Daily Democrat and news. [volume] (Davenport, Iowa) 1859-1864, 1862-01-14
The Effect Of the suspension on the Ban l
Of the state.


gard to banks at the time Of the adop'
ton of the constitution OF our state Was
such that all power to enact, altc'' o'
amend laws with reference to the s"o)e'
is reserved by that instrument 70 me
people themselves. Section Ss'' As''0'
of the constitution Of the state declares
that no act OF the General Assembly,
authorizing or creating corporations OF
ossoc,a,;ons with banking powers, nor
a,o.ndments thereto, shall take etiecLor
in any manner be in force until the same
.ball have been submitted separately to
he peopc. at general or special eiec-
ton. As provided by law, to be held not
,oss than three months after the passage
., the &c, and shall have Teen approved
~ majority ofthe electors, DC. Sec
,,on II. the same article, declares that
the suspension Of specie payment by
banking institutions shall never be per
mitted or sanctioned.
By the act OF the Assembly author
izine the establishment OF State bank,
the branches of the State Bank are Tor
hidden to pay out notes OF non specie
payinp banks. As consequence OF
these stringent cnactons the bank OF the
State OF Iowa must continue TO be
specie paying institution, unit! the Peo-
pie. by an amendment to the Constitn-
lion. authorize different course. In
Ordinary times such regulation would
no one with which the bank would not
find il d flicult to comply. BY apruden'
AMI iudicious management, the bank
woud be enabled to obtain circulation
which could he redeemed at short notice
in gold or silver, and which would be
sufficient to enable it to do q remunera'
five business. 1t was the intention OF
the trainers of orr banking law to ena'
tie The State Bank to control the clrcu.
la,;on OF our State, and at the same
lime to throw such safeguards around !
as would ctiectually prevent loss to tn
nublic from depreciation OF ITS bus
and We have no hesitation in saying ina
thus far our State Bank has accomplish
cd tho object intended. It's issues have
never been at a discount, and even y
m
neghboring States its notes nave uee'
son,ht ater with an eagerness ina
abunlantly tes,siied to their unquestlon
able value. They have been and ar
now Gas good as gold.'
But we are gravely sollcitous OF IN
ctr.ct Of the recent suspension OF VI
eastern banks upon the prosperity OF on
hanks. We do not for a moment lea
that the banks will at any time be un'
Die to redeem every dollar OF their CT
cuIa,ion in specie when presented
their counters. Indeed with the chec
imposed upon them it would DC 'mp0s'
HE for them to do otherwise. But '
da no, fear that their usefulness Will
greatly abridged by the isolated pos'ti'
in which they are compelled by u
forms of their charter to ''"-"'
fiscal operations of the seVetai ''"'
os;n, tho I MON. arn-oeeine BAN
80 STATE, must operate either d''eo
ly or indirectly rpon ~ STATUS OF u
banks of LAY other State.
The chief cause of the recent susper
sion was the abllty:anl intention man
tested by the country banks to withdra,
their balances in specie. Fearing a dc
pletion, the city banks stopped speci
payment, and with it the corsia ant flu
and reflux of gold to and from the grea
commercial center. The example Of til
New York city banks was followed b
other banks whose charter permitte
such a course. We greatly tear that
will be next to impossible for our bank
verse circumstances, which will cnabl
them to carry on remuncrativc bus
ness. They contend under circumstance
of too much inequality with the no
specie paying banks, and for ourselve:
We hesitate not moment in saying tina
some measures ought to be at one
taken for their succor. We are not wis
enough to suggest plan of relief, bu
unless the people of the State shall 500
come to the aid Of our banks land thei
conduct hitherto has rendered them OF
thy OF such conrse,) they must of nc
cesslty either abandon their charters O
degenerate into incorporated brokerag
Offices, the object OF which shall be Nc
to give the people responsible currenc
but to manufacture dividends for the
stockholders.
TIE conduct OF Congress in the ex
isiins emergency must be bad indeed
since SO much OF republican paper a
the New York World rebnkcs it. "Con
gress, says that print, "Las spent to,
long time already IN III &u a,