all times continued, and still continues to redeem
in gold and silver coin, its notes of circulation, shall
make an order enjoining the State Bank of Iowa from
all further proceedings against such branch on account
of the supposed act of insolvency on which such proceedings were instituted, and thereupon all the property

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132

LAWS Oie IOWA.

and azsets ofsuch branch shall be restored to its 1)i rector!.
SEC. 15. If the State Bank of Iowa shall, in any case,
If suit, Irk Adis fail to proceed in the manner prescribed in the foregoprocee d against insolvent inm sections of this Act, in providing for the payment of
any holder o f
a p- the outstanding notes of circulation, and in closing the
notes maycourt
ply to a
for a writ to affairs of any branch that shall have committed an
compel It.
of insolvency, the holder of any of its notes of circu;a.
tion, or other creditor of such branch, may, in case payinent of such notes of circulation or other claim has been
refused when lawfully demanded, and remains unpaid,
apply to any court of competent jurisdiction for its writ.,
commanding the State Bank of Iowa so to proceed; in:
it shall be the duty of such court, after citing such Bank ti
to appear and show cause why such writ should not 14,
issue, and upon the finding of a jury that such act ot
insolvency has been committed, to issue their writ
manding said Bank forthwith to proceed hi the mannet
pointed out in the preceding sections of this Act, to pro tr
vide for the payment of the outstanding notes of cud
branch, close up its affairs, and make application of ite 1111
assets.
6
SEC. 16. That if any branch shall neglect or reins C
sing to reduce to comply with any order of the State Bank of Ion
circulation, Increase specie, requiring such branch to reduce its circulation or °the
pay in stock, or
or obey the State liabilities, or provide a larger amount of specie or °the
B'k, may be enjoined by an y means,or to pay in its stock,or to do,or to cause to be dont .;
district or higher court, MI pe• any other matter or thing which said Bank may deem net:.
tition of B'k er
ry diet. there- essary for the security of such branch,or any other brand ..
or branches, said Bank or any Director thereof, acting h.
for said Bank, may apply to any Judge of the Supreme A:
Court or District Court, or any Judge of a superb! >,
Court, or to any Judge of any other Court not inferke
to the District Court, by petition, in which the Stan
Bank of Iowa shall be made petitioner, and tht...
branch implicated defendant, setting forth the sir
stance of such order, or orders, and such neglect or a t
fugal on the part of the branch, its officers or agents, u .
comply therewith; and if the President. Vice-President
or any Director of the Bank, shall make affidavit of tlf-d
truth of the facts therein stated, it shall be the duty c


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Federal Reserve Bank of St. Louis

LAWS OF IOWA.

133
cli Judge to allow an injuncti
on, and to enjoin such
.ranch, its officers and agents, and
all others in its emor connected therewith, from
doing, or suffering,
r permitting to be done, any busi
ness whatever as .a
Link, and from intermeddling with
, or in any manner
sposing of, the books, papers, moneys
, choses in action,
sets, or property of the branch,
until the further order
I the Supreme Court as soon as an inju
nction is allowed.
SEC. 17. Upon the allowance
of such injunction, the
operty, credits, securities, lien
s and assets of every ireveoen:liv,,we;
,cription, of such branch, shall
forthwith vest in the in
aik;',:r1,:73717,
itate Bank of Iowa, who shall app
oint a receiver to take br" +
:
ssession of the same as provid
ed in the eleventh seen of this Act. A certificate of
appointment of such
_elver, by the Judge,or Court,or cler
k thereof, making
same, shall be sufficient authorit
y to him to take
=session of the books, property and
rights of every
,•eription of such branch, and shal
l be full authority
. the Sheriff of the county where the
branch is located, aiu,,,11.•I'ld..r,,,,
# take and give full possession of
such books, property.
i„.-.
•d rights, with the aid of the cou
nty, if required; and
ad Bank receiver shall be govern
ed by the provisions
'this Act as•provided in cases of sus
pension; and upon
.e dissolution of such injunction,
or a discontinuance
such suit by the Bank, all the .rig
hts and property of
It branch shall be restored to and
vest in such branch.
SEC. 18. Natural pers
ons, not less in number than
:e, may associate and form branch
es of the State Bank
'Iowa, for the purpose of carryi
ng on the business of r,,err%t
in riimay
;Iking, each at such place in this
State as shall be de4nated in the certificate hereinaf
ter required to be
Fide, subject to the contingencies,
restrictions, condi:lls and liabilities prescribed in
this Act.
SEC. 19. Persons associating to
form a branch shall,
,der their hands and seals, mak
e a certificate, which
..all specify.
(
ird: The name assumed by suc
h branch, and
'oh it shall be known in its dealings
, in which name ,..,,,,,1'.r.i.o.
141 be included the name of the city
, village or town
which its banking operations shal
l be carried on.


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ot, IOWA.

Sexond: The amount of the capital stock of such .
c.PItai mock. branch and the number of shares into which the same i,
divided.
!Came, residence
Third: The name and place of residence and the;
and shares of
each stockhold- number of shares held by each member of the Company.!
er and the date
of incorporatru
Fourth: The time when such company shall have
been formed.
Which certificate shall be acknowledged before aJu-of the Peace or Notary Public, anti shall be recur.
Um
Certificate acIeedded and
rd
k n:er
ded by the Recorder of the county where such branch
is to be established, in a book to be kept by him for that
purpose, which shall at all times during office hours be
kept open for the inspection ofany person wishing to ex
t amine the same; one copy of which certificate, duly.certieXyfloNt:tel.h
' tied, shall be transmitted to the Secretary of State, who
shall record and carefully preserve the same in his oflicv. 4
and another to the Bank Commissioners in this act *;
named, until the organization ofthe State Bank ofIowa
and thereafter to said Bank.
SEC. 20. The officers of each branch shall at the end
Statement of
names, resIden- of every month, cause to be prepared a statement of th )
ces and shares
of stockholders number, names and place of residence of each stockhold
l
up.dsaMposta
Sle
el
h sh er in such branch, also the amount of stock owned lo
be:
Mum bele evl- each, and the date of the transfers of any stock with th,
denee In an y
suit.
names of the transferer and transferee,one copy of wh.,
statement shall be posted up in some conspicuous plea
in the Bank,and one copy shall be caused by the Bali
to be filed in the office of the Recorder of deeds in tik
county wherein such branch is located, which last thes.
tioned copy or a certified copy of the same under tit :
hand of the Recorder shall be prima thcie evidence it I
any court of justice in this State in a suit between tit.
branch or State Bank of Iowa and any third person.
SEC. 21. No branch shall be permitted to comment',
carry on the business of' banking under this act, ul
or
.
•;;`,17,7,,Vrcav
less its capital stock shall be at least $50,000, nor sha:.s
the capital stock of any such branch ever be increase
to exceed $300,000.
At least fifty per cent of the capital stock of each brew.
shall be paid in gold and silver coin, and shall be in th


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135

nil possession 4nd bona fide the property of the branch
idthe time of the commencinent ofits banking busines
s,
and the remainder of the capital stock of such branch Zol per ce nt to
paid I n
shall be paid in gold and silver as aforesaid in install- specie
at commenc'mt.
ments, each of at least ten per cent on the whole amount
of capital subscribed, as frequently as once in every four
successive months, front the time of commencing busiRemainder paid
ness until the whole amount ofsuch capital shall be paid In.
up. Provided, That the Directors may postpone the pay ments of the deferred installments, or any part thereof,
to the branches when satisfied that the public interest
does not require them to be paid as frequently as above
provided for.
SEC. 22. Ifany shareholder or his assignee shall fail
stockheld'rs
to pay any installment on his stock when the same shall Any
falling to p a y
his Installm'nts,
be required to be paid, the branch may sell said stock hi
s stock sold
after notice ii
at public auction having given three weeks previous no- given.
tice thereof in a newspaper published in the county
where the branch is located,(and having mailed a written notice to such delinquent shareholder or his assignee)
to any person who will pay the highest price therefor,
not less than the amount unpaid thereon; and the excess,if any, after paying the expenses of the sale, shall
be refunded to the delinquent stockholder.
If no bidder can be found who will pay for such
stock, Ifeeisitintbcirasantnnocorh.
the amount unpaid thereon to the branch, and costs of
advertisement and sale, the amount previously paid shall
be forfeited to the branch, and such stock may be subsequently sold in such manner as the branch may order.
The capital stock of each branch shall be divided into
oarc:
ei
shares of one hundred dollars each, and a stock book Rapotrdwof s'
sit
shall be kept by each Branch Bank, showing who are book.
the stockoolders, and what amount is held by each individual or company, which stock shall be assignable
only 'on the boOks of the branch in such manner as its Stock transferra.
by-laws shall prescribe, but no shareholder shall have baenekxatvIZI
holder I
power to sell or transfer any shares held in his own right oder Med
B'k.
for the purpose of escaping liability when a Bank is involved, or so long as he shall be liable either as principal, debtor, surety, or otherwise, to the branch for any


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LAWS OF IOWA.

debt, nor shall such shareholder, when liable to the
branch for any debt that is overdue, be entitled to receive any dividends, interest or profit on such shares so
long as such liability shall continue, but all such dividends, interest or profits shall be retained by the branch
and applied to the discharge ofsuch liabilities.
SEC. 23. No branch shall take as security for any
loan or discount, a lien on any part of its capital stock,
Loans secur'd
personal prop- or any other than personal security and the same seenerty only.
rity, both in kind and amount,shall be required of shareholders, as of persons not shareholders; and no branch
shall be the holder or purchaser of any portion of its
capital stock, or of the capital stock of any other incorporated company, unless such purchase shall be necessary to prevent loss upon a debt previously contracted
No branch
shall in good faith, on security which at the time was deemed
It.
buy
own or
any oth'r stocks, adequate to insure the payment of such debt, independerii of any lien upon such stock; or in case of forfeitures
of stock for the non-payment of installments due thereon,
as provided in the twenty-second section; and stocks so
purchased shall in no case be held by the branch so purchasing for a longer period of time than six months, if
the same can be sold for what the stock cost, or at par.
SEC. 24. In all elections of Directors, and in decione vat to each ding all questions at meetings of the stockholders, each
share,
share shall entitle the owner thereof to one vote ; stock
holders may vote by proxies duly authorized in writing,
but no officer, clerk, teller or book-keeper of the branch
Proxies allowed, shall act as proxy, and no stockholder whose liability to
n t n o offisuceer
thall act as
h the branch is past due and unpaid shall be allowed to
vote.
SEC. 25. The affairs of each branch shall be managed
by not less than five nor more than nine Directors.—
No. of Directors
an d qualleca• Every Director shall be a citizen of the United States,
twn.
and shall during his whole term of service reside in this
State.
Each Director shall take an oath that he will, so far
Directors take as the duty devolves on him, diligently and honestly adoath.
minister the affairs of the branch, and not knowingly
violate or willingly permit to be violated any of the pro-


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s of this Act; that he is a bona fide owner in his
own right, ot the stock standing in his name on the
books of the branch, and that the same is not hypothe- Oath filed with
Co. Recorder.
cated, or in any way pledged as security, for any loan
obtained or debt owing; which oath, subscribed by himselfand certified to by the officer before whom it is taken,
shall be filed and carefully preserved in the office ofthe
Recorder of the county in which the branch is located;
but no person shall be President or Director of more
than one branch at the same time.
SEC. 26. The stockholders collectively of any branch,8,
ockholderecol.
shall at no time be liable to such branch, either as prin- lectively not to
owe over three
cipals, debtors or sureties, or both, to an amount exceed- 6fthe of amount
of paid-in rapt*three-fifths part of the capital stock of such branch, 'al
then actually paid in, and remaining as capital stock,
nor shall the Directors, collectively, be so liable to an rcerect otbraan
amount exceeding one-fifth part of the stock actually fifth.
paid in, standing in their names, and of which they are,
collectively, the bona fide owners in their own right.
SEC. 27. The Directors of any branch, first elected,
shall hold their places until the first Monday in January Electloa of Dirernext thereafter, and until their successors shall be elected roffiacTi.'nu
and qualified; all subsequent elections shall be held annually'on the first Monday of January, and the Directors
so elected shall hold their places for one year, and until
their successors are elected and qualified; any Director removing from the State, or ceasing to be owner
of the requisite amount of stock, shall thereby vacate
his place. Any vacancy in the Board shall be filled by now tilled.
appointment by the remaining Directors; the Director
so appointed shall hold his place until the next annual
election; and if, from any cause, an election of Directors
shall not be made at the time appointed, the branch shall
not for that cause be dissolved, but an election may be
held on any subsequent day, thirty days notice thereof
having been given in a newspaper printed in the county
where the branch is located.
SEC. 28. Every branch authorized to carry on the
Each branch a
business of banking under this Act, shall be held and Zilrbli.r b°4
adjudged to be a body corporate, with succession, from
18


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the date of its certificate of association until the first day
of July, A. D. 1878, and thereafter until its affairs can
Powers.
be closed; and by its corporate name shall be competent
to contract, prosecute and defend actions of every description, as tally as natural persons; and process against
such branch may be served upon its President or Cashier,
or by leaving a copy thereof at its usual place of business, during the usual business hours.
Each of said branches shall, during the term aforesaid,
if so long it shall comply with the provisions of this Act,
business.
have power to issue notes for circulation furnished it by
the State Bank of Iowa, to loan money, buy, sell and
discount bills of exchange, notes, and all other written
evidences of debt, except such as it shall be prohibited
by this Act, from buying, selling and discounting; but
nge
no such loan shall be made on any note, bill ofexcha
s
month
four
than
more
g
havin
or other evidence of debt
dee
receiv
to
power
have
to run before maturity; shall
posits; buy and sell gold and silver coin and bullion;
collect and pay over money, and transact all other business properly appertaining to banking,subject, however,
to the provisions and restrictions of this Act; May acquire, hold and convey such real estate as may be
necessary for the convenient transaction of its business,
and no more; but may, however, acquire title to any
real estate pledged to secure any debt previously contracted, or purchased on Pn execution or order of sale,
to satisfy any judgment or decree in its favor, or which
estate,
Hold real
shall have been conveyed to it in payment of any previous debt, but shall xiot hold any real estate so acquired
longer than in the judgment of the Board of Directors,
is necessary to save the said branch holding such real
estate from loss, and it is hereby made the duty of the
Board of Directors of each branch to otter any real estate
givso acquired for sale at least once in each year, first
in
hed
publis
aper
newsp
some
ing thirty days notice in
time
the
of
ed,
situat
is
estate
real
the county where such
and place of such sale, if any newspaper be published
in such county, and if not, then in some newspaper published the nearest thereto; and at such sale, if the amount


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bid for such real estate be sufficient to reimburse the
said branch in the amount for which such real estate was
taken by the branch, with interest and costs, then it
shall be the duty of the Board of Directors ofsuch branch
to sell and convey such real estate, but not otherwise,
unless in their judgment it be deemed necessary for the
interest of the said branch to do so.
SEC. 29. No branch shall at any time issue or have
no;
titreula
in circulation any note, draft, bill of exchange, acceptthan
.
ed
t
on
w
r
r
:
tf
t
e
2
ance, certificate of deposit, or other evidence of debt,
which, from its character or appearance, shall be calculated or intended to circulate as money, other than such
notes of circulation as are by this act described, and
which such Bank is by this act authorized to issue for
the purpose of being circullted as money.
SEC. 30. Each branch shall receive at par at the the Ira =hes
at
,:tr,sta=acll
.office or banking house of such branch, in payment of 2
par.
of
bills
hand,
of
notes
for
branches,
debts due at such
exchange, or other evidence of debt, discounted or purchased by, or belonging to such branch, the notes of
circulation issued by any other branch of the State Bank
of Iowa.
SEC. 31. Each branch shall at all times have on hand
in gold and silver coin in its vault, an amount equal to Branch have 25
per cent specie
at least twenty-five per cent. of the amount of its out- on hand.
standing notes of circulation; and whenever the amount
of its outstanding notes of circulation shall exceed the
above named proportion, no more of its notes shall be
nolth ai lesse
paid out, or otherwise put in circulation by such branch, Shalloamount
ta safe.
nor shall such branch increase its liabilities by making
any new loans or discounts, other than discounting or
purchasing bills of exchange, payable at sight, nor make
any dividend of its profits, until the required portion between its outstanding notes of circulation and gold and
silver coin on hand shall be restored.
SEC. 32. Each branch of the State Bank shall be re- Branch keep 25
per cent of dequired to keep in its vaults over and above the amount posits on hand.
required to be kept for the protection and redemption
of its circulation, as requiied in the last preceding section, at least twenty-five per cent. of its current deposits,

!

