Page:History of Iowa From the Earliest Times to the Beginning of the Twentieth Century Volume 1.djvu/515



“The Western Fire and Marine Insurance Company,” which proceeded to issue bank bills and put them in circulation in Iowa. Soon after Cook and Sargent, of Davenport, established a bank at Florence, issued bills and proceeded to put them in circulation from their Iowa banking houses at Davenport, Iowa City and Des Moines. B. F. Allen of Des Moines, established the “Bank of Nebraska,” putting its bills in circulation from his Iowa banking house. Greene and Weare of Cedar Rapids, had the Bank of Fontanelle in Nebraska, where they manufactured paper money for their Iowa customers. This firm had numerous banking houses in various Iowa towns from which the Fontanelle bank bills were put in circulation. Iowa City, Bentonsport and several other cities issued scrip, beautifully engraved, on bank note paper in the usual denominations, form and style of bank bills, which were paid out as money. The Western Stage Company and Burrows and Prettyman, merchants and produce dealers of Davenport, manufactured handsomely engraved promises to pay which circulated as money in the region where the proprietors were known.

Thus for about two years the people of Iowa had no choice but to take this worthless paper in place of money. It would not pay taxes, buy eastern exchange or enter government land, and would only pay debts or buy groceries, because money had disappeared and could only be purchased at a large premium. For a few months after the manufacture of these substitutes for money began, business temporarily revived; but as no one had confidence in this currency, everyone sought to exchange it at once for something that had real value or pay debts with it. No one dared to hold it. When the Nebraska banks began to fail the distress was widespread and every branch of business was paralyzed. In the newer frontier settlements the effects of the depression brought greater hardships. R. A. Smith, of Dickinson County, says: