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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ek —Ra....k Ohli:54.-k- cs--J I 01, /S'd5"-- • MATERIALS REGARDING INSURANCE OF BANK OBLIGATIONS IN IOWA, 1858-1865 Contents Legislation Abstracts from meetings Correspondence and excerpts Statistical data • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org 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- https://fraser.stlouisfed.org 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• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of 127 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mon. Ap pointment •28 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- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 130 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. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. • • ' '. 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 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis V 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 134 LAWS 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 136 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- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 137 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 38 LAWS OF IOWA. 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 139 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, ! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 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. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF le/WA. 141 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. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 142 LAWS OF IOWA. 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- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 143 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- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 144 LNWS 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 145 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14t; , 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- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF loWS. 147 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LAWS OF IOWA. 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. https://fraser.stlouisfed.org 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 ! https://fraser.stlouisfed.org 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, https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C https://fraser.stlouisfed.org 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). https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org 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 - • https://fraser.stlouisfed.org 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): • https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 / • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 - • https://fraser.stlouisfed.org 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 - • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 . . . ." • https://fraser.stlouisfed.org 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). • https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Last https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 • • https://fraser.stlouisfed.org 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. • • https://fraser.stlouisfed.org 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 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Table X. Value of karm Property in Iowa, 1850-1920.... https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. • https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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. https://fraser.stlouisfed.org 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 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Acts and Resolutions of the State of Iowa, 7th General Assembly, 1858. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 411116111101r OF BANK OBLIGATIONS IN IOWA, 1858-65 By Carter H. Goleabe https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A S-tialLjet-k2tA ()Of;e_ 2,1).Lfra' S F. AS-1 xo a 165 t 0200cDoo rct0000 apaeloo K52— I g5 I(V65 • EIgSc ig61 /& 59 gCoo 11- ;1 tlit ,, A-T-1 . 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