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and shall be prohibited from paying interest on current
deposits.
Sze. 33. No branch authorized under this act shall
Branch must not
Be In debt over at any time
be indebted or in any way liable to an
two.thIrds of Its
capital "twk• amount exceeding two-thirds of its capital
stock at such
time actually paid in, and remaining as capital stock
undiminished by losses or otherwise, except on the following accounts—that is to say:
1st.- On account of its notes of circulation.
2nd. On account of moneys deposited with or collected by such branch.
3rd. On account of bills of exchange or drafts drawn
against money actualy on deposit to the credit of, or
due to such branch.
4th. Liabilities to its stcckholders on account of
money paid in on capital stock, dividends thereon, and
undivided profits.
Nor shall any branch, either directly or indirectly,
pledge, hypothecate, or exchange any of its notes of cir-.
Not not to be culation for the purpose of
procuring money, to be paid
exchanged fo r
capital stock. in on its capital stock, nor pledge
or hypothecate directly or indirectly, any of such notes to be used in its
ordinary banking operation.
Sze. 34. No branch shall, during the time it shall
Cva
irtians
itock not
continue its operations as a branch, withdraw or permit
to be withdrawn, either in form of dividends or loans to.
stockholders,for alonger period oftime than four months,
' or in any other manner, any portion of its capital stock;
Det:
ir i4; zd y do;
e and if losses
shall at any time have been sustained by
nett profits,
any branch, equal to, or exceeding its undivided profits
then on hand, no dividends shall be made, and no dividends shall ever be made by any branch while it shall
continue its banking operations to an amount greater
than its nett profits then on hand, deducting therefrom
its losses and bad and suspended debts; and all debts
due and unpaid for a period of six months, unless the
same shall be well secured, and shall be in the process
of collection,shall be considered bad or suspended debts,
within the meaning of this section.
Sze. 35. The Directors of each branch shall semiNo inter'st on deposits.


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annually on the first Monday in May and November $,:oi anti:1*i div.
' itle.alls.
declare a dividend of so much of the nett profits of the
branch as they shall judge expedient and as shall be approved by the State Bank; and on each dividend day
the Cashier shall make a trill clear and accurate state- ca.hier's bank
show.
ment of the condition of the branch as it shall be on nateinent
ing—
that day, after declaring the dividend, which shall be
verified by the oath of the Cashier, President, and two
of the Directors; and similar statements verified in like
manner, shall also be made on the first Monday in each
month in each year, which statement shall contain:
let. The amount of the capital stock actually paid The eapiel etck
in, and then remaining as the capital stock of the branch.
2d. The amount of the bills or notes of the branch mil. el colathen in circulation, specifying the amount of each denomination.
3d. The greatest amount in circulation at any time
since the making of the last previous statement, as shall aznavonceirteitae:
have been exhibited by the weekly statements of the
Cashier, specifying the time when the same occurred.
4th. The amount of debts of every kind due to the
branches of the State Bank of Iowa, the amount due to The debt'',
other Banks of the State, and the amount due to Banks
not of this State.
5th. The amount due to depositors.
The depoaita,
6th. The total amounts of debts and liabilities ofevery
description, and the greatest amount since the making The debts ofkinds, all
of the last previous statement, specifying the time when
the same occurred, as exhibited by the weekly statement of the branch.
7th. The total amount of dividends declared on the
The dividends,
day of making the statement.
8th. The amount of gold and silver coin and bullion
The gold and sa.
belonging to such branch and in its possession at the time "
v ,
of making the statement, designating the amount of
each.
9th. The amount subject to be drawn at sight, then The exchange,
remaining on deposit with solvent Banks, or Bankers of
the country, specifying each city or town, and the
amount deposited in each.


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10th. The amount then on hand, of bills or notes issued by branches of the State Bank of Iowa, the amount
The enrreney, issued by other Banks of this State, and the amount issued by Banks not of this State.
11th. The amount of balances due from branches of
halsonee, the State Bank of Iowa, the amount due from other
The
in
banis,
Banks of this State, and the amount due from the Banks
not of this State, excluding in the latter case, deposits
in the cities of New York, Philadelphia, Boston, Baltimore, and other cities and towns, subject to sight drafts.
12th. The amount on hand of bills, bonds, notes, and
other evidences of 6Iebt, discounted or purchased by
he b:!le
re''iv" the branch, specitying particularly the amount of suspended debts, the amount considered good, the amount
considered doubtful, and the amount in snit or judgment.
13th. The value of real and personal property held
nacedbitle„,'"I'e for the convenience of the branch, specifying the amount
of each.
14th. The amount of real estate taken in payment
The real estate,
of debts due the branch.
15th. The anidunt of undivided profits of the branch.
The undlitt profIt&
16th. The total amount ofthe liabilities to the branch
The liabilities of
Direetors.
by the Directors thereof, collectively, specifying the
gross amount of suce liabilities as principal debtors, and
the gross amount as endorsers or sureties.
17th. The total anion
. nt of liabilities to the branch of
thereof,
the
stockholders
collectively specifying the gross
The liabilities of
,
thoidtrs• amount of such liabilities as principal debtors, and the
gross amount as enO.orsers or sureties; which statement
'shall be forthwith transmitted to the State Bank ofIowa,
and the Auditor of State.
An abstract of every statement, showing the condition of the branch, shall be immediately published by
t he branch in some newspaper printed in the county
Ptatement putwhere such branch is situated, a copy of which statement
shall be sent to each branch of the State Bank of Iowa.
SEC. 36. The General Assembly shall never impose
any greater tax upon property employed in banking un-


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der this act, than is or may be imposed upon the prop- Tax on B'k stock
erty of individuals.
SEC. 37. Each branch may take, receive, or charge
on any loan or discount made, or upon any note or bill
and
of exchange, or other evidence of debt, discounted or Interest
count at 10 per
cent ti1i1343.
purchased by them, interest at the rate of ten per centum per annum on the amount of any such note, bill of
exchange, or other evidence of debt so discounted or
purchased and no more, until the first day of January,
1863, after which time no more than eight per cent shall
be so taken, received or charged. Provided, however,
that interest may be reserved or taken in advance at the s.iokwedid.scmat a 1time of making the loan or discount, according to the
usual rates of banking, or as calculated in Rowlet's tables; and the knowingly taking, reserving or charging
on any debt or demand discounted or purchased by any rasthulfourefteui.ts the
branch, a rate or interest greater than that allowed by
this section, shall be held and adjudged a forfeiture of
such debt or demand, but the purchase of a bona fide
bill of exchange or note payable at another place than
the place of such purchase or discount, and the taking
or reserving interest thereon at the rate aforesaid, from purchase Of ea.
the time of such purchase or discount until the maturity ;
cilumge not usu.
of such bill or note, shall not be held usurious, although
exchange on the place where it is made payable is at
the time of such purchase or discount, worth a premium ; nor shall the discount or purchase of a bona fide
bill or note, payable at a place, between which and the
place of discount or purchase, there may be a diflerence
in exchange, and the taking in addition to the rate of
interest aforesaid the rate of exchange between such
places, be deemed usurious: Provided, that no loan
to, or discount in favor of any Director or stockholder Lean to Director
Re., nut
in which more than such interest as is allowed in this ed'
section shall be taken, reserved, or charged, shall be
forfeited, but the same shall be valid against such party:
Provided, further, that in no case shall more than the Rate of exchange
current rate of exchange between such places, be taken.
SEC. 38. The total liabilities of any person, or of any
company or firm (including in the liabilities of a compa-


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IOW .1.

ny or firm, the liabilities of the several Members thereof,) to any branch as acceptor or acceptors of bona fide
xo one person or bills of exchange payable out of this State, shall at no
firm can be indebted more time exceed one-fourth of the amount of the notes which
than one•fourth
of the circula- such branch is authorized to circulate, exclusive of litiun.
abilities as acceptor or acceptors, one-tenth, and exclusive of all liabilities on such bills of exchange one.
twentieth part of the amount of such notes.
No branch shall at any time pay out on loans or discounts, or in purchasing drafts or bills of exchange, or
in payment of depositors, nor shall it in any mode put
in circulation the notes of any Bank or Banking ComN;utbr,Po.
nchb
notes into eircu•
pany which notes shall not at that time be receivable at
tattoo.
pal: in payment of debts by the branches so paying out
or circulating such notes, nor shall it knowingly pay
out or put in circulation any notes issued by any Bank
or Banking Company which at the time of such paying
out or putting in circulation is not redeeming its notes
in gold and silver.
All notes, bills, and other evidences of debt, excepting
bills of exchange, discounted by any branch, shall be
Bzdereepe:t yaatt made by the terms thereof; or by
special endorsement,
to branch only.
payable solely to such branch, and no such evidence of
debt shall be assignable except for collection, or for the
following purposes:
1st. To pay and redeem the circulating notes of such
Shen assignable
branch.
2nd. To pay other liabilities of such branch, and
after such liabilities shall have been discharged;
3rd. To divide among the stockholders on their stock.
No branch shall be permitted, in receiving payment
at
its banking house, or other places, than where the
No evasion of the
usury law,
same was payable, of any note, bill, or other evidence
of debt, due to such branch, and payable at a place other
than its banking house, to receive in addition to the
amount of such debt and the legal interest due thereon,
Le;al cos t s a Ilowed
any sum whatsoever as premium, exchange or damages.
Provided, That nothing in this section contained, shall
prevent such branch from receiving damages allowed


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by law upon any bona fide bill of exchange, duly protested for non-acceptance or non-payment.
SEC- 39. All transfers of notes, bonds, bills of exchange,and other evidence of debt owing to any branch, N„','ir,arniTeLnts,
or of' deposits to its credit; all assignments of mortgages y,:ditTi4,7::
or other securities on real estate, or of judgments or de- sneut azdscylsoird.e d
crees in its favor; all deposits of money, bullion, or other
valuable thing for its use, or for the use of any of its
stockholders or creditors; all payments of money made
after the commission of an act of insolvency, or in contemplation thereof; with a view to prevent the application of its assets in the manner provided by this act, or
with a view to the preference of one creditor to another,
except in payment of its circulating notes, shall be held
utterly null and void.
SEC. 40. It'the Directors of any branch shall knowAny Violation ot
ingly violate, or knowingly permit any of the officers, e
t taletli Pfourtt':
agents or servants of such branch to violate any of the ore of privileg.,
provisions of this act, all the rights, privileges and franchises of such branch shall thereby be forfeited; such
violation shall,• however, be determined and adjudged
by a Court of competent jurisdiction, agreeably to the
laws of this State and the practice of such Court, before
the corporation shall be declared dissolved, and in case Directors did such violation, every Director who participated in, ;;I:lue'llY repo".
or assented to the same, shall be held liable in his perional and individual capacity for all damages which the
branch, its stockholders, or any other persons, body
politic or corporate shall have sustained in consequence
of such violation.
SEC. 41. Every President, Director, Cashier, Teller,
Clerk or Agent of any branch, who shall embezzle, ab- DDshancr
'
otthvco;i
stract, or wilfully misapply any of the moneys, funds, plinighed.
or credits of such branch, or shall without authority
from the Directors, issue or put in circulation any of the
notes of such branch, or shall without such authority,
issue or put forth any certificate of deposit, draw any
order or bill of exchange, make any acceptance,sign any
note, bond, draft, bill of exchange, mortgage, or other
instrument of writing, or shall make any false entry on
19


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, OF D.W.A.
LAW:

any book, report or statement of the branch, with an intent in either case to injur r defraud such branch,
corpoor to injure or defraud any other company, body
rate or politic, or any individual person, or to deceive
of
any officer or agent appointed to inspect the affairs
any brauch, or shall make, or shall omit to make, or shall
advise or consent to the making of any report or statebe
ment roluired by this act, in such manner as shall
,designed to evade the provisions .t this act, shall be
.
deemed :runty ot a felony. and upon conviction thereof
not
labor
hanl
at
ntiary
Penite
the
shall be Confined in
less than one nor more than twenty .vears.
bc i
SF.r. 42. Stockholders in branches, shall e tell
t he
of
rs
credito
time
to
.le
and severally I; I
and
over
,
olders
stockh
the
of which they are
wkfol,1.•rs in. branch
to an amount
dividually
aoove the amount of st.ick by them held,
all its liabiltI)r
held
equal to their respective shares so
and no
olders
stockh
ities. accruing while they remain
should
and
ty,
liabili
transfer ot stock shall effect such
be
assets
its
and
,any such branch become insolvent,
1,lonete,r,t°,11,74k
stockits
ies,
liabilit
found insufficient to pay its debts and
in proholders may be compelled to pay such deficiency
should
portion to the amount of stock owned by each, and
duthe whole amount for which stockholders are indivi
be found
ally responsilk!, as provided in this section,
all the
of
nt
payme
the
to
uate
inadeq
be
to
in any case
ation
residue of the debts of any branch after the applic
the
then,
debts,
such
of
nt
paythe
the
to
of its assets
their
t
of
accoun
on
olders
stockh
trom
moneys duo
y
individual liabilities as such,shall be distributod equall
to
tion
in
propor
,
branch
such
of
rs
among all the credito
this
the amount due to each ; the personal liability in
owned
stock
the
above
and
section provided tor, is over
by stockholders, and any amount unpaid thereon.
SEC. 43. The term stockholder or shareholder, as
de.
.older'
Sttizeekdh
used in this act, shall apply not only to such persons
as- appear by the books of the association to be such,
but also to every equitable owner of stock, although the
same may appear on such books in the name of another
person, and also to every person who shall have advanc-


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ed the installments or purchase money of any stock in
the name of any person under twenty-one years of age.
and while such person remained a minor to the extent of
such advance and also to every guardian or other trustee, who shall voluntarily invest any trust funds in such
stock, and no trust funds in the hands of such guardian
or trustee shall be in auy way liable under the provis- Guarani stockions of this act, by reason of any such investment, nor
shall the person for whose benefit any such isivestment
may be made, be responsible in respect to such stock
until thirty days after the time when such persons respectively become competent and able to control and
dispose of the same ; but the guardian or other trustee
making such investment as aforesaid, shall continue re- Trustees stocksnonsible as a stockholder, until such responsibility de- 119Iders.
volves upon the person beneficially interested therein,
and in respect to stock held by a guardian or other trustee under a transfer of the same by a third person, or
under positive directions by a third person for such investment, the person making such transfer or giving
such directions, and his executors and administrators ft4,upaorndthaip7 a
shall, for the purpose of this act be deemed a stockholder, and the estate of such person, if he be deceased,shall
be responsible for the debts and liabilities chargeable on
such stock according to the provisions of this act.
SEC. 44. The General Assembly may alter or repeal The
Legislature
this act at pleasure, in the manner provided in the Con- rmeapLd!dt"
and
stitution ot this State, but no act altering or repealing
this act, shall impose any injustice or wrong upon the
stockholders of any branch.
SEC. 43. Every branch shall have power to make
of
all necessary and proper by-laws lor the management By-Laws
branches.
and control of its business, and to fix and regulatt, the
rate of charges for making-collections, subject to be controlled therein by the State Bank of Iowa.
SEC. 46. No branch shall issue any notes intended
for circulation as money, except the n«,tes furnished for N,tem."le i°41°that purpose by the State Bank of Iowa, and all such
notes shall be payable at the branch by which they are
issued, in gold and silver coin, the lawful currency of


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4.

the United States, as provided for in section ten of this
act, on demand; they shall be signed by the President
.or Vice President of the proper branch, and counterKtirgnag. coun signed
by the Cashier thereof, made payable to
bearer, and shall be negotiable by delivery; all other
evidences of debt, issued by any branch, shall be negotiable or transferable in the same manner as if issued by
Certi
tt
pa ya
fica
le Ve
pre a natural person, and shall be binding
on the branch.
der.
whether under seal or not; and all such evidences of
debt, other than notes of circulation,shall be payable to
the order of some person therein named.
SEC. 47. No branch shall put in circulation in this
sgne.alc lorrc;,1-Igl- State, the bills or
notes of any Bank or Banking Corn.
till!prrlibited.
pany out of the State, except such as are received in the
usual course of business; nor shall any branch either
direbtly or indirectly exchange its bills or notes intended to circulate as money with any bank or banking
company out of the State, or with the agents of such
bank, for the bills or notes of such bank or banking
company, with a view to circulate the same in this
State.
Sr.c. 4S. When any number of persons shall have
krreirp
:associated together for the formation of a brai.ch as
pronotice,
provided for in section nineteen, they shall give twenty
days public notice in sonic newspaper published in the
town or city where it is proposed to establish such
of their purpose to open a book for the subscripStock Docks o. branch,
.
Ted
ton,s
of the Capital
ai
Stock ofd branch, specifying the
time and place thereof; such book shall be kept open
for two successive days, between the hours of ten A. m.
and two P. M. of each day, under the control and direction of such association, and shall be accessible to every
person desiring to subscribe to stock of fhe proposed
branch.
On the first day no person, company or 1111SiBabscrii
01
stcck regulak,J. ness firm, composed of one or
more individuals shall be
permitted to subscribe to more than ten shares, and on
the second day to no more than fifty shares, unless at
the time for closing the book on that day the aggregate amount of stock subscribed shall not exceed the
amount of capital authorized in section twenty-one.


