Page:History of Iowa From the Earliest Times to the Beginning of the Twentieth Century Volume 2.djvu/63

 organized and put in operation before the close of the second year, 1859. The branches were located at Muscatine, Dubuque, Keokuk, Mount Pleasant, Davenport, Iowa City, Des Moines, Oskaloosa, Lyons, Washington, Burlington and Fort Madison. The amount of paid-up capital was $460,450; the amount of currency issued, $563,836. Applications were pending for the establishment of four additional branches at the close of the year. The law under which the State Bank was authorized was so carefully framed that there seemed no opportunity for evading its salutary requirements. The system was popular with the people who desired a sound currency and security for deposits. No banks had been established under the “Free Banking Law,” because of its conservative requirements. There were many capitalists in the State, however, who wished a more liberal law under which they could establish banks. They came before the Eighth General Assembly and managed to convince a majority of its members that the Free Banking Law was too rigid and was keeping capital out of the State, which, under a more liberal law, would be sent here to establish banks and provide the people with an abundance of currency. The arguments were plausible and met with favor. R. G. Kellogg, of Decatur County, introduced a bill to amend the general banking law, permitting the organization of banks with a capital of $25,000 in towns of less than five hundred inhabitants and abolishing the office of Bank commissioners as provided by law. The bill was favorably received, with some amendments, passed both branches of the General Assembly. When sent to Governor Kirkwood for approval, he returned it with a veto. His objections were that it was unwise to dispense with Bank Commissioners, who were the special guardians of the depositors and bill holders, whose duty it was to make examinations of the condition of the banks to see that the laws were strictly complied with. He also regarded unfavorably the establishment of banks in small towns in-