Iowa Constitution and Banks

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Time Frame: 1846

A re-enactment features delegates to the constitutional convention in 1846 debating the worth and role of banks.
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“The Path to Statehood,” The Iowa Heritage: Program # 3, Iowa Public Television, 1978.

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Transcript

Gentlemen the future state of Iowa needs banks if she is to prosper. There is a simple reason for this. Here is a sack of silver coins in the amount of $100. Indeed, an impressive site. It is equally impressive to the many robbers who roam our highways.

(laughing)

(banging of a mallet.)

We are all amused by your show, Sir. But the Chair would appreciate it if you would get to the point.

I beg thee pardon of this Honored Assembly, but a moment please. Let me direct your attention to this pile of paper. It too represents the amount of $100. It was issued in another state, perfectly legal, a person simply goes into a bank and trades these coins for these notes. At anytime he wishes, he simply trades these notes back for the coins. And what does he pay for this convenience? Nothing. Without banks, we have to use this to pay our debts, to send money to needy relatives back East, even to buy groceries. With banks, we use this. The convenience is obvious.

If you please Mr. Chairman, my fellow Delegate fails to take notice of an important point. I also hold in my hand notes representing $100. Let me demonstrate their great worth.

(ripping paper and gasping)

This bank failed to back up its notes with sufficient funds. I further state this is not an unusually occurrence. You can imagine how you would have felt if you had to take your $100 notes into this bank and were told oh, oh so politely that they had conveniently given your money to someone else and they had none left. Bankers and banking are a curse on mankind. The people of Iowa deserve gold and silver in their pockets, not worthless paper.

A majority of delegates agreed that banks were a curse on mankind and voted to outlaw banks in the state of Iowa. This law would be changed later, in 1857.

 


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