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Federal Reserve Bank of St. Louis

LAWS OF L.INV

149
SEC. 45. The number of branches of the State Bank
I.r3noh,s.
of Iowa shall not exceed thirty. The Board of
Directors of the State Bank of Iowa may increase the
capital
stock of any branch whose capital does not equal
three
hundred thousand dollars, by authorizing such branch
s4"'„'°,' each
to receive at any time such additional subscription to
its
capital stock as will increase the same to any amount
less than three hundred thousand dollars, if said
board
ot directors shall be satisfied that such additional
amount ot capital is demanded by the public interest
,
and can be safely and profitably employed; but the aggregate capital of all the branches shall not exceed six treg'' capi.
millions of dollars. No branch shall be established in
any town with a less population than five hundred, nor
shall two branches be established in the same town or
city.
SEC. 50. The branches shall continue to exist so T
he branches
long as necessary for the settlement of their affairs, not- citettl nu e to
d
withstanding the repeal of this act; and no law shall
ever be passed diverting or appropriating the assets of
any such branch to any person other than to the payment of its debts and liabilities, and the distribution of Appruop.riation of
the residue among its stockholders, in proportion to the
stock by them severally owned.
SEC. 51. To cary into effect the provisions of this
act, C. IL Booth, of Dubuque county, E. H. Harrison,'
BaitrsC
.
of Lee county, Ezekiel Clark, Johnson county, J. W.
Duton, of Muscatine county, Wm. J. Gatling, of Polk
county, C. W. Slagle, of Jefferson county, Elishu Baker, of Linn county, William S. Dart, of Mahaska
coLnty, L. W. Babbitt, of Pottawattamie county, and
Edward T. Edgington, of Lucas Co., shall be and they i i
are hereby appointed commissioners, and they, or a ma- Qual ficat on.
jority of them,after taking an oath diligently, faithfully
and impartially to perform the duties assigned them by
this act, a certificate ot which oath shall be filed and
carefully preserved in the office of the Secretary of State,
shall constitute a board, to be designated the Board ot'
Bank Commissioners, which board shall continue until v""'""".
the organization of the State Bank of Iowa, as herein
!


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Federal Reserve Bank of St. Louis

_
LAWS OF IOWA.

150

provided for, and thereafter the duties which they are
required to perform by this act shall be performed by
the said bank ; and if any of said commissioners
refuse to serve, shall die or resign, his place shall be
filled by appointment by the Governor. Hoyt SherBank DirectorF. man, ot Polk county, Benjamin Lake,of Clinton county,
and Elias II. Williams, of Clayton county, are hereby
appointed directors of .the State Bank of Iowa, on the
State, who shall have the same powers as the
Comp(naion. part of the
the part of the bank, and who shall be paid
on
directors
and shall receive three dollars per day for
State,
by the
the time actually engaged in their duties, and mileage
1 °""' the same as members of the General Assembly. The
"
"
7
term of service of said directors shall be for two years
and _until their successors are elected anti qualified. It
;successor. Elec. shall be the duty of the General Assembly to elect three
ted.
directors of the State Bank of Iowa at each regular
biennial session. No person shall be eligible to the
office of State director who holds any office or appointment under any of the branches or owns any stock in
the same, and the acceptance of any office of trust or
profit from any branch, or the acceptance of any stock
in any branch by a State Director during his term of
service shall be deemed a resignation, and the Governor
shall fill by appointment the vacancy..
Said commissioners shall meet at Iowa City, at such
leers meet.
time, within thirty days atter the adoption of this act,
as shall be appointed by the Governor, who shall notify
each member of his appointment, and of the time andMore Preet. place of meeting. They shall, when met, appoint one
of their number to be their President, who shall, under
the order of the board, sign all official documents; and
they shall cause a fair and true record of all their offif
minutre
„
ceedInge.
cial proceedings to be kept in a book to be provided for
that purpose, which shall be delivered by the president
of said board to the State Bank of Iowa, as soon as the
same shall be organized.
Ste. 52. The board of Bank Commissioners shall
Com`re examine
e ca o f
brayche
examine their certificates of the formation of branches
transmitted to them, as required by this act, and shall,
pis,


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Federal Reserve Bank of St. Louis

,
LAWS OF IOWA.

151

by one of their own munier, or other specia
l agent ap- Appoint agent to
examine condipointed by them for that purpose, who shall
not be a st looncuotpabirric.
h:
stockholder in any of the branches forme
d under this c"ra
"1
manacer,et"
,, Utile
act, immediately proceed to examine the
condith n of:
1 171,1';,,e°aVal-rd
each of the branches which shall have transm
itted to of
k"wledg
statemenement
t.
Said hoard the required certificate ; and it
shall be the
special duty of such agent to carefully count
and otherwise ascertain the amount of money paid in on
account
of its capital stock ; to ascertain the name and place
of
residence of each of the directors of such branc
h, and
whether their stockholders, directors and
officers are
men of responsibility and integrity, and entitl
ed A) the RteoPr°..rt Decpublic confidence. and the amount of capita
l stock of
which each is the bona fide owner ; whether such
branch
has complied with all the requirements of this .act
, necessaay to entitle the branch to engage in the busine
ss
of banking; and shall cause to be made, and attest
ed
by the oath of a majority of the directors, and
by the
cashier of snch branch, a statement of all the materi
al
facts necessary to enable the board of Bank Commi
ssioners to determine whether such branch is lawful
ly
,entitled to commence the business of banking under
the
provisions of this act ; and such agent shall immed
iately report to the board of Bank Commission
ers such
statement, and his proceedings in the premises.
SEC. 53: It, upon a careful examination of the certificates of association, and the reports awl statements
oi c
the special agents appointed to ascertain whether the orn'rs report to
Governor.
branches so organized have complied with the provis
ions of this act, it shall appear that five or more
such
branches have been formed, and that their stockh
olders, directors and officers are men of responsibility
and
integrity, and entitled to public confidence; and
that
such branches are lawfully entitled to'comm
ence the
business of banking, the commissioners shall certif
y
the same to the Governor, and shall immediately notify
each of said branches thereof; and within ten days
after Branches choose
receiving such notice,each branch shall appoint, in
officers.
such
manner as the directors thereof shall prescribe, one person to be a director of the State Bank of Iowa.


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Federal Reserve Bank of St. Louis

1.52

LAWS OF IOWA.

SEC 54. The Governor, if he be satisfied that the
"irlian,Lt."law has in all respects been complied with, shall issue
his proclamation, setting forth that such branches are
authorized to commence and carry on banking, at the
places severally designated in their certificates of assuRecord evidence .
of .rganlaation. elation; which proclamation shall be recorded in the
office of the Governor, and a copy of said record certified under the great seal of the State of Iowa, shall he
prima facie evidence of the organization of such bank.
SEC. 55. The bank commissioners, and all agents
Compensation of appointed by them, shall each be entitled to receive for
Com`rs and Agents.
their services under this act, five dollars per day for
every day necessarily employed in the discharge of their
duties, and the same mileage as is received by the members of the General Assembly, to be paid by the State
Bank of Iowa.
Sc. 56. This act shall take effect and be in force
from
and after its approval by a majority of all the electale effect.
tors of this State voting for and against it, at an election provided by law, and not otherwise.
Approved March 20th, 1S5S.

CHAPTER SS.
CIIARTEE OF DAVENPORT.
AN ACT to amen,1 an Act entitled an Act to Incorporate the City of Davenport, and
to amend the several Acts amendatory thereto.

SECTION 1. Be it enacted by the General A.88end)ly of
the State qf Iowa, That so much of said Act and the sevPortion of 0 ld eral amendments thereto, as provides for a City Council
Charter repealconsisting of a Mayor and Aldermen, requiring that the
Board of Aldermen shall consist of two Aldermen from
each Ward, is hereby repealed, and the terms of said
several Aldermen are hereby terminated. The said City
IcIpal
eta. Council shall hereafter consist of a Mayor, a Board of
cers.
Councilmen, and a Board of Aldermen. The Board of
Aldermen to consist of twelve (12)members, chosen from


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Federal Reserve Bank of St. Louis

STATUTORY PROVISIONS IOWA GUARANTY PLAN OF BANK
OBLIGATIONS
(All references to Act of March 20, 1858)
A

Bank Obligations covered
Period:

1858-66

Obligations covered: Circulating notes (Sec. 7)
B

Assessments and Contributions in Bank Obligation Insurance Plan
Initial contribution: 12 1/2 percent of amount of circulating notes, in
money, United States stocks or interest-paying State
stocks at their current value in New York city
(not above par value). (Sec. 7)
Annual assessment:
Special assessment:

C

Proportionate share, based on authorized circulation,
a/
of sum necessary to redeem the notes of a failing branch.
(Sec. 12)

Statutory Limitations on Operatinns of Insured Banks
I

Reponsibility of Directors and Stockholders

Directors:
Stockholders:

Double liability. (Sec. 42)

II Limitations on Loans and Investments
To officers and employees:
To directors:

(Sec 26
Collectively one-fifth of stock paid-in and owned by directors.

To stockholders:

Collectively three-fifths of capital stock paid-in and
remaining. (Sec. 26)

Maximum to single borrowers:
Maximum length of loans:

One-twentieth of authorized circulation.— (Sec 38)

No loan or any note, bill of exchange or other
evidence of debt having more than four months to
run before maturity. (Sec. 28)

a/ Branches were to be remunerated for such contribution from the safety fund
as soon as money could be obtained by the sale or hypothecation of the stocks
or other securities therein. (Sec. 12)
b/ Inclusive of liabilities as acceptor on bills of exchange, one-fourth of
authorized circulation. (Sec. 38)


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Federal Reserve Bank of St. Louis

C


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Federal Reserve Bank of St. Louis

Statutory Limitations on Operations of Insured Banks
III Limitations on Ownership of Property
Banking house
and fixtures:

Such as may be necessary to convenient transaction of
its business. (Sec. 28)

Time limit on '
real estate acquired
by collection of debt:

No longer than necessary in Oudgment of directors
to avoid loss. Met be offered for sale at least
once each year. (Sec. 28)

Ownership of
other real estate:

Forbidden. (Sec. 28)

Ownership of
corporate stock:

Forbidden, except to prevent loss on debt
previously contracted. (Sec. 23)

IV Limitations on Circulation, Deposits and Borrowings
Maximum circulation:

Specified ratios to capital stock: first $100,000, twice;
second $100,000, 1 3/4; third $100,000, 1 1/2. (Sec. 9)

Maximum deposits:
Rate of interest
on deposits:

Interest on current deposits prohibited. (Sec. 32)

Maximum borrowings:

Two-thirds of capital stock actually paid-in. (Sec. 33)

V

Required Reserves

Total amount:

Proportion of
reserve required
to be actual cash:

Twenty-five percent of outstanding notes of
circulation. (Sec. 31)

All in gold and silver coin in vault. (Sec. 31)

Character of balance:
VI Limitations on Payment of Dividends
Percentage of earnings to be carried
to surplus prior to dividends:
If losses exceed undivided profits
Forbidden. (Sec. 34)
or in excess of net profits:
If reserve is impaired:
If capital is impaired:

Not to be paid if reserve falls below 2% of
circulation. (Sec. 31)

3

D

Character and Powers of Supervisory Authorities Over Insured Banks
I Character of Supervisory Agency
Name of board:

Directors of the State Bank of Iowa. (Sec. 5)

Composition and
method of appointment:

One director appointed by each branch; three by
general assembly. (Sec. 51 and 53)

II Opening of New Banks
Authority approving
opening of new banks:

a/
Board of directors of State Bank of Iowa. (Sec. 12)

Conditions to be taken into consideration
in approval of charters or issue of
certificates to begin business:
III Examinations and Reports
Number of required examinations each year:
Additional examinations
by supervisor:
Whenever and as often as they think proper. (Sec. 3)
Minimum number of condition
reports each year: Monthly. (Sec. 3)
IV

Character of Assets and Management

Circulation and
liabilities:
May require any branch to reduce its circulation or other
liabilities within limits deemed necessary to secure from loss
either dealers with such branch, or other branches. (Sec. 3)
Other powers:

May give orders to any branch to do anything which may be deemed
necessary for the security of said branch, or any other branch.
(Sec. 3)
V Closing and Liquidation of Banks
Power to close for
violation of law: If any order of the State bank not complied with, may apply
to court for injunction to close branch. (Sec. 16)
Power to close for
(Sec. 11)
unsatisfactory condition: If branch fails to pay notes in gold or silver c!olr.
Definition of
insolvency: If payment_of notes
used 8L
)
gold or silver coin (silver
withih lawful limits.
refUlec. 10
PoVers of
liquidation: Upon act of insolvency or granting of injunction title to all
property-,etc. of branch is vestqd in Bd. of directors of State
Bank, which appoints receiver. (Sec. 11)

a/ Approval of original branches, not less than fire in number, by a Board of
Commissioners. (Sec. 2).

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Federal Reserve Bank of St. Louis


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Federal Reserve Bank of St. Louis

S

December 17, 1954

MEMORANDUM
TO:
Files
FROM:

Mr. Golembe

SUBJECT:

Abstracts from Records of the Commissioners and
Record of the Board of Directors, State Bank of Iowa;
manuscript volume, State Historical Society of Iowa.

Meetings beginning July 28, 1858.

•

Relates to organization of board of Bank Commissioners
and receipt of applications for Branch Banks. The function
of the Commissioners was to organize the State Bank system by
investigating charter applications and accepting or rejecting
individual applications as the information secured warranted.
After organization of the system applications for admission,
as well as other administrative duties, became the responsibility
of the Board of Directors and the board of Bank Commissioners
ceased to function.
Meetings beginning September 15, 1858.
Various applications for charters were accepted by the
Commissioners and agents were appointed to examine same and
report on the advisability of permitting formation of the banks
concerned.
Meetings beginning October

received.

6, 1858.

