XI

DIRECTOR OF THE STATE BANK OF IOWA

FOR the first time since December, 1856, Mr. Kirkwood was now free to give his thoughts and energies, without much serious interruption, to his private business affairs. It is true that he was still chairman of the Republican State Central Committee, and that he made at least one political speech at Cedar Rapids on August 6th.154 But the rivalry was not so intense in the campaign of this year, when there was no Governor to be chosen, and thus partisan needs made fewer demands upon his time.

The prosperity which had attended the enterprises of Clark and Kirkwood during the three years since the arrival of the junior partner enabled both men to take advantage of a new opportunity which was offered to persons of means during the summer of 1858. One of the most important acts of the Seventh General Assembly was the law establishing the State Bank of Iowa-a law which contained many provisions introduced by Senator Kirkwood for the purpose of placing the institution upon a firm basis.

This new measure was hailed with great satisfaction, especially by the business men of the State, for the financial situation in Iowa was desperate. During the years of the Territorial period the people had passed through a bitter experience with the numerous "wild-cat" banks which flooded the West with worthless notes. As a result, the Constitution of 1846, under which Iowa was admitted into the Union, contained a provision absolutely prohibiting banks of issue; and the legislature hastened to impose penalties for violations. But as the years went by sentiment gradually changed. Thousands of people came into the State from Ohio, Indiana, and other Commonwealths where wisely guarded banking institutions enjoyed a deserved public confidence. Besides, it was not long until many of those who had been most emphatically opposed to banks of issue came to realize that the constitutional prohibition was working hardship to the business interests of the State. Circulating medium became very scarce, and much of it, consisting of notes of local banks in other States, was almost "on a par with the forest leaves of autumn" during the panic of 1857. "In those days in Iowa the two most important books that every business man needed were a Bible and a counterfeit detector. And of these two, the detector seemed to be the most important for at least six days out of the seven" 155

Thus it was that, "acting on the belief entertained by business men generally, that one effect of the creation of banks of issue in our own State, would be to drive out of its borders all this miscellaneous hodge-podge called money", the restriction upon banking institutions was removed when the new Constitution of 1857 was drafted and adopted. The legislature was given power to pass a general banking law and also to create a State Bank, but such laws were not to go into effect until ratified by a vote of the people.156

Popular approval was readily accorded the law of the Seventh General Assembly creating the State Bank of Iowa, which was to consist of as many branches, not exceeding thirty, as were organized and qualified in compliance with the requirements of the law. The State Bank itself was merely the central governing body, with an office at Iowa City, which passed regulations for the conduct of the branches and supplied the branches with the circulating medium in the form of bank notes which the institution was authorized to issue. Commissioners were appointed for the purpose of inaugurating the plan, after which full authority was vested in a Board of Directors consisting of one representative from each branch bank and three persons elected by the General Assembly.157

At Iowa City, as in the other principal towns

of the State, persons with money to invest only awaited the adoption of the law by the people to launch out on the new enterprise. On August 11th there appeared in a newspaper a public notice, signed by Samuel J. Kirkwood and ten other men, announcing that they had associated together for the purpose of establishing in Iowa City a branch of the State Bank, and that the book for subscriptions to the capital stock would be opened on September first at the law office of Edmonds and Ransom.158 Subscribers needed no urging and in a short time a sufficient amount of stock was taken. Kirkwood was the largest stockholder, having seventy-six shares, purchased at one hundred dollars a share. On September 16th the stockholders met and selected Samuel J. Kirkwood, John Powell, Edward Connelly, E. Shepherd, C. T. Ransom, Kimball Porter, and Theodore Sanxay as Directors of the Iowa City Branch of the State Bank of Iowa.159

Soon afterward Kirkwood was chosen to represent the Iowa City branch as a member of the general Board of Directors of the State Bank. At the first meeting of the board, on October 27, 1858, he was made president pro tempore and served in that capacity until Mr. Chester Weed was elected permanent president. Subsequently he became a member of the executive committee, as well as of various special committees of the

board. The records indicate that he performed his full share of the duties of a director until his resignation in the summer of 1859.160 To him, therefore, is due some credit for helping to establish an institution which for about seven years "served its day to good purpose and performed in good faith all its promises.''161

In the meantime Clark and Kirkwood sold their store in Iowa City to Thomas J. Cox who, it was announced, would "continue doing business at the old stand but in his own name and on his own account."162 By this time, however, Kirkwood had become thoroughly identified with the business interests of the town. Late in October his name appeared at the head of a list of the members of a "general committee" of citizens whose function was the promotion of manufacturing in Iowa City.163

He was also a delegate to a State Railroad Convention held at Iowa City on December first. As a member of a committee of this convention he signed a minority report which declared that the credit of the State could not be loaned to railroad companies without a change in the Constitution. Failing in this manner to impress the delegates with the desirability of caution, he later proposed an amendment to the majority report to the effect that if the policy of State aid to railroads should be adopted then the State should assume