USA > Iowa > Johnson County > Leading Events in Johnson County, Iowa, History > Part 38
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HISTORY OF JOHNSON COUNTY, IOWA
and for a quarter of a century he was said to have been far above the average man in business enterprises.
However, it was as a banker that he was best known, and from the days before the war until a few months before his death he was best known as a banker. He was one of the organizers of the Iowa State Bank, the parent of many strong banks, and he was president of the Iowa City branch of this institution. He also became in turn president of the Iowa City National Bank, Clark and Hill's Bank, and the Iowa City State Bank, and was at one time connected with a Second National bank of Iowa City. In this relation a story is told showing his determination and sense of honor at a cost of sacrifice if necessary. It was during the great panic of 1873 that banks over the country were closing their doors against the pressure of institutions above, and while Mr. Clark was lying with a broken limb news came to him of the danger to the banks of the city and county and that there was some in- tention of closing the doors of his own institution. When he heard this report his determination to be present himself could uot be resisted, and he declared that it should not close while he lived, and under his orders he was carried to his bank, where, suffering as he was, he remained all day or until the danger had passed. His bank did not close and other bankers did not hesitate to follow his example, so that no bank went down in the storm which threatened to cause a panic in local affairs.
· Mr. Clark was of the greatest service to Governor Kirkwood when the demand on the financiers of the state was most pressing. Great sums of money were needed, and he appealed to his brother-in-law for advice and assistance, to whom he owed, as he afterwards was heard to say, "much more than he could estimate."
In addition to the local interest in the undertakings of this man, the statement is made that he was really the originator of the "greenback" currency which had its first issue during the Civil War. It happened, according to the account of the time, in this way: "One night long ago he awakened at his hotel in New York City, and springing up, paced the floor until dawn, his mind filled with a great idea. Then, after conversa- tion with his associate on the trip, the representative of the
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THE BANKS OF THE COUNTY
governor of Indiana, as Mr. Clark was the representative of Governor Kirkwood, he went to Secretary Salmon P. Chase, before whom he laid his plans." It is declared that the cabinet officer adopted the idea and from this suggestion the green- back was issued.
Later in the life of Mr. Clark he was sent to the senate of the state, although he never was an office seeker, preferring the life of business to a life of politics, or he might have been chosen to higher offices.
The Johnson County Savings Bank was organized in Iowa City on the 24th day of August, 1872, with a capital stock of $125,000. At the first meeting of the stockholders, Thos. C. Carson acted as chairman and the following board of trustees was elected: Samuel J. Kirkwood, P. P. Freeman, Theo. Sanxay, Thos. C. Carson, James O'Hanlon, Thos. Hill, F. P. Brosshart, P. M. Musser, Moses Bloom, E. Clark, George Pow- ell, J. E. Lee, C. D. Close. Immediately following this meeting the board of trustees held a meeting and elected Samuel J. Kirkwood president, and Theo. Sanxay as cashier.
The bank was located in the directors' room of the old bank - facing toward Washington street. The Iowa City National was located in the banking building of the Johnson County Savings Bank recently removed. The two banks remained in this position until the Iowa City National Bank closed and then the Savings Bank took possession of the building.
Samuel J. Kirkwood acted as president of the bank from the date of organization, August 3, 1872, until January 3, 1877. Thomas C. Carson was elected in 1877 and retained the office until his death on October 18, 1905. William A. Fry, who has long been associated with the bank, was chosen to take his place and held this office until succeeded by Walter M. Davis in 1911. -
George Falk is the present cashier, J. A. Shalla being his assistant. William A. Fry filled that position before him. Mr. Fry took the place of R. R. Spencer, while J. C. Rutan filled the place vacated by Theo. Sanxay, who was elected cashier at the first meeting. The vice-presidents in their order have been - Theo. Sanxay, C. D. Close, Moses Bloom, Thos. C. Carson, Samuel F. Lefevre, James C. Cochran, and M. J. Moon, who was recently succeeded by John T. Jones.
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From the date of the organization of the bank the capital stock has always been $125,000, but the deposits and surplus have been increasing regularly. In 1893, when the charter of the bank expired, the surplus of the bank, which amounted to about $25,000 was distributed but the capital was retained and a new charter secured. The deposits of the bank have in- creased to $2,026,494 at the present time. When the new charter was secured in 1893 there was no surplus, but at the present time there is $171,550 in surplus and undivided profits. The value of real property owned by the bank is given as $74,000.
The Citizens Savings and Trust Company has been doing a regular commercial banking business in Iowa City since 1891, but was located in this city as a loan and trust company many years before that time.
The company was formed in 1882 in Iowa City, but the con- cern did not commence business until January, 1883. At that time the Citizens Savings and Trust Company had a capital of $25,000 and was managed by the following residents - E. Clark, Chas. T. Ransom, Moses Bloom, W. A. Purdy, and L. H. Jackson. Mr. Ransom acted as the president and Mr. Jackson as secretary. All of these men are now dead, with possibly one exception. The concern was then operated as a trust company in the Opera House block in connection with the State Bank. Loans were placed in every part of the state and the bank was well and favorably known.