A number of reports on charter applications were
The following was typical:
The Board came to order and the President
announced as the first business in order, to be the
reports of the agents sent to examine the organizations
for Branches. Under the rule previously established
the papers and application of Thadeus P. Sears and
others for a Branch at Comanche Iowa were received,
also the application and accompanying papers of Louden
Mullen and others for a Branch at Pacific City Iowa,
also the certificate of Langowrthy and others from
"The City of Dubuque Branch of the State Bank of Iowa"
all of which on motion were laid over until Thursday
the 7th Inst afternoon Session -

•

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Federal Reserve Bank of St. Louis

•

-2The report of C. W. Slagle and C. H. Booth was
then read and accepted: which report is in the words
following
-The undersigned who were appointed agents to
examine the condition of the "Branch of the State
Bank of Iowa at Muscatine respectfully report That
they made said examination on the fifth day of October
1858. They found in the hands of the officers of
said Bank the sum of Twenty five Thousand Dollars
Minutes of Oct. 6 continued
in American Gold. They ascertained that the Stockholders directors, and officers of said organization
are men of responsibility and integrity and entitled
to the public confidence your agents append and make
as part of this report Sworn Statements of the Directors
and Cashier of said organization furnished your
agents by said officers as required by law" Sept 6th 1858.
C. H. Booth
C. W. Slagle

•

The Governor was advised of the applications accepted
and the Branch Banks were notified (October 9, 1858):

•

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Federal Reserve Bank of St. Louis

The undersigned a majority of the board of Bank
Commissioners appointed to carry into effect the
provisions of an act of the General Assembly of the
Iowa entitled an "act to incorporate the State
State4
A
Bank of Iowa? in accordance with section fifty three
of said act, do after a careful examination of the
certificate of association and the reports and statements
of the special agents appointed by this board to ascertain
whether the branches which transmitted to this board the
required certificate had complied with the provisions of
the act refered to: hereby certify that the following
branches viz The "Muscatine Branch of the State Bank of
Iowa" at Muscatine, The Branch of the State Bank of Iowa"
at Iowa City
The "Branch of the State Bank of Iowa" at Desmoines"
The "Dubuque Branch of the State Bank of Iowa at Dubuque"
The "Oskaloosa Branch of the State Bank of Iowa" at Oskaloosa
The "Mount Pleasant Branch of the State Bank of Iowa at
Mount Pleasant
The "Keokuk Branch of the State Bank of Iowa" at Keokuk Lee
Co. Iowa, and the "State Bank of Iowa Merchants Branch at
Davenport? have been formed and duly organized according to
the provisions of said act that their stockholders, direct-

•

-3ors and officers respectively are men of responsibility
and integrity entitled to public confidence and such
branches are lawfully entitled to commence the business
of banking under said act.

L-207

Ezekiel Clark President
C. H. Booth
E. H. Harrison
J. W. Dutton
W. J. Gatling
Elihu Baker
Wm. S. Dart
Edw T. Edginton

Minutes of the 9th continued
The following notice was ordered to be forwarded to the
branches included in the certificate forwarded the
Governor.
"You are hereby notified that the Board of Commissioners for organizing the State Bank of Iowa have
certified to the Governor that youf`Bank has complied
with the provisions of the law and is entitled to commence
the business of Banking, and you are further notified
that we have appointed the 27th day of October A D 1858, for
the meeting of the board of Directors of said State Bank
of which directors your Branch is to elect one who shall
attend said meeting

•

This is the end of the Records of the Commissioners Meetings
beginning October 27, 1858
This was the first meeting of the Board of Directors of the
State Bnnk of Iowa and marks the beginning of Record of—tbr—tuard of
the Board of Directors.


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Federal Reserve Bank of St. Louis

By-laws were adopted on October 29, 1858, as follows:
By Laws of the State Bank of Iowa
The Board of Directors shall have a Seal on which shall
be engraved "The State Bank of Iowa", to be kept by the
President and used by him and under his direction when
necessary.
The officers shall consist of a President, Vice President
and Secretary.
The first election of those officers shall be made at
present
session of the board of Directors, and the
the

•
next regular election of said officers shall be held at
the first meeting of the board of Directors in the month
of February A D 1860, and annually thereafter at the
regular meeting in the month of February.
It shall be the duty of the President to take the charge
and general oversight of the office at Iowa City. He
shall in person or by an agent make a thorough examination of the affairs of each of the branches as often as
he may deem necessary, or whArer he may be desired to do so
by any

L7

•

three of the board of Directors. He shall also on the
first day of each regular session of the board of Directors
communicate to said board in writing all such matters in
relation to the administration of the State Bank of Iowa,
and of the several branches thereof, as in his opinion
may be necessary, and also to recommend such measures for
the action of the Board of Directors as he may deem useful
and proper. He shall also give Bond and security to be
approved by the board of Directors with a penalty of One
Hundred Thousand Dollars, conditioned, for the honest and
faithful discharge of his official duties.
It shall be the duty of the Vice President in case of the
absence, death, sickeness removal or incapacity of the
President to act, to take his place and discharge the
duties pertaining to his office, and during such time
he shall receive the same compensation as would be allowed
the President if he were himself discharging the duties of
the office which shall be deducted from the Presidents
salary and he shall give bond in the sum of $25,000 to be
approved by the Directors, for the faithful discharge of
his duties.

Lithe following paragraph is inserted on a slii7
Add to art. 14
And it shall be the duty of the Vice President in person
or by agent to make a thorough examination of the Branch
represented by the President as Director, as often as
he may deem necessary or whenever he is directed to do so
by three Directors.

•

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Federal Reserve Bank of St. Louis

It shall be the duty of the Secretary to keep the Books
and accounts of the office at Iowa City, subject to the
direction only of the President and the board of Directors, and he shall give bond in the sum of $100,000 for
the faithful performance of his duties, said Bond to be
approved by the board of Directors, and the secretary is
hereby appointed to Register and countersign the notes
issued for circulation and to keep the record of the same

•
as required by law.
[The following paragraph is inserted on a s147
Art 5 Amended Feby 17th 1860 Page 133
Read $50,000 instead of $100,000
All officers of the board of Directors shall be elected
by ballot, and a majority of all the votes cast shall
be necessary to constitute a choice, and every vote or
ballot so cast shall have written upon it the name of the person
voting and also the number of votes to which he is
entitled.

[27
By Laws Continued

•

No resolution to remove any officer by the board of
Directors shall be entertained until all the members of
the board have had notice of the intention to move such
resolution, and until the officer to be removed has had
reasonable notice of such intention.
In case of vacancy in any of the officers of the Bank
(except the President) by death sickness resignation or
otherwise said vacancy shall be filled by the President
until the next meeting of the board GA

In case of a vevacy in the office of President the Vice
President shalftake his place as provided in section 4
of these by Laws and shall continue until the disability
of the President is removed and he shall resume the
duties of his office, or until said vacancy is filled by
the board of Directors.
All the officers Bonds (except that of the President)
shall be deposited with the President, and the Bond of the
President shall be deposited with the Vice Prest
[The following paragraph is inserted on a sli27
Art 10
Minutes May 1862
Page 215

•

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Federal Reserve Bank of St. Louis

Amended - Read Vice President instead
of Secretary of State

•
The regular meeting of the board of Directors shall be on
the first Wednesdays after the second Mondays of February
May August and November but the President or any four
members of the board may call a special meeting.
In all calls for special meetings a notice in writing shall
be given by the President, secretary or other persons
having authority to call special meetings to each member
The salary of the President shall be $1,200 per annum and
all necessary expenses in visiting and examining the
branches, and the salary of the Secretary $1500 per annum
which shall be audited and paid quarterly -

L27
By Laws continued

•

There shall be an executive Committee of three (of whom
the Vice President shall be one) who shall meet at the
office in Iowa City on the first Wednesday after the second
Monday in each month except the months of February May
August and November. It shall be their duty at their
regular meetings in each month carefully to examine the
monthly statements made by the several Branches and if
upon such examination they deem it necessary so to do,
to cause a personal examination to be made by the President or Vice President of the condition of any branch. To
call a special meeting of the board of Directors, To examine
at each meeting the accounts of the secretary with the
several branches. The amount of bills in blank in his
possession and generally the condition of the affairs of
the State Bank of Iowa as shown by the Books and property
in its office in Iowa City, and to perform such other
duties as the By Laws may from time to time impose upon
them.

That there shall be appointed by the President the following standing committees to consist of three members
each unless otherwise specially provided
A Committee on Accounts who shall audit all claims presented to the board and also shall report the proper
assessment on the branches.

•

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Federal Reserve Bank of St. Louis

A Committee on new applications for Branch Banks who shall
examine into the regularity of the applications and shall
report thereon with such other matters as they may think
appropriate.

•

These By Laws may be altered, Emended or abolished by a
two-thirds vote at any regular meeting.
ffhe following paragraph is inserted on a sli27
Hereafter no Branch shall be admitted without the consent
of three fourths of the members present.
A resolution apparently dealing with the Safety Fund was
adopted:
Mr Price offered the following resolution which was adopted
Resolved That the Directors of the State Bank of Iowa request that several Branches to make their own investments
and deposite the stock, but if said Branches refuse or
neglect to make such investments and the same shall be made
by the State Bank that then and in that case the profit or
loss on such stocks shall accrue to, or be borne by the
Branch.
Meetings beginning December 18, 1858
Resolved That in reference to Section 11 of the Act of
the Legislature, your committee submit the following as
an amendment to the By Laws To Wit The President shall immediately on receiving information notify the executive committee and it shall be their
duty to appoint a committee at once to examine into the
truth of such information and they shall also call a
meeting of the Directors to hear the report of the Committee appointed by them -

•

Laid upon the Table
Resolved that it is the duty of the president under section
16 of the act of the Legislature to order any Branch to reduce its Circulation, or do any other matter contained in
fr —
said L45/ section when in his opinion the interests of the
State Bank require it, and in case of refusal - To proceed
in his discretion as directed in said Section 16
Laid upon the Table
MeetingsNl?,e
,,
!i!:ing February 16, 1859
Thuriday P M 2 Oclock February 17 - 1859
The board.

•

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Federal Reserve Bank of St. Louis

The Committee on the Presidents reports
Reported which was adopted in the following form
The Committee to whom was referred the suggestions
and recommendations of the President have had the same
under consideration and report

•

-8Meetings-bagi,nning February

16, 1859

Thursday P M 2 Oclock February 17 - 1859
The board.
The Committee on the Presidents reports
Reported which was adopted in the following form
The Committee to whom was referred the suggestions
and recommendations of the President have had the same
under consideration and report
That they recommend the approval by this board of
the action of the President in respect to the purchase of
Missisouri Bonds for the Safety Fund for the Dubuque
Branch, and also in borrowing and expending the Eight
hundred eight six 55 dollars as reported by him, the
100
same being in accordance with a previous resolution of
this board.
Your committee further report that in their
opinion the Law does not require the proclamation of the
Governor to authourize the commencement of business by
any newly organized Branch, and that such Branch is
authourized to commencefbusiness as soon as its organization is complete and accepted by this board as a Branch
of the State Bank of Iowa.
Meetings beginning March 17, 1859
Primarily dealt with applications for Branch Bank charters.
Meetings beginning_May 11, 1859
That (ii) the declaration of Dividends as provided for in
Section 35 - The Branches be requested to report their condition as providedf for in said Section and the rate and
amount of dividend proposed which shall not be payable until
after approval by this Board Which resolution was Adopted
Resolved that no necessity exists at this time for the
fixing a per centage for a contingent fund, but such a
course may be necessary before a deelaration of dividends
by branches.

•

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Federal Reserve Bank of St. Louis

•

-9Resolved that the Branches of the State Bank be requested
not to pay out any Minnesota bank paper until such bank
paper has been placed on a good footing in Chicago or
other currency Which resolution was Rejected C7S3
May 11th 1859 Continued
Session
Wednesday evening
Mr Rand offered the following resolution as a substitute
for the last preceding resolution numbered 7
Resolved that this Board has no confidence in the issues of
the Banks of Minnesota and recommend to the Branches of this
Bank not to receive it in deposit or countenance its circulation Rciepref.,
A portion of the president's report read as follows:
Of the Safety Fund paid in Coin and Drafts I have invested as follows -

•

Bought for account of the Washington Branch $3,000
United States 5 per cents at a cost of $1011/2 and for Lyons
City Branch $1000 Tennessee 6 per cents at 93 3/8 leaving
$1,400
to be invested for Keokuk Branch
60
Mount Pleasant Branch
277
Dubuque Branch

$1,737
Nearly all the securities held by this Bank as safety
fund have advanced in price since purchased by the Branches.
I would advice that you authorize the old Branches who
have paid up instalments beyond the 50 per cent on their
stock subscribed the same amount of circulation on said instalments as they were entitled to on their original paid
up capital and the new Branches a further amount of 50 per
cent on their paid up Capital - They of course providing
the requisite amount o.• Safety Fund. This would give all the
Branches One and one half the amount of their paid up
Capital which I think is as much as they will require
until next meeting of the Board.
The Reeolution of the Board at last session with
regard to notifying the Governor of our State of the formation of new Branches has been complied with by sending
him an attested copy of our proceedings.

•

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Federal Reserve Bank of St. Louis

He acknowledged receipt of the papers but declines
to issue his Proclamation - he says not deeming it necessary
under the law.

-10-

Wednesday evening Session Continued May 11th 1859
I would recommend that the Board agree upon some formof
proceeding of the Branches desiring to made Dividends.
The Law is not very explicit on the subject but says the
Branches shall make dividends 1st Mondays of May and
November to be approved by the State Bank. What will be
the proper proceeding? Will the Branches send up statements
of their affairs and this Board say how much they shall
divide, or will they go forward and made Dividends payable
at some future time and subject to be approved by this
Board - The latter course seems to me most convenient and
consistent with the requirements of the law.
I would also suggest that you require the Branches
before making any dividends to set aside a certain amount, say one
per cent semi annually of their profits until the amount
reaches say ten per cent of their capital as a contingent
or sinking fund to meet any unexpected losses or expenses.
It may be preferable instead of making this sum a
specific amount semi annually to Make it so much per cent
on the amount of profits, or on the Dividends declared.
It seems to me, a just regard for our safety requires
that ye make some provision of the kind and it is well to
start in time before any of the Branches shall be prepared
to make Dividends.
It appears that the Brokers and private Bankers of our
State who are not interested in any of the Branches are
making some combined efforts as might be expected to return
the circulation of our Branches.
There seems to be a difference of opinion among the
different Cashiers as to which is the best policy to meet
this either to pay in coin only, or to agree on some rate
at which we will furnish Exchange which of course will
have to be at about cost rates for expressing Gold - I think
some uniform policy, or course of action by the Branches
is desirable - It will be necessary to have rates of Exchange vary for the different localities
/787
Wednesday evening Session May 11th 1859 Continued
I would suggest the propriety of asking the Branches, in
•


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Federal Reserve Bank of St. Louis

0

•

-11making their monthly statements in February - May - August
and November to give a list of their Stockholders and
Directors on the last day of the preceding month - It would
only be a copy of the notice posted in the Bank and would
not be much trouble to make and I think would furnish some
Information the Board might often desire to have.
I would also call your attention to the fact that strong
efforts have been made by parties inside and outside of
our state to introduce into circulation here the issues of
the new Minnesota Banks and some of the Branches have
sanctioned the move by receiving and paying it out as
currency
This money may be tolerably well secured at present
and some of the Banks as good as many of those in Wisconsin
and Illinois which we are compelled to use and perhaps
shall be for some time to come.
The Minnesota law as I understand it is defective and
their securities can at any time be changed and that is
probably the intention of the founders of the Banks.
If we undertake to use only such as we think are good
the people will not know how to discriminate between them
and those which are unsafe and will give it circulation.
I think it decidedly bad policy for this Bank to encourage the use of this kind of currency in any form
and would recommend that you adopt some resolution requesting all the Branches to decline paying it out.
The short time that the Branches have been in operation
and the very favourable monthly statements made by them
have satisfied me that it is hardly necessary as yet to
put this Bank to the expense of visiting and examining the
Branches and I have not as yet made any such visits or
examinations - shall expect to attend to this duty in part
Wednesday evening Session continued May 11th 1859
before the next regular meeting of the Board
Chester Weed
President

•

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Federal Reserve Bank of St. Louis

Resolved That in the opinion of this board it is the
policy of the several branches of the State Bank of Iowa
to hold and protect each others circulating notes, to as

-12great an extent as possible, in lieu of holding the circulating
notes of Foreign Banks and that the cashiers of the
several branches be requested to do so
Which resolution was adopted
Meetings beginning August 10, 1859
"To The President of the State Bank of Iowa
The undersigned would respectfully represent That he
on the 8th & 9th insts did visit and make a brief examination of the books - records - accounts &c of the Muscatine
Branch of the State Bank of Iowa and applying his
interpretation of the law to same as he found them, he
found some departures of a minor character and not of
sufficient importance as he thinks to bring before the
State Board. The most prominent of which is the allowing
of accounts to be overdrawn beyond what is ordinarily done
under similar circumstances by Banks of this character
Yours Respectfully
Wm T Smith Vice Prest ,
Ordered to be placed on file.
The Committee to whom was referred the application of the
Farmers Branch at McGregor Reported as follows "Your Committee to whom was referred the Application of
the Farmers Branch of the State Bank of Iowa at McGregor
Report that they proceeded

Wednesday evening Session Continued
to McGregor on the ah inst and examined the organization
There is connected with the organization One hundred
and one Stockholders, a Majority of whom are residents of
Clayton County.
The usual interogations with the answers of the
Directors are submitted with this report.
We found by actual count the required amount of Coin
$25.000 on hand -

411

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Federal Reserve Bank of St. Louis

A large country trade centers at that point and we believe
a good position to be occupied by a Branch - From all the

-13-

•

information we were able to obtain, we believe the
Directors and Stockholders ( a list of which accompanies
the report) to be men of responsibility and integrity and
worthy of public confidence.
All of which is submitted
This report was afterwards
S Rand
withdrawn and another made
Committee„
Wm F Coolbaugh
On Motion adjouned to meet at

8

Oclock tomorrow morning

Elihu Baker
Secty
On Motion leave was granted to the Committee in the case
of the Application of the Farmers Branch of the State Bank
of Iowa to withdraw the report made by the committee yesterday
The Committee subsequently made an amended report as follows
Your Committee to whom was referred the application
of the Farmers Branch of the State Bank of Iowa at McGregor
Report that they proceeded on the 6th inst to examine the
condition of the organization.

