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MINERS' BANK

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The Miners' Bank was chartered in 1836. Photo courtesy: Bob Reding
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MINERS' BANK. The first territorial bank in the future state of Iowa, the Miners Bank was chartered on November 30, 1836, and opened for business on October 31, 1837. It remained in business for twelve years, longer than any other bank of the time. (1)
Photo courtesy: Diane Harris
The Miners' Bank of Dubuque was chartered with a capital of $200,000 by the Wisconsin Territorial legislature. The subscribers were Ezekiel Lockwood, Francis Gehon, William Myers, E. M. Bissell, Robert D. Sherman, William W. Coriell John KING, Lucius Hart LANGWORTHY and Simon Clark; they were authorized to sell the stock. (2) Writing in the Annals of Iowa in 1870, Charles Negus stated that this bank, like many others, was started on "fictitious capital." Stockholders, instead of paying money for their stock, issued notes in their names. (3) Because it was believed that small notes would be easily counterfeited and encourage inflation, the bank was authorized to issue no bills smaller than $5. The bank was granted permission to issue notes when $100,000 had been deposited including $40,000 in coin.
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The Miners' Bank was in constant controversy until its closing in 1849. During one investigation by the Wisconsin legislature, it was discovered that half of the bank's capital came in bank notes issued by the notoriously risky Jackson County Bank and Bank of Manchester located in Michigan. Lax business practices and the end of specie payments on March 29,1841, resulted in the community losing further confidence in the bank.

Despite the purchase of the bank in June 1842, by the St. Louis Gas Light Company, the value of notes issued by the bank fell below forty cents on the dollar. (4) When the bank resumed redeeming its bills with specie on July 1, 1842 the demand was so great that in a week specie redemption was again halted. This caused the value of the bank notes to fall greatly below par. (5) The actions of the bank caused the Wisconsin Legislature, which met on the first Monday in December, 1842 to investigate its operation. A select committee of one person from each senatorial district for chosen. (6)

At this time, Richard F. Barrett, a wealthy man and large landowner in Iowa, and Thomas Marther, the president of the State Bank of Illinois, became interested in the bank. Other banks in Illinois had or would soon be closed and the men believed a Dubuque bank would be profitable. As they began buying up bank stock, the partners decided it would be wise of use their influence in preventing the legislature from repealing the bank's charter. (7)

Their agent, a man named Morbley, arrived in Iowa City with letters to several important members of the legislature. It is apparent that he did not pursue his influence peddling with much care because soon a rumor was heard that improper methods were being used to obtain a favorable legislative action on behalf of the bank. (8)

The investigation that was to have been concerned with the bank's operation became one of checking into political pressure. The result of the investigation showed that Morbley had come to Iowa City to sway the legislature to maintain the bank. One of the letters, written to James Morgan, the speaker of the house read in part:

         Dear Sir: The Dubuque bank charter is owned by the 
         Gas Light Company, in St. Louis, and I am in treaty 
         for it. If I get it, a company of us will put in from 
         fifty thousand to one hundred thousand dollars capital, 
         in specie, and we will make it one of the best banks in 
         the Union.  I see the charter is menaced; now, I ask 
         your kind offices in preventing its destruction, until 
         I can have time to consummate my arrangements. You know
         my attachment and interest at Burlington, and, if I 
         succeed, the institution can and shall throw benefit to 
         that city and the whole territory, and upon you, too, 
         individually, if an opportunity should offer. (9)

The letter to the other members of the legislature were similar although they did not offer any individual favor. Despite the letters and the questioning of the two partners, there was no positive proof of any attempt to bribe them. (10)

The committee then turned its attention to the bank and delivered two reports. The majority reported in favor of repealing the charter and closing down the bank. The minority report attempted to put as favorable light on the bank's actions as it could. The House voted to repeal the bank's charter, while friends of the bank in the senate delayed action until the legislature adjourned. (11)

Extremely rare large denomination notes.

An attempt by the Wisconsin legislature to revoke the bank's charter caused the resumption of specie payments on April 19, 1844. Even a change in management did not save the bank as the legislature on May 21, 1845, repealed the bank's charter. Negus remarked this was done despite the fact that the legislature owed the bank $5,500 plus interest for a loan it had made to complete the capitol. The loan had come due before the bank ended specie payments. That payment, according to Negus, with the specie on hand would have been enough to redeem all the notes the bank then had in circulation not in the hands of stockholders. (12)

Appeals filed by the bank were finally heard by the Iowa Supreme Court that upheld the loss of charter in July 1848. By this time the bank had closed its books and doors. (13)

During its operation, the Miners' Bank issued demand notes and post notes, payable at a future date. Despite the bank's poor reputation, no record exists of the bank ever defaulting on its currency. In 1901 the site of the Miners' Bank was used to build the GERMAN SAVINGS BANK.

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Source:

1. Oldt, Franklin T. History of Dubuque County, Iowa. http://www.ebooksread.com/authors-eng/franklin-t-oldt/history-of-dubuque-county-iowa-being-a-general-survey-of-dubuque-county-histor-tdl/page-8-history-of-dubuque-county-iowa-being-a-general-survey-of-dubuque-county-histor-tdl.shtml

2. Ibid.

3. Negus, Charles. "The Early History of Iowa," Annals of Iowa. Davenport: Griggs, Watson & Day, Printers. July 1870, p. 207

4. Oldt, Franklin T. and Patrick J, Quigley. The History of Dubuque County, Iowa Chicago: Goodspeed Historical Association, 1890, p. 72

5. Negus, p. 207

6. Ibid., p. 208

7. Ibid.

8. Ibid., p. 209

9. Ibid., p. 210

10. Ibid.

11. Ibid., p. 211

12. Ibid., p. 216

13. Oldt.