•


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Federal Reserve Bank of St. Louis

There is connected with the organization 0."e hundred
and one Stockholders, a majority of whom are residents of
Clayton County.
The usual interogations with the answers of the
Directors are submitted with this report.
We found by actual count the required amount of Coin
Twenty five thousand dollars on hand.
A large country trade centers at that point and we
believe a good position to be occupied by a Branch.
From all the information we were able to obtain we
believe the Directors and Stockholders ( a list of which
accompanies this report) to be men of responsibility and
integrity and worthy of public confidence.
While bearing this testimony however, to the character
and responsibility of the parties connected with the organization, we feel compelled in justice, to what we deem
the true interests of the Branches now organized, and to be
organized under the Law creating the State Bank, to call
the attention of the board of control to the large proportion
of Stock held by persons not residing adjacent to the
location at which the Branch is proposed to be established,
and at

Lgr/

-14-

•

Thursday Morning Session continued Aug. 11th 1859
points remote from those presumed to be benefitted by its
establishment.
Some $12.000 of the Stock stands in the names of persons
residing at Dubquque where a branch is already in operation,
and some 6 or $7.000 appears to be owned in New Hampshire.
So large a proportion of the $50.000 Stock subscribed in
the hands of non-residents seems in the minds of your committee
to be a serious objection to the organization as it now
stands, and leaves room, in their opinion, to fear that
the control of the institution may, by a concert of action
amongst a portion of the stockholders, eventually, and
perhaps at no remote period, be obtained by those having
but little, if any interest in common with the people in
the immediate region of country for whose benefit such an
institution should always be managed - a result which the
committee are sure would be greatly regretted by the board
of control.

•

For these reasons your committee while favourably
impressed with the advantages possessed by the point named
for the legitimate support of a Branch of the State Bank,
feel constrained, to advise the non acceptance for the present of the
application All of which is respectfully submitted
S Rand
Committee
W F Coolbaugh
The question being on the adoption of the above report the
Yeas and Nays were called - Those voting in the affirmative
were Messrs Allen - Bonson - Clark - Coolbaugh - Harrison
Lake - Price - Rand - Stone - Whiting - Vice President and
the Preisdent - twelve votes - ALL the members present
voting in the affirmative
The resolution was declared adopted.
The Committee of the whole reported the following resolutions /

•

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Federal Reserve Bank of St. Louis

"That in the opinion of this board, the language of Section 23
in the Bank act, in reference to personal security was
intended to restrict the taking of real Estate security only
(at the time of making loans) and that the Branches can use
their own discretion in reference to taking collaterals"
The Yeas and Nays were called on this resolution Those
voting yea were Messrs Allen Bonson - Coolbaugh - Harrison

-15Lake - Mobley - Price - Rand Whiting - and the Vice
President 10 Votes
Those in the negative were Messrs Stone and the President
2 Votes
Mr. Clark at his request being excused from voting
The resolution was declared adopted.
"Resolved That in the opinion of this board it would be
illegal and usurious to exact in coin the payment of
debts due any Branch at its counter, But it is neither
illegal nor usurious to receive coin in payments as
aforesaid provided the same is not exacted but voluntarily
made
Which resolution was adopted
'Resolved that in the opinion of this board it is not
advisable for any of the Branches of this Bank to keep
their New York or Boston accounts with private Bankers
and while this board would not be considered as doubting
the integrity and entire responsiblity of many of the
private Bankers in said Cities, it nevertheless concieves
that a due regard to their best interests requires that
the business of the Branches in those Cities should be so far as practicable - transacted with regular Banks Adopted
597
Thursday evening Session continued August 11 -

1859

"Resolved that the Executive committee be authorized to
pass oroMit any of their monthly meetings and may meet
the day before the regular meeting of the board of
Directors
adopted unanimously Meetings beginning November

16, 1859

"To the President and Directors of th/ttate Bank
The undersigned committee on Presidents communications have had the quarterly communication of the President submitted at this session - under consideration, and submit
as their Report, the following resolutions on the several
Novr 17 - 1859
topics presented and recommend their passage

•

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Federal Reserve Bank of St. Louis

H Price - Chairman of
1st Resolved That in the monthly Statements required by
Section 35 of the Charter - the Branches must include

Corn

-16-

•

under the head of Suspended paper the whole Amount of
over due paper discounted or purchased by them. And
this amount to be divided into the three classes specified in subdivision 12 of that section - namely good doubtful - and amount in suit or judgement.
Resolved That the recommendation of the President on
the subject of requiring each Branch to report all items
of overdrafts to this Board be not concurred in - the
same being in the opinion of this Board unnecessary - It
is however recommended to all the Branches to prohibit as
far as possible the practice of allowing any over drafts
whatever Resolved that the provisions of a Resolution passed by
this Board on the 11th May 1859 in reference to postponing
the payment of instalments to the Branches at the time
they sevefally fall due by by provisions of the act to
incorporate the State Bank of Iowa - shall extend and be
applicable to all Branches which may wish to avail themselves of the same for a further period of six months
from the expiration of the time named in said Resolution
of 11th May L1027
Thursday Morning Session November 17th 1859
lith Resolved That the Fort Madison Branch be authorized to
recievelfrom the State Bank the remainder of the Notes for
Circulation to which it is entitled according to the
Charter, or depositing the necessary safety fund.
5th Resolved, That the President be authorized to order
from the Engravers additional Notes for Circulation to the
amount of Two hundred thounsand dollars ($200,000) as
soon as the same shall in his opinion be demanded for the
use of this Bank, and that it is inexpedient to procure
new Plates at present
6th Resolved That the several Branches be requested to discriminate in their monthly Abstracts the amount of circulating Notes of each Branch held by them.

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Federal Reserve Bank of St. Louis

7th Resolved That the Branches be instructed to declare no
dividends hereafter without first setting apart a contingent
fund of one per cent on their paid up Capital, until otherrise ordered by the State Board, such contingent fund to
remain a permanent fund, subject to be diminithed only by
actual losses charged to said fund „

-17-

•

The foregoing Report and Acompanying Resolutions Numbered
one to seven inclusive, having been first read, each of
them were taken up and considered separately, and on
motion in each case were separately adopted.
Thursday Morning Session November 17th 1859
The Monthly Statements made severally by the Branches on
the last Dividend day (the 7th instant) were taken up and
separately examined and considered. When it appeared that
the paper owned by them reported as suspended was merely
past due and believed to be good - That it was not of the
kind or character contemplated in section 34 of the Act
to incorporate the State Bank of Iowa - It being neither
bad nor past due six months.
Wherefore on motion in each case the several dividends
proposed to be made by the following named Branches were
each separately approved - to wit
The Branch at Burlington 5 per cent on $75,000 say $3,750
5
1,250
25,000 "
" Washington Branch
2,428.80
30,360
Branch
Davegport
Merchants
2,040
6
34,000
Muscatine Branch
7
Moines
1,750
25,000
Branch at Des
2,800
000
Keokuk Branch
5
30,000
1,800
6
Dubuque Branch
Branch at Iowa City say 5 pr ct
26,300
1,292.91
from time paid in
1,000
25,000
Mount Pleasant Branch say 4
It

IT

TI

The following named Branches do not propose to declare
any Dividend at present - preferring to retain their profits Viz The Oskaloosa Branch - The Lyons City Branch - and the
Fort Madison Branch
On Motion it was Resolved that the balance of Circulating
Notes which the Mount Pleasant Branch Bank is entitled to
receive by law be delivered to T Whiting Cashier - and the
balance of Circulating Notes to which the Burlington Branch
is entitled by law be delivered to W F Coolbaugh the
President, on the deposit of the requisite Safety fund in
each case .5.127
T3±xxami , Thursday Morning Session November 17th - 1859
Mr Clark offered the following

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Federal Reserve Bank of St. Louis

-18-

•

Resolved That the Executive committee shall have power,
and it shall be their duty, at any time when in their
opinion it may be necessary, to make a personal examination - by one or more of their number - of the affairs of
any Branch of the State Bank of Iowa, and - if in their
opinion it is necessary - to call a special meeting of
this Board, or to take such other action in reference to
such Branch or Branches as they may deem necessary - not
inconsistant with the Bank Law or the By Laws of the State
Bank of Iowa
On Motion adopted
Meetings beginning February 15, 1860


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Federal Reserve Bank of St. Louis

Thursday February 16th 1860
Mr Price was declared elected to the office of President
by Acclamation.
/T227
Thursday P M - February 16th 1860
The Directors met agreeable to adjournment
Members present same as before with the exception of
Messrs Allen and Coolbaugh The Committee to whom was referred the Report of the Executive
Committee at their meeting in Muscatine presented their
Report and accompanying papers as follows
The undersigned, a Majority of the Executive Committee,
having received information that the Cashier of the
Muscatine Branch was pursuing a course prejudicial to the
interest of that Branch and of the State Bank of Iowa,
repaired to that place on the 5th day of January last,
Esq of the Iowa
e
.Clark
and calling to their assistance f
City Branch proceeded to make a full and thorough examination
of the affairs of the said Muscatine Branch, and found that
Mr. Dutton the Cashier of said Bank had of the means of the
Branch upon his drafts drawn upon irresponsible parties
$16,900
and upon other paper considered poor
Overdrawn accounts of Dutton & Patterson
4o,000
J. W Dutton A P Patterson and others considered bad
4 100
Other paper bad and doubtful

-)

$ 61:000
To Secure which the Bank has a lien upon
Stock of Dutton & Patterson
And a lien upon the stock of
Bondsmen of the Cashier

$14,500

11,000
25 500

T-35,500

-19-

•

Which the committee consider the Cashiers Bond for
$50,000 signed by five persons is amply good for In making the examination of this Branch the Committee had
recourse to the Books and Accounts of said Branch - An
examination of the under officers - and also the examination
of the Coin and other funds in possession of said Branch,
And from said examination find the following to be the
situation.
/1237
Thursday P M Febry 16 1860
of said Branch To Wit
Due Depositors
(Special)
" Other Branches
" Circulation

$25,045.86

8,000.
5,342.78

55 414.
-802.64
,
$93-1

Cash on hand
Bills Discounted considd good
Balances
Safety Fund
Furniture
Over checks (good)
City orders
Deficiency

•

25,378.64
26,291.45
7,977.42
8,763.75
1,286.95
1,290.35
169.75

71,158.31
22,644.33

The above deficiency, or any other any other that may
appear in the final settlement of the affairs of this
Branch, is fully secured by a Deed of Trust Executed by
C Weed, on his property for $45,000A detailed Statement of the proceedings of the
committee was made out and forwarded to every one of the
Branches in the State, a copy of which is hereunto
attached and made a part of this report and to which
reference is hereby made
"Copy

of Statement to Branches

Sir

•

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Federal Reserve Bank of St. Louis

A meeting of the Executive Committee at the instance
of Mr. Stone was held at this place (Muscatine) on Thursday
Jany 5th for the purpose of examining into the condition
of the Muscatine Branch, it having been reported to him
that there was a deficiency in the accounts of the
Cashier who had resigned his office and put all of his
property into the hands of his Bondsmen to secure them.
Messrs Price and Stone were present - Mr Smith wrote

-20-

•

that it was impossible for him to attend, owing to sickness
in his family and authorized the other members of the
committee to act and he would concur Mr E Clark of Iowa City being present he was upon
invitation of the committee persuaded to act with them
and give them the benefit of his counsel,
/1247
Thursday P M February 16th 1860
The Committee made a full and thorough examination
of the affairs of the Branch and found it in a bad condition, Mr Dutton had of the means of the Branch upon his
drafts drawn upon irresponsible parties, and upon other
$16,900
paper considered poor
Overdrawn accounts of Dutton & Patterson
J W Dutton, A 0 Patterson and other
40,000
considd bad
4,l00
Other paper bad and doubtful

61,000

•


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Federal Reserve Bank of St. Louis

To Secure which the Bank holds
A Lien upon Stock of Dutton A Patterson
$14,500
paid up 50 pr ct
11,000
lien upon Stock of Bondsmen of
leaving a balance of

25,500

35,500

which the committee consider the Cashiers Bond of $50,000
signed by five persons here would apply to the larger
portion of, its means having been obtained by irregularities of various kinds, in a great part - with the exception of some suspended paper.
The parties upon the bond are Chester Weed, A C
Patterson, J W Lucas, S D Viele, & S Tufts.
Mr Patterson had already put all his property into
the hands of his bondsmen to indemnify them Upon mature reflection it was the unanimous decision
of the committee that the Branch should go into liquidation and wind up its affairs with the assistance of the
other Branches until such time as the required amounts
could be made upon the bond of the Cashier and its assets,
to reimburse them.
Its liabilities they found to be
Depositors
Special by bondsmen
Due other Branches
Circulation

$25,045.86

8,000.
5,342.78
55,414.

9_5,802.64

•

•

-;2
1257
Thursday P M February 16th 1860
Its assetts
Cash
Bills discounted considered good
Balances
Safety Fund
Furniture
Over Checks
City orders
Deficiency

$25,378.64
26,291.45
7,977.42
8,763.75
1,286.95
1,290.35
169.75
71,158.31
22,644.33

The parties to the Bond, the Committee were satisfied
were fully able to make it good with time.
After a consultation with its Directors and Stockholders who were anxious to go on, and be sustained by
the other Branches - Messrs Clark & Price proposed to
Mr Stone that he should take the Presidency of the
Branch under the control of the Executive Committee, and
That Mr Weed should place in the hands
control it ---to the amount of $45,000 - That he
security
of Trustees
clear the institution within one
associates
his
would with
of Dutton & Patterson and
indebtedness
the
all
of
year
stock at that time as origiits
make
and
paper
bad
other
nally $34,000 paid up and unimpaired, and then transfer
in such mannetr as should be approved by the State Board
500 Shares of its Stock, Which should be passed by the
Board of Directors of the Branch and a copy sent to the
State Bank, Under this the committee would pledge him
the cooperation and assistance of the Branches to sustain
the Branch by depositing money therein until its
consumation as above This propostion - tho at first rejected by Mr Stonewas at last accepted, and submitted to the Stockholders
and Directors of the Branch and acceeded to by them The proper action was at once taken by the Branch Mr Patterson resigned the
.L1
71860
Thursday P M February 1

•

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Federal Reserve Bank of St. Louis

Presidency and Directorship and Mr Stone was unanimously
elected Director and President of the Branch and entered
upon his duties - Mr Weed placed in the hands of E Clark
of Iowa City and H W Morse of Muscatine Securities to the
satisfaction of the Executive committee and the committee

-22-

•

adjourned on Saturday Jany 7 - 1860
Mr Price returning to Davenport, leaving Messrs Stone &
Clark to report the result to the Branches.
The Washington - Iowa City & Davenport Branches have
reported their willingness to cooperate in this
Arrangement and the committee trust their action will be
sustained by all the Branches as the best to be done under
the circumstances.
The Branch here will call only for what is needed to
sustain it, for which interest will be allowed and it will
devote itself to getting its affairs into a safe and
sound condition.
Will your Branch - upon receipt of this report to
Geo C Stone Prest if henry rely upon your proportion of
aid when you may be called upon by him.

•


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Federal Reserve Bank of St. Louis

A full report will be submitted to the board at its
next session - We have not time or space to explain the
reason why the branch became so much involved, We shall
leave that for our report to the Bank - We deem it now
in safe hands and that it can with your aid soon become
what we all desire Yours Respectfully
H. Price
G. C Stone
E Clark
The Committee also submitted to the Directors of said
Branch the preamble and resolutions marked (B) and which
is hereto attached and made part of this Report 277
Thursday P M February 16th 1860
Paper Marked BMinutes - Muscatine Branch
Saturday January 7th 1860
4th Meeting - Present A C Patterson - S D Viele - W F
Brannan I B Dougherty - J W Lucas - Chas Nealley - C Weed
A Farnsworth - Full Board
The following preamble and resolutions were read and
unanimously adopted.

-23Whereas it appears frSi an examination of the Muscatine
Branch of the State Bank by the Executive Committee, whose
attention have been called to the same, that said Branch
through the mismanagement of the Cashier thereof is in a
bad condition, and Whereas said Executive commiij
ittee propose,
in order to save and avoid more stringent measures that
George C Stone shall, under the direction of the Executive
Committee of the State Bank, take the Presidency of said
Branch at this time, and shall control the concern as he
may see proper, with the understanding that the Executive
Committee shall give all needed and possible aid therein,
and also in inducing the other Branches of the State Bank
to contribute whatever assistance may be required to make
and keep said Muscatine Branch in a good sound condition,
and further that the bondsmen of John W Dutton shall give
such security - for the payment of all defalcations or
claims - as shall be approved by said Executive Committee
and shall make the paid up Capital Stock amount to $34,000
elear and unincumbered, one half within Six Months - and
one hATf within twelve months, and shall transfer $50,000
Stock of said Branch - including the $29,000 now held by
said Branch
such manner as shall be approved by the
State Board -

•

Now Therefore in view of the foregoing, be it Resolved
by the Board of Directors of said Muscatine Branch that
the foregoing arrangement of the Executive Committee be
and the same is hereby agreed to
L1287
Thursday P M February 16th 1860
and accepted, and that a certified copy of this be forwarded to the State Board A C Patterson tendered his resignation as Director
and President of this Bank which on motion was Accepted •
On Mbtion
John W Lucas was appointed President pro tem of this
board and took his seat
On Motion the transfer of 150 Shares of Stock on the 2
inst and of 1 share on this day by A C Patterson to this
Branch as indemnity in part was approved.
On Motion the transfer of one share of Stock by Fredinand
Kaufman to George C Stone this day was approved -

•

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Federal Reserve Bank of St. Louis

Motion made and serried to proceed to fill vacancy in the
board caused by the resignation of A C Patterson Charles
Nealley and John R Dougherty were appointed tellers -

•

-2 -

I

Chester Weed nominated George
bz_ballot was then held and George
votes being all the votes cast
elected as one of the Directors of

C Stone - An Election
C Stone received Seven
and was declared duly
this Branch.

Mr. George C Stone then appeared and qualified by taking
Oath which was afterward filed with the Recorder of
Muscatine County.
On Motion the board proceeded to elect President of this
Branch by Ballot - George C Stone was nominated and having
received seven /7/ votes being all cast was declared
duly elected to that office On Motion adjourned
Chester Weed
Cashier

11227
Thursday P M February 16th 1860

•

I hereby certify that the foregoing is a true copy (except)
the oath of G C Stone as director which is recorded at
large and omitted here) of the proceedings of the Board
of Directors of this Branch at their meeting held day and
date as first written.
Cashr
Chester Weed
The Committee further state, that in their opinion the
Branch is now entirely safe as to Depositors and Bill
holders, and that in no case is there any probability of
any loss or damage to any person or persons except to the
Bondsmen of Mt Dutton in general and'C Weed in particular
All of which is respectfully submitted
February 15 - 1860
1
) Ex Corn
Geo C Stone)
H Price

The Committee reported the following Resolutions and recommended their adoption by this board
Resolved That the action of the Executive Committee in the
case of the Examination of the Muscatine Branch be and
the same is hereby approved -

•

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Federal Reserve Bank of St. Louis

Resolved That in consideration of the part taken in this
matter by Geo C Stone and the services rendered by him The State Board will cause to be transferred to said
Stone at any time when he may require it a majority of

•

-25the stock of said Branch, he paying par therefore and
making such arrangement in reference to the Washington
Branch as shall be satisfactory to the State Board.
Resolved That until the above arrangements shall
have been consumated the Branch at Muscatine shall be
conducted under the direction & control of the Executive
committee as at present Thursday P M February 16, 1860
Resolved That as soon as the Branch is in a sound condition
and the transfers made as above provided for, The
Executive Comt shall have power, and it is hereby madd
their duty to place the Branch under the control of its
officers and resign their charge
Wm T Smith)
i
H Price
E Clark

Comt

While the foregoing report and resolutions were yet under
consideration

•


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Federal Reserve Bank of St. Louis

On Motion adjourned to 7 Oclock this evOing
Thursday evening February 16th 1860
Board met in pursuance of adjournment - Members present
same as before The consideration of the report of the committee on the
condition of the Muscatine Branch was resumed The question recurring on the adoption of the first
resolution in the series reported by the committee
Those voting Yea were Messrs Bonson - Clark - Eaton
Graves - Harrison
Nmilmi Nobel - Price - Rand - Whiting
& Vice President - Ten votes being all the votes cast
The President and Mt Stone being at their request excused
from voting on this or either of the other three
succeeding resolutions.
The first resolution was declared adopted
The Yeas & Nays were then taken on the adoption of the
second resolution L1317
Thursday evening February 16th 1860

-26-

•

Those voting in the affirmative were Messrs BonsonClark - Graves - Harrison - Nobel - Price - Whiting
Vice President 8 Votes In the negative Rand & the President 2 Votes Messrs Stone and Eaton declined voting On the adoption of the third resolution Those voting
in the affirmative were Messrs Bonson - Clark - Eaton Graves - Harrison - Noble - Price Rand - Whiting - and
Vice President 10 - being all the votes cast The President & Mr Stone declined voting On the fourth Resolution Those voting in the affirmative
were Bonson - Clark - Eaton - Graves - Harrison - Nobki
Price - Rand Whiting and Vice President.
10 being all the votes cast Sae President and Mr Stone declining to vote
The Resolutions were all declared adopted.
Meetinfis beginning May 16, 1860
eonsidered statements of condition and dividends declared
of and by each Branch Bank.
Some approve only upon condition that bank carry to credit
of contingent fund one percent of capital.
Meetings beginning May 17, 1860
Among resolutions "Resolved that it shall be the duty of
of the State Bank until otherwise ordered by the board
President
the
person, at least once in six months, each of the Branches
in
to examine
Bank
and oftener if requested to do so by some member
State
of the
Board.'
State
of the
Meetings beginning August 15, 1860
Compensation of director5of St. Board changed to three
dollars per day with no allowiance for mileage.
Meetings beginning August 16, 1860
Directors and officers of respective Branch B-nks ordered
examinations at time of each monthly report.
personal
to make
Meetings beginning November 14, 1860

•

Consideration of dividend declarations.
conditional upon increase of contingent funds.


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Federal Reserve Bank of St. Louis

Some approvals

President authoriLed to require additions to safety funds

-27-

S

of respective banks if value of securities held in such funds declines.
Meetings beginning February 13, 1861
Nothing of interest.
Meetings beginning May 15, 1861
Consideration of dividends; general approval with exceptions
as noted previously.
Committee to investigate quarrel among stockholders of
Mt. Pleasant bank recommend "Where the safety and good standing of
the Branch is not endangered, it is not a matter requiring the
attention or interference of this Board . . ."
"Resolved: That the President be and he is hereby instructed
to receive no Ems Bonds of Southern States on account of Safety Fund
and to invest no funds of Branches in his hands in anything but
United States or Northern States Stocks."
Meetings beginning August 14, 1861
If president has "reason to believe" there is capital
impairment should order a reduction of circulation or increase in
specie or other action.
President authorized and requested to invest coin in S. F.
in U. S. or State bonds.
Meetings beginning November 13, 1861
Consideration of dividend declarations.
President ordered to place Washington Branch in liquidation
if the "actual Capital Stock" is not increased by $25,000 within
thirty days.
No Branch Bank to be hereafter admitted unless voted by
three-fourths of members present.
Meetings beginning February 12, 1862.
"Resolved; that the President appoint a Committee of three
to take into consideration what effect the passage of a law by
Congress making Treasury Notes a legal tender will have upon the
business of the State Bank of Iowa, and to enquire whether the
Branches may use such legal tender at par in the redemption of their
liabilities . . . ."

•

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Federal Reserve Bank of St. Louis

-28-

•

Washington Br. Bk. had brought up capital as previously
ordered and "the President is hereby authorized to transfer to
said Branch the remaining 89 shares now held by him in trust, and
also return to it the $10,000 in coin now in the possession of this
Board as a special Safety Fund."
Committee appointed above recommends that it not be deemed
forfeiture of charter if a Branch Bank redeems in legal tender
Treasury notes.
Meetings beginning May 14, 1862
If any Branch Bank sued for redeeming in legal tender
notes expenses will be borne by Board, through assessments on all
banks.
Report that several Branch Banks have refused to redeem
notes investigated by special committee, found to be false thus
requiring no action.
Consideration of dividend declarations.
disapproved, others approved.

Dubuque Branch

Meetings beginning August 13, 1862.

•

Reports of failure to redeem circulation found to arise from
offers to redeem in legal tender notes but refusals to pay in coin.
Held to be "right and proper and constituted no act of insolvency.'
Meetine beginning November 12, 1862
Consideration of dividend declarations.
Salary of president raised to

$8 per day plus travelling

expenses.
Meetings beginning February 11, 1863.
Nothing of interest.
Meetings beginning May 13, 1863
Consideration of dividend declarations.

Several not

approved.
FortMadison bank in difficulty. A special committee recommends
that assets be placed under control of Board and a receiver be
appointed. No action to be taken by receiver unless further examination shows bank insolvent. (Report adopted).

•

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Federal Reserve Bank of St. Louis

fiction

described in Preston7

-29Meetings beginning August 12, 1863
Nothing of interest.

Fort Madison laffi

affair apparently

closed.
Meetings beginning November 11, 1863
Consideration of dividend deelarations.
some conditional approvals.

Most approved,

Meetings beginning February 10, 1864
Recommendation that Iowa City Branch Bank increase specie
"to at least the legal amount on their circulation."
Resolution passed authorizing action to "wind up the affairs
of the Liowa City7 Branch . . ." if specie not raised to legal level.
This to be done before next meeting of Board.
Meetings beginning May 11, 1864.
Consideration of dividend 4clarations.

Most approved.

Meetings beginning August 10, 1864
McGregor Branch Bank ordered to increase specie to legal
tJI.
level and reduce liabilities of directors and
Meetings beginning November 16, 1864.
More detail ordered on
Dividends to be disallowed if an

ec u
fo
rancBa
hkai
n

a
o

ep rted.
thi .

"Ordered that no dividends shall hereafter be allowed to any
Branch whose quarterly statement shall show that the Directors or
Stockholders are liable as principles or sureties to an amount
greater than is allowed by law."
Consideration of dividend declarations.
some postponed.

Most approved:

No dividend to be allowed by any bank "which has failed to
comply strictly" with any orders of board.
Council Bluffs Branch Bank ordered to deliver $67,000 in
its own circulation or U. S. currency or bonds, to "protect the
circulation of said Branch." If not done, bank to be enjoined.
All Branch Banks ordered to reduce circulation within next
90 days to amounts equal to paid-in capital.

•

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Federal Reserve Bank of St. Louis

-30Meetings beginning February 15, 1865.
System beginning to break up.

Circulation being withdrawn.

Seriosof resolutions; all adopted:
3. Advisable to "preserve charter of State Bank.
5. No more notesffl7"other Br. Banksi to be paid out.
6. All notes to be sent to Secty.
8. Any Branch is permitted to sell its coin provided
thht it keeps deposited Fifty percent of its outstanding circulation
as safety fund or in proportion to the amount of specie sold.'
Meetings beginning May 10, 1865
Dissolution in this and other meetings.
November 22, 1865

•

•

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Federal Reserve Bank of St. Louis

Last


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Federal Reserve Bank of St. Louis

UNIVERSITY OF WASHINGTON
COLLEGE OF ECONOMICS AND BUSINESS
SEATTLE

December 7, 1939

•

Mr. Clark Warburton
Senior Research Assistant
Division of Research and Statistics
Federal Deposit Insurance Corporation
Washington, D. C.
Dear Mr. Warburton:

•

It is approximately twenty years since I worked on the records
of the State Bank of Iowa and I am frank to say my memory may not be
accurate on certain points. In the first place, the Record of the
Commissioners is a manuscript volume which was, and I assume still is,
in possession of the State Historical Society of Iowa in its vaults.
It is in handwriting in a large book of the old ledger type. My
memory is definitely that it does not contain statements of the bank
itself or of any of the branches. If they were officially published
in anything except perhaps the Iowa City papers, I am sure that I would
have noted this at the time. It seams to me the best answer that I
can give you is to send your letter immediately to Professor Benjamin
Shambaugh, who is superintendent and editor of the State Historical
Society records and ask for his cooperation. I will ask him to check,
if possible, on the records of the individual branches.
I find in checking hurriedly over the statements in my own
study that I state on pages 90 and 91 the conditions under which the
reports were to be filed and published. I am sorry this is not more
complete or that I cannot remember how much was actually available to
me at the time. I am interested to note also that an page 91 there is
apparently a typographical error which escaped my attention in spite of
considerable care in proofreading. This is the last sentence of the
first paragraph. A line must be omitted there.

•

I think, from the point of view of mutual guaranty of bank
obligations, the State Bank of Iowa has some very interesting history.
In the first place, as I have tried to point out, the directors were
very careful in the authorization of branches, and there was a mutual
liability on the part of the bank as a whole for all notes issued. As
the statement shows, note issue was a very important part of the liability
of banks. I find my statement regarding the action of the directors with
respect to the Fuscatine Branch is rather inadequate. I point out (page
106) that it was necessary for the executive committee of the State Bank
to take over the management of this branch. There was cuite a little
apparent consideration given to this, and while I have touched it rather
briefly, it probably should have been stressed somewhat more, certainly
from the point of view of mutual guaranty which you are considering.


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Federal Reserve Bank of St. Louis

411

LT. Warburton

-2-

December 7, 1939

4
You will observe in the Table of Dividends Paid by the Branches that this
branch did not pay any from 1860 to 1863. This was the period when it
was using all of its earnings to restore a loss occasioned by the dishonesty
of the cashier.
I think the old State Eank of Iowa has a very interesting career
and I wish I had given a little more attention to writing up the details
of its history. At the time I had probably as good an opportunity as
aaybody could and I should have included some detail which other investigators might use. This probably would have been more valuable than some
of the later chapters of the book which were of great interest to me then
and appeared to make the volume have a little broader interest. Actually,
the inquiries I have had or the genuine interest evidenced has been in
the earlier material.

Cordially yours

H. H. Preston
Dean

•
EHP:jh

•

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Federal Reserve Bank of St. Louis

FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON 2.5

October 24, 1951

State Auditor
Des Moines, Iowa
Pear Sir:
The Division of Research and Statistics of this Corporation
is attempting to secure information on the various State banking
systems which provided insurance for bank creditors prior to the
establishment of federal deposit insurance in 1933. , Since the State
Bank of Iowa, 1859-1865, was one such system, we are interested in
its records, particularly the statements of condition of the Branch
Banks for at least one date in each year that the State Bank was in
operation.

•

The law establishing the State Bank required that the
cashiers of the Branch Banks send detailed reports, semi-annually,
to the State Auditor. Reports of the State Auditor for the years
1859-65, as reprinted in Iowa Documents, do not include these cashiers'
reports. We are writing therefore to ask whether it is possible that
these reports are still located in your office and, if so, whether
they are available for research purposes.
Your cooperation in helping locate these early records
would be very much appreciated.
Very truly yours,

Edison H. Cramer, Chief
Division of Research & Statistics

Gentlemen;

We are sorry to ;advise that reports
btate for the ye-r5 lg59-65 are not
of
of the Auditor
We have in our library reports
office.
this
available in
but back of that dete
eighty's
early
the
as far back as
reports.
any
have
to
we don't seem
Your very truly, /

411


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Federal Reserve Bank of St. Louis

D.M.In.10-29-51;

#
4-'"'.‘(vt-tv-71
Deputy Auditor)

3o=

*tate ;13epartincrit of 05torp
nub Arriliurs
IUSTORICAL BUILDINS

Ors itioittr5 lg
allaube L Cook, illurutor

November

6, 1951

Edison H. Cramer, Chief
Division of Research & Statistics
Federal Deposit Insurance Corporation
Washington 25, D. C.
Dear Sir:
In checking the official records in the archives division of
this department in relation to Iowa banking, we find none on file
from the office of the Auditor of State or his predecessor, the
Auditor of Public Accounts, relating in any way to the State Bank
of Iowa in 1859-1865, referred to in your letter of inquiry of
October 24. The earliest date of these in our files is 1873.

•

We do not have the volume of records of that department covering the earlier period, nor have we been able to locate same.
Inquiry has been made of the present State Department of Banking
and a response from the superintendent states "we have no idea
where these records may be found." Similar inquiry has been made
of the present Auditor of State, and we are informed that the
records in that office now available do not date prior to the 80,s.
Therefore, we have no other source to seek information as to their
whereabouts or whether yet in existance.
A number of years ago several historical articles appeared
in the Annals of Iowa, the historical quarterly published by this
department, sketching details of operation of the State Bank of
Iowa, listing the several banks and the prominent men of the state
who served upon its board and operated its branches. Perhaps some
of the information you seek may be secured from this source, as
at least one of the articles listed officers, amount of dividends
paid, and presented statements as of February 7, 1859, and as of
January 2, 1865. This will be found in the issue of Vol. V, No.
2, pp. 93-116, and was written by Maj. Hoyt Sherman, previously
cashier of the Des Moines branch, and president of the Equitable
Life Insurance Company of Iowa. Major Sherman was one of Des Moines
most distinguished citizens and a brother of General Wm. T. Sherman
and U. S. Sen. John Sherman of Ohio.
In two other excellent articles the activities these institutions were also outlined in articles, being

•

January, 1894, Vol. I, No. 4, Pp. 266-293, by Hiram Price,
one of the founders of the State Bank of Iowa, and an Iowa congressman 1863-69.


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Federal Reserve Bank of St. Louis

Edison H. Cramer
November 6, 1951
Page 2

July 1906, Vol. VII, No. 6, PP. 405-411, by J. T. Remey, re
Wm. F. Coolbaugh, who with others established the Burlington branch
of the State Bank of Iowa.
The above mentioned issues of the Annals would most likely be
found at the Periodical Division of the Library of Congress at
Washington. Three other institutions there also receive same,
perhaps having bound files dating back to the numbers containing
the articles referred to, being
The Indian Office Library, Interior Department
The National Archives
The Bureau of American Ethnology, Smithsonian Institute
On July 15, 1946, Congressman Henry O. Talle, from the Iowa
Second District, delivered an address in the U. S. House of Representatives upon the subject, "A Century of Banking in Iowa," in
which he reviewed the history of that early period and the changes
made in the constitution of this state relating thereto. There
may be some information in Mr. Tallets address which you do not
already have upon the subject.

•
Claude R. Cook
Curator
CRC:ws


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Federal Reserve Bank of St. Louis

The State Historical Society of Iowa
Iowa City, Iowa
Office of the Superintendent
William J. Petersen

UoveiTher

,,

Mr. Edison H. Cramer
Chief, Division of Research and Statistics
Federal Deposit Insurance Corporation
Washington 25, D. C.
Dear Mr. Cramer:
In reply to your let Ler of October 24, I am
very sorry to state that to my knowledge the books
containing the monthly abstracts of the statements
of the Branch Banks of the State Bank of Iowa have
not been located.
I would suggest, however, that you contact
Mr. Newton P. Black, Superintendent of Banking,
State Department of Banking, 500 Central National
Bank Building, Des Moines, Iowa. Mr. Black perhaps may have additional information that may be
quite useful to you. Our limited staff at this
time almost makes it impossible for us to check
back into the Iowa newspapers.
Very sincerely yours,

.9/7zeatvyv,.
William J. Teterseri
Superintendent
WJP:pak

•

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Federal Reserve Bank of St. Louis

fPfvf.faaR4t-

,t4

ciAA144—
you for •-our letter of

e

er (7.

;he records in (uest;ion cslinot he located, we will pr

-,ts of the -;t-te sank from Your files of the lo,rp

cop.os o'
;0 tha

we

,iy -ant to secure photo-tat"

imry Le

could you inform us

,repred to do thisjiloctifxxxcetiociendocact

ur library has facilities for preparin7 photo-tats
• 0Ap noted. in our prov.ous le,5er, we

ity —epubliccr.

if so,

'KJe
onlY want photostats if 4Fte saements

include iems for each of the *rsnch -)anks.
Let
have

tae this orrortunity of expressin7

r

71preciation for ". ss.clsttce You

ivon us.
ery truly 7ours,

0,
e Aee%
/ M—Aely
° 4

7
4,4


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Federal Reserve Bank of St. Louis

114e

The Early Aistory of Banking in Iowa, by Fred D. Merritt
Thesis, University of Iowa, 1900

s
The period covered an this Early History of tanking in Iowa extend
condiic
econom
and
cal
politi
the
of
from 1836 to 1846, with short sketches
It includes the
tions from 1846 to the Constitutional Convention of 1857.
bunk, and the dised
charter
only
the
e,
history of the Miners' Bank of Dubuqu
and 1846.
1844
of
tims
Conven
utiJnal
cussions of banks in the Constit
scattered.
The material from which this history has been drawn..is widely
author
the
But
pages.
to
about
ng
coveri
0)
149-15
There is a bibliography (p.
y
librar of the
states that the principal part of the material was found in the
ls of the House of
State Historical Society At Iowa City, including the Journa
of the Iowa Capital
Representatives and Council of Iowa Territory, and the files
1845 and the
Reporter from 1841 to 1846, and the Iowa Standard from 1840 to
Bloomington Herald from 1841 to 1846.
at the library of
The file of the Dubuque Visitor and Iowa News was found
Iowa State library. Other
the tate Historical Department lately merged into the
Newberry library, the
material was found at the library of the U. od Chicago, the
Society of Wis.
cal
Chicago Public library and the library of the State Histori
tements have been
There are no statistical tables, but one or two bank st
included in the book.
The table of contents is as follows:
Chapter
1.

The Legislative Investigations 1837-38
1. The Firut Investigation
4. The Issuing of Post Notes
3. The Lffects of the First Investigation
4. The Second Investigation
(a) The Interrogatories and Answers
(b) The Testimony of G.D. Dillon
(c) Discussion of the Report
(d) The Supplemel.tary Investigation
(e) The Memorial to the Legislature
5. The iiewspaper Correspondence
111. On the General State of the Currency
1. Opposition to Small.Bank Bills
2. Scarcity of Silver
3. Stay of Execution
4. Public Opinion in hegurd to Banks
11.

•

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Federal Reserve Bank of St. Louis

Organization of the liners' Bank of Dubuque
1. Introduction
2. The Charter
3. Confirmation of the Charter by Congress
4. The Openint of the Barirc

•

•


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Federal Reserve Bank of St. Louis

5. Character of the Paper Money in Circulation
6. The Governor's Recommendation
1 . Banking in Iowa from 1838 to 1841
1!
1. The Third Investigation
2. The Results of the Investigation
3. The Proposed Bank of Charleston
4. Condation of the Miners' Bank in 1841
5. The Loan of the liners' Bank to the Territory of Iowa
6. The Panic of 1837 and General Suspension of specie Payments
7. Suspension of Speci Payments by Miners' Bank
V. Banking in Iowa from 1841 to 1844
1. The Attitude of the Fourth Legislative Assembly
— (a) Position of Democrats in the Council
(b) Position of Whigs in the Council
(c) Action in the House
2. Proposed Bank of Davenport
3. Change in Stockholders Of the Miners' Bank
4. The Failure of the Territory of Iowa to Pay the Debt
Due to the Miners' Bank
5. Attempt in the Fifth General Assembly to Revoke the
Charter of the Miners' Bank
(a) Majority Report of Select Committee of tie House
(b) Minority Report of Select Committee of the House
(c) Consideration of Reports by the :ouse
(d) Action by the Council
6. The Claims of Improper Influences
(a) The Majority Report of Select Committee
(b) The Minority Report of Select Committee
7. The Miners' Bank in the SixthLeisislative Assembly
(a) Reception of Petitions
(b) The Discussion in the House
(c) The Discussion in the Council
(d) The House Refuses to Concur
8. The hesudiptieb of Specie Payments by Miners! Bank
Vl. The ,,lieL.tion oi Banking Before the Constitutional Convention
of 1844
1. The Majority and Minority Reports on Banks
2. Repirt of the Select Committee on Banks
3. Report of Committee on Incorporations
4. The Constitution of 1844 as Viewed by the Iress and
People
Vii.pulination of the Opposition to Banking
1. Ietition For a Stock Bank at Iowa City
2. Repeal of the Charter of the Miners' Bank
(a) In the House
(b) In the Council
(c) Provisions of the Bill
3. Provision for tayment of Debt Due the Miners' BaAk by
the Territory of Iowa
4. Protest against Provision for Banks in the Constitution
5. Address of the Direttors of the Miners'Bank "to the
People of Iowa"
6. Petitions to Congress to Disaffirm the Acts Granting
Banking Privileges to Citizens of Territories.

7.
8.
J.
10.
11.

•

•

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Federal Reserve Bank of St. Louis

The Closirk; of the 3ank
Constitutional Convention of 1846
0liosition to the Constitution
The Whig and .0emocratic Reasons for Ratiiiti);.
The Attmel,t to ;Lmend the Constitution of 1846, and
Ad4tion of the Constitution of 1857

History of Banking in Iowa by Howard H. Freston. 1942
(Thesis, U. of Iowa)

This book of
ing in Iowa from
cludes all types
Associatian also

about 400 pages undertakes to give a history of ban -the earliest settlement to the present time. It inof banks and financial institutions. The Iowa Bankers
receives considerable attention.

In the developpent since the founding of the national banking system,
the experience of Iowa appears to have paralleled that of the other Commonwealths. The most distinctive feature of the banking situation in
Iowa around 1922 was the large number of banks, and the majority of these
banks mabill.country banks.
The establishment of the present commercial and savings banks system
amd its uevelopment to 1922 are sketcheu in chapters V11 to X.
The main portion of the study was carried on in the research rooms of
The State Historical Society of Iowa. There is no bibliography given,
but there are 45 pages of notes and references.

•

The few statistical tables scattered through the manuscript are headed
as follows:
Table 1.

Combined Statements of the Branches Of th
For the years 1859,60, 61, 62, 63, 64, 65

State Bank of Iowa

Table 11. Per Cent of Dividends Paid by Branches of the Stte Bank 01
Iowa, years 1_58 to 1664
Table 111.Numbers, Delosits, Capital Stock, and Total Assets of the
National Ban_r.s in Iowa, 1863-1920
Table 1V. Numbers of baaks in Iowa, 1875-1920, divided as to Nati.:;nal,
Authorized, State Supervised and Private Banks.
Table V.

Number, Deposits, Capital Stock, and Total Assets of State
and Savings B'griks and Trust Comianis in Iowa, 1875-1921

Table Vi. Classification of Iowa Banks According to Capital, April 28.
1909, by Types of Banks
Table V11. Exchanges in Iowa Clearing Houses
Table V111. National Bank Failures in Iowa Form 1865 to Oct. 30, lj20
Table 11. Number of Building and Loan Associations in Iowa, 1896-1918

•

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Federal Reserve Bank of St. Louis

Table

X. Value of karm Property in Iowa, 1850-1920....


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Federal Reserve Bank of St. Louis

Table

Xi.

Table H11.

Farm Mortgage and Debt Reports fro Iowa
Farm Operation and Ownership in Iowa.

Table X111. DataConcerning the Morris Plan Companies in Iowa
Taule X1V.

Table XV.

Table XV1.

Reasons for Borrowing From the Morris Ilan Companies of
Waterloo and Dedar Rapias
Net Earnings and Dividends of the Country National Banks
in Iowa, 1896-1919
Fresiaents and Places of leeting of the Iowa Bankers Ass'n.

The book is divided into fifteen chapters, the headings of which are
as follows:
Chapter

•

1. Economic and Political Background
11. The Einers' Bank of Dubuque
111. Prohibition of Banking
1V. Frontier Banking in Iowa
V. Cinstitutional Authorization of Banking Corporations
Vi. The State Bank of Iowa
V11. Establishment of the .resant Banking System
V111. Development of Banking, 1875-1921
1X. Supervision of Banking
X. The Federal Reserve System in Iowa
Xl. Building and Loan Associations
X11. Farm Mortgage Banking
X111. Special Types of Banking
X1V. Banks and the Community
XV. The Iowa Bankers Association

-1-

•
Asset and liability data for the State Bank, i.e., the

Branch Banks collectively, and also the Branch Banks individually, for

most years from 1858-64 are available for several dates in each year

beginning 1859.

No data are available for private banks.

Distribution of banks by size.

Most of the Branch Banks

making up the State Bank of Iowa were relatively small.

For the period

during which the Fund was in operation tiiaimiki the

of the Branches had total obligations (circulation plus deposits) of

•

less than $200,000. At the end of 1859 none of the Branches had
exceeding $400,000 and seven of the total of 12 actually had
obligations
obligation/of less than $100,000. Close to the termination of the
Fund's operation of the 15 Branches, six had obligations of less than
$200,000, six had obligations of between $200,000 and $400,000 and the

remaining three fell into the larger size groups of which only one had

obligations exceeding $800,000.

Table A shows Branches grouped by size,

1858-1864.

Total Branch obligations.

•

Available statements indicate

that total obligations increased in each year beginning in 1859 and
reached a peak in 1864 gg.morq,than $4,500,000. Circulation reached
a peak at the end of 100,3. ror the year end 1864 circulation figures


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Federal Reserve Bank of St. Louis

-2-

show a slight decline reflecting the ipginning of the movement to

convert to National Banks.

Deposits rose steadily for the entire

0
period and more than doubled from 1859 to 1869.

Table B shows

obligations of the State Bank of Iowa, 1858-1864.

There is some evidence that circulation did not have in

Iowa the importance that it enjoyed earlier in western States.

As

shown in Table B circulation exceeded deposits in only one year, 1859.

In 1863, when circulation was at its peak, it constituted less than

•

42 percent of combined deposits and circulation.

It is also clear that the Branch Banks did not expand circulation

to the full extent permissable under the law.

From individual Branch

Bank statements it appears that, of the 15 Branch Banks, 13 had capital

of less than $100,000 during the entire period, while the capital of tw(

did not exceed $200,000 in 1865 and was probably less than $100,000

for part of the period.

Consequently, circulation of the State Bank

could have been expanded to about twice the capital during any year

between 1859 and 1865.

•

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Federal Reserve Bank of St. Louis

That this was not the case is shown in Table 2.

-3-

Failure of the Branch Banks to expand circulation to its

authorized limits was probably due in part to a change in the habits

of bank customers respecting use of checking accounts and in part to

the fact that the Branch Banks were limited by the required specie reserve

of 25 percent.

Because of the provision of law which required that

Branch Banks also retain 25 percent of their deposits, it is impossible

to tell how closely they were restrained by the requirement of a specie

reserve for circulation.

S

Data presented in Table

3 shows that specie relative to deposits

plus circulation fell from 50 percent in 1859 to about nine percent in

1865 but specie relative to circulation alone never fell below 27 percent.

It may be presumed that originally there were large specie deposits but

that as deposit banking became important other assets were used as

deposit reserves; e.g., United States notes, and specie served only

as a reserve for circulation.

Distribution of Branch Bank circulation.

•

As was mentioned

earlier circulation was the only obligation covered by the Iowa insurance

system and consequently it might be well to give further attention to


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Federal Reserve Bank of St. Louis

this item.

Table C shows the percentage distribution of circulation

and deposits among Branch Banks grouped by size for two s&lected dates

during the period during which the system was in operation.

Examination of Table C indicates that in 1859 circulation

was concentrated in the smaller sized banks.

Over 82 percent of

circulation was in 93 percent of the Branches, all of which had total

obligations under $200,000.

However, this was not true for the year

1864. Only 27 percent of circulation was concentrated in the smaller sized

•

Branches which made up 40 percent of total Branches.

35 percent of six

circulation was in the 40 percent of Branches composing the medium sized

group, while over 38 percent of circulation was held by the remaining

20 percent of Branches classified in the largest size groups.

This

seems to be the reverse of the situation found in Ohio where there was

a minimum of concentrated risk to the insurance system due to the

fact that as a bank became larger the proportion of its insured obligations

tended to decline.

In Iowa one might unhesitatingly conclude that the

risk tmxxxiwg borne by the insurance system in the case of the larger sized

•

banks appears to have been considerable.


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Federal Reserve Bank of St. Louis

This can be further corroborated

111

by glancing at the Etat asset and liability statement of the individual
Branch Banks for January 1865 which gives indication of the distribution
of circulation among the Branches.

These data are summarized in Table 4

and show that on that date deposits exceeded circulation in ten of the
Branch Banks.

Because of the variation in the extent to which various

Branch Banks expanded ctrculation, again one can readily agree that the
degree of concentration of risk to the insurance system was surprisingly
large.

About one-fifth of the entire circulation of the State Bank in

1865 was attributed to the Branch Bank at Dubuque.

Circulation of this

Branch plus the Branch Banks at Burlington and Des Moins was about onehalf drtotal circulation although the banks constituted only one-fifth
of the number of banks.


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Federal Reserve Bank of St. Louis

'r:Table 1
Branch Banks Comprising the State Bank of Iowa,
Names and Dates of Admission

Name

Date of Admission

Muscatine Branch of the State Bank of Iowa

October 9,]58

Iowa City Branch of the State Bank of Iowa

October 9, 1858

Des Moines Branch of the State Bank of Iowa

October 9, 1958

Dubuque Branch of the State Bank of Iowa

October 9, 1858

Oskaloosa Branch of the State Bank of Iowa

October 9, 1858

Mt. Pleasant Branch of the State Bank of Iowa

October 9, 1858

Keokuk Branch of the State Bank of Iowa

October 9, 1858

Merchangs Branch of Davenport of the State
Bank of Iowa

October 9, 1858

Lyons City Branch of the State Bank of Iowa

February 17, 1859

Branch of the State Bank of Iowa at Burlington

March 18, 1859

Washington Branch of the State Bank of Iowa

March 18, 1859

FoirMadison Branch of the State Bank of Iowa

August 11, 1859

McGregor Branch of the State Bank of Iowa

February 15, 1860

Council Bluffs Branch of the State Bank of Iowa

November 14, 1860

Farmers Branch of the State Bank of Iowa at
Maquoketa

February 10, 1864


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Federal Reserve Bank of St. Louis

lj Preston, op. cit., p. 101.

-16 Asset and liability data for the State Bank, i.e., the
Branch Banks collectively, are presently way available for one date
in each year beginning in 1859.

Similar data for the Branch Bdmks

individually are available for one date in 1859 and one date in 1865. 1/
No data are available for private banks.

Complete asset and liability

data for dates now available are shown in the appendix to this study. 2/
As

noted earlier, only circulating notes were covered under

Iowa's insurance plan.

The few statements now available indicate that

circulation of the State Bank increased in each year beginning in 1859
and reached a peak in 1864 of more than $1,500,000.

In 1865 circula-

tion vas down slightly, reflecting the beginning of the movement to
convert to National Banks.

Table 2 shows circulation of the State Bank

for one date in each year of its operation.
There is some evidence that circulation did not have in
Iowa the importance that it enjoyed earlier in western States.

As

shown in Table 2, circulation exceeded deposits in only one year, 1862.
In 1864, when circulation was at its peak, it constituted less than

Ao percent of combined deposits and circulation.
It is also clear that the Branch Banks did not expand circulation to the full extent permissable under the law.

From individual

Branch Bank statements,f'it appears that, of the 15 Branch Ba/)ks, 13
had capital of less than $100,000 during the entire period, while the
A/ Mere complete information is available in newspapers and manuscript volumes now in possession of the State Historical Society of Iowa
g
at Iowa City. There are at least 40 issues of newspapers containin
Bank.
State
the
of
reports
of
monthly abstracts
.221, Appendix, pp.


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Federal Reserve Bank of St. Louis

-17 -

capital of two did not exceed $200,000 in 1365 and was probably less
than $100,000 for part of the period.

Consequently, circulation of the

State Bank could have been expanded to about twice the capital during
any year between 1859 and 1865.

That this was not the case is shown in

Table 2.
Failure of the Branch Banks to expand circulation to its
authorized limits was probably due in part to a chanapin the habits
of bank customers respecting use of checking accounts and in part to
the fact that the Branch Banks were limited by the required specie
reserve of 25 percent.

Because of the provision of law which required

that Branch Banks also retain 25 percent of their deposits, it is impossible to tell how closely they were restrained by the requirement
of a specie reserve for circulation.
Data presented in Table 3 shows that specie relative to
deposits plus circulation fell from 50 percent in 1859 to about nine
percent in /865 but specie relative to circulation alone never fell
below 27 percent. It may be presumed that originally there were large
specie deposits but that as deposit banking became important other
assets were used as deposit reserves; e.g., United States notes,

OnA

specie served only as a reserve for circulation.
Of the two statements showing asset and liability items of
-14)r- inctiodual,„

70Mtanch Banks, only that of January 1865 gives indication of the distribution of circulation among the banks.
in Table

4

These data are summarized

and show that on that date deposits exceeded circulation in

ten of the Branch Banks.

Because of the variation in the extent to

which various Branch Banks expanded circulation, the degree of


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Federal Reserve Bank of St. Louis

- 17a -

Table 2
Note Circulation, State Bank of Iowa, 1859-1865 1/

Year

Number of
Branch tBanks '.f

1859

8

1860

12

Amount
$

Circulation
As percent of circulation plus deposits

As multiple
of capital

106,798

31.2%

.50

634,163

45.6

1.34

1861

14

652,406

34.5

1.06

1862

14

1,149,935

50.9

1.56

1863

14

42.2

1.46

1364

14

1,532,739

39.3

1.54

1865

15

1,439,764

33.6

1.37


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Federal Reserve Bank of St. Louis

17 Preston,

1,416,811

pp. 119-20

Table 3

Circulation, Deposits and Specie, State Bank of Iowa, 1859-65 1/
4c

r

As a percentag
of circulation
plus desositE,

Year

Specie

Circulation

Deposits

Specie
Circulation

1859

07/19

$ 106,798

$ 235,383

160.3%

50.0%

1860

284,432

634,163

757,543

223.0

20.4

1861

382,478

652,406

1,279,498

58.6

19.8

1062

659,378

1,149,935

1,110,453

57.3

29.2

1863

440,285

1,416,811

1,943,960

31.1

13.1

1064

418,710

1,532,739

2,362,426

27.3

10.7

1365

389,302

1,439,764

2,851,462

27.1

9.1


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Federal Reserve Bank of St. Louis

1. Preston, op. cit., pp. 119-20.

- 17c
Note Circulation, Branch Banks Cqmprising the
State Bank of Iowa, 1865 1/

Bank
All Branch Banks
(State Bank)

Circulation, January 2, 1865
AS Pereeat of
deposits plus
As percent
circulation
of total
Total
$1,439,764

100.0%

As multiple
of capital

33.6%

1.4

Branch Banks located at:
Buiiiington
Council Bluffs
Davenport
Des Moines
Dubuque

266,940
97,904
1,785
140,035
283,837

18.5
6.8
.1
9.7
19.7

32.6
63.1
.4
62.7
44.0

1.8
2.0
.03
1.8
1.9

Fort Madison
Iowa City
Keokuk
Lyons City
Maquoketa

68,886
32,276
132,477
86,586
30,640

4.8
2.3
9.2
6.0
2.1

77.9
13.1
45.9
43.7
29.5

.9
.5
1.7
1.7
1.2

McGregor

19,484

1.4

82.9

.4

Mt. Pleasant
Muscattve.

90,390
64,390

6.3
4.5

29.8
24.4

1.8

Oskaloosa
Washington

81,131
43,003

5.6
3.0

55.8
13.0

1.1
1.6
.9

Kaox, John Jay, History of Banking in the United States (New York:
Bradford Rhodes, 1900), p. 772.


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Federal Reserve Bank of St. Louis

-18 concentration of risk to the insurance system was surprisingly large.
About one-fifth of the entire circulation of the State Bank in 1865
was attributed to the Branch Bank at Dubuque.

Circulation of this

bank plus the Branch Banks at Burlington and Des Moines was about onehalf of total circulation although the banks constituted only onefifth of the number of banks.

Financial History of the Insurance Fund
During the seven years in which Iowa's insurance plan
in operation no insured bank failed.

was

Consequently the insurance fund

was never called upon for any payments and, with the end of the State
Bank in 1865, was liquidated and distributed among the stockholders
of the various Branch Banks along with other assets.
At its peak in 1865 the insurance fund totaled 008,906, at
which time note circulation of the Branch Banks was almost 4,500,000.
Thus in the final year of its existence the fund was About one-fifth
of its contingent liability.

Between 1859 and 1865 it ranged from a

low of 16.4 percent of total circulation to a high of 29.7 percent.
Table

5

compares circulation and the insurance fund from

1859 to 1865.

On the basis of these figures the fund seems to have been
more than adequate, particularly when its relative size is compared
with that of other insurance funds established then or later by the
States, or with that prevailing today under Federal deposit insurance.
However, it must be remembered that this was not similar to other insurance funds (except Ohio's).

In fact, all of the assets of insured

banks were pledged for the redemption of the notes of a failing insured


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Federal Reserve Bank of St. Louis

-19 -

bank and the insurance fund was simply made up of those assets which
the banks agreed would be liquidated first in the event of such a
failure.
The burden of the insurance fund must have been negligible.
Since ownership of the fund remained with the Branch Banks, who
received the interest secured from its investment, the fund could only
have been burdensome insofar as an individual Branch Bank would have
preferred to have a smaller proportion of its assets invested in
Federal and State securities than was done for it through the insurance
fund.

That this proportion was excessive in the early years may be

suggested by the fact that no Federal or State bonds are shown for the
Branch Banks until 1863, although this may simply have meant that
previously they were included with "other items".
Evidence that the Branch Banks did not consider their investment in the insurance fund burdensome is given by the fact that at all
times they had a larger amount invested than the law required.

It will

be recalled that each Branch Bank was to deposit with the State Bank
a sum equal to 1217 percent of the circulation it originally received
and that, as it received additional circulation, it would make further
contributions to the fund of the same relative size.
in Tale

However, as shown

5, the insurance fund was never less than 16 percent of actual

circulation and in three of the seven years exceeded 20 percent of that
item.

On the other hand, the fund ranged, with the exception of the

first year, from 11.4 to 15.0 percent of authorized circulation.
It may, of course, have been partially a matter of convenience
to keep in the fund the entire amount which might eventually be called


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Federal Reserve Bank of St. Louis

a

- 19a -

7a-hie

57

Circulation and Insurance Fund, State Bank of Iowa, 1859-65 1/

Circulation

Year

Actual

Authorized. 2/

1859

$ 106/798

$ 431,100

1860

634,163

Amount
$

31,680

Insurance fund
Az percentage
of actual
circulation
29.7%

As percentage
of authorized
circulation

7.3/3

946,040

107,833

17.0

11.4

1861

652,14

1,228,260

14o,418

21.5

114.

1862

1,149,935

1,474,340

220,867

19.2

15.0

1863

1,416,811

1,938,640

238,900

16.9

12.0

1864

1,532,739

1,988,6110

251,906

16.4

12.7

1865

1,439,764

2,071,400

308,906

21.5

14.9

.
1
.
/ Preston, op. cit., pp. 119-20.
.21 For 1859-64 estimated by multiplying paid-in capital by 2; for 1865
estimated by applying to paid-in capital of each Branch Bank the multiple
applicable under the law.


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Federal Reserve Bank of St. Louis

20

for rather than to continually adjust the amount as circulation was
changed.

Nevertheless, continued overinvestment in the fund, even

to the extent of exceeding in a few years more than 14- percent of
authorized circulation, strongly suggests that the Branch Banks were
not disturbed by its existence.

Operation of the Insurance System
APPraisal of Stikvi. ion of the Insured Banks
NOTE: It is not considered practical at this time to attempt the writing of these sections. Some information bearing on
both is in the Preston study previously cited.

This includes a

sketchy, and quite unsatisfactory, account of two instances in which
a Branch Bank had to be assisted by the other Branch Banks (although
apparently no financial assistance was required) and a few brief comments to the effect that supervision was both just and thorough.
However, there is reference to a manuscript volume entitled
Record of the Board of Directors which Apparently contains precisely
the information required for both sections and which is located at the
state Historical Society.

Also, it appears that another manuscript

volume entitled Record of Proceedings of the Branch of the State Bank
of Iowa at Iowa City is located at the same place.

These volumes,

the
along with newspapers and whatever other records are available at
s can
State Historical Society, must be examined before these section
complete.
be written and before the other sections can be considered


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Federal Reserve Bank of St. Louis

21

Appraisal of Iowa's Insurance System
the point of view of protection provided the circulating
medium in general and note-holders individually, Iowa's insurance plan
was an unqualified success.

The circulating medium was never dimished,

nor did aay holder of circulating notes suffer a loss, as a consequence
of bank failure.
Since the Iowa plan was essentially one of mutual guaranty,
the reasons for its success are similar to those advanced for the success of the Indiana plan.

These reasons are discussed at length in the

Indiana study and since they are also applicable here will not be repeated in detail.

Briefly:

the plan contributed to bank stability by

nsking all insured banks liable for the failure of any one of their
number and, at the same time, made it possible for each insured bank
to keep close watch over its neighbors through the device of a supervisory board with substantial power consisting almost entirely of representatives from each of the insured banks.

The plan resulted in a

conservatively-managed banking system in which the supervisory authorities made full use of their broad power to guard against bank failures.
Whether, at the same time, such a system adequately met the needs of the
community for a circulating medium is an open question which will not
be ge&Cagglat this point.
Iowa's plan did enjoy one advantage over Indiana's in that
it was adopted just following a serious financial crisis and operated
in a period of war-time inflation in which specie payments were suspended for a number of years.


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Federal Reserve Bank of St. Louis

However, the fact that both the Indiana

22
which
and Ohio plans operated successfully over longer spans of time,
Included periods of depression, indicates that this may not have been
a factor of major importance in the success of the Iowa plan.


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Federal Reserve Bank of St. Louis

Carter H. Golemhe

Bibliography

Books and articles
Raman's Bankers Directory, Library of Congress, Washington,
D. C.
Knox, John Jay. A History of Banking in the United States.
New York: Bradford Rhodes & Co., 1900.
Preston, Howard H. History of Banking in Iowa.
State Historical Society of lo a, 1922.

Iowa City:

Thompson's Bank Note and Commercial Roporter, Library of
Congress, Washington, D. C.

Laws


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Federal Reserve Bank of St. Louis

Acts and Resolutions of the State of Iowa, 7th General Assembly, 1858.


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Federal Reserve Bank of St. Louis

411116111101r OF BANK OBLIGATIONS IN IOWA,
1858-65

By
Carter H. Goleabe


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Federal Reserve Bank of St. Louis

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