The present era of the bank opened on July first, 1891, when the bank moved into its quarters on Clinton street, recently vacated for the new location on the corner of Dubuque and College streets, where it started a regular commercial business. The capital was increased to $50,000, by taking the necessary amount from the undivided profits, on September 24, 1897.
Following the presidency of Mr. Ransom, A. E. Swisher was elected as president of the bank, but he relinquished the office in 1901, when George W. Lewis was elected to succeed him, who continued in office until his death in 1904. George W. Koontz was then elected to fill the vacancy and Judge O. A. Byington is now in that office, while F. E. Ayers is the vice- president. Before being elected president, Mr. Koontz was the cashier of the bank, having held that position from 1888. J. E.
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THE BANKS OF THE COUNTY
Switzer was the assistant cashier during that time and now is the cashier of the institution, and D. A. Reese his assistant. According to the last statement of this bank, its deposits are $475,000, its surplus $13,000, the value of its real property $6,000.359
In 1891 the Oxford State Bank was organized, which ap- pears to have grown out of the old private bank of L. Line- barger and Son, which was in operation only a few years. The present bank has a capital of $25,000, which has remained the same during its history. The officers concerned before the present organization were, L. Linebarger, president; Fred Rapp, vice-president; H. N. Linebarger, cashier. Among those who were at one time directors are the names of L. R. Wolfe and E. K. Linkhart. All of those originally connected with the bank are now dead or removed from the vicinity excepting the last named.
James W. Ward is now the president; M. Ackerman, vice- president; L. Karstens, cashier; and O. L. Karstens, assistant cashier. A noticeable feature of this bank is its postal tele- graph cable service directly from the bank, which is made pos- sible because the cashier was formerly an experienced operator in the telegraph service at Homestead, Iowa. For eighteen years the service has been maintained for the accommodation of the stock market and shippers.
January 2, 1911, the bank statement included the capital as mentioned of $25,000, and deposits of approximately $278,000, with real estate valued at $7,800, and surplus of $27,000.360
The Farmers Savings Bank of Oxford began business in 1895, with J. H. Rohret as president; Albert Yenter, vice- president; and P. R. Ford, cashier. In 1908 it was consolidated with the Security Bank, and its capital increased from $15,000 to $20,000, which it is at present. The officers at the time of the last statement, January 21, 1911, were A. P. Rohret, president; the vice-president the same as at the beginning; and B. G. Rohret, cashier, with E. J. Saxton, assistant cashier. Its de- posits are $278,500, with a surplus of $7,800, while its real estate is estimated at $3,200.
The Tiffin Savings Bank commenced business August 1, 1903, the stockholders being composed of wealthy farmers re. siding in that vicinity. The bank has never lost any money in
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HISTORY OF JOHNSON COUNTY, IOWA
loans since its organization. Its capital is $12,000, it has a surplus of $10,000, and undivided profits of $1,500. The de- posits in December, 1910, were $136,000, while the real estate and personal property were valued at $4,000. E. F. Hamilton is the president; J. A. Colony, vice president; and P. R. Ford, cashier.361
The Farmers and Merchants Savings Bank of Lone Tree was established in 1901 with a capital of $20,000. The first officials were: president, John A. Goetz, who has remained in this office since that date; vice-president, Anton Fisher, now chairman of the board of supervisors; cashier, Chas. A. Fern- strom; directors, the president, August Kranz, Wm. Kelso, A. Rubelman, J. A. Lutz, W. H. Younkin.
In June, 1909, Geo. A. Fernstrom, who had become the cash- ier, resigned and he was succeeded by T. H. Ashton, who holds the position at the present time. The directors at the present time are, J. A. Goetz, Anton Fisher, Joseph Rayner, H. P. Loring, A. Rubelman, Chas, Kruger, and John Hudachek. Wm. Rabbas is the chief bookkeeper.
A comparative statement issued by the bank gives some sug- gestions concerning its growth. This was at the close of bus- iness on Nov. 10, 1910:
May 18, 1909, deposits $148,000
Nov. 3, 1909, deposits. 160,000
Feb. 16, 1910, deposits. 175,000
Nov. 10, 1910, deposits. 211,000
From a recent statement of the bank, made on February 14, 1911, the following figures are taken: Value of real and per- sonal property, $4,000; capital, $20,000; deposits, $222,000; sur- plus and profits, $13,000.
In April, 1891, the following persons, after deciding that it was necessary to the welfare of the town of Lone Tree to have a financial institution, filed articles of incorporation for the Lone Tree Savings Bank : A. W. Leonard, John Burr, A. H. Brown, John Ogelvee, J. M. Lee, Andrew Rubelman, and John Goetz. Mr. Brown and Mr. Ogelvee are now dead. The capital stock was, at incorporation, $10,000, but it failed to meet the requirements of the community and was soon raised to $20,000. The bank opened for business in September of the year 1891
· with Chas. Fernstrom as cashier, and he filled this position
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THE BANKS OF THE COUNTY
for ten years, when he was succeeded by D. Bestor. Mr. Bestor was cashier for about a year and a half and was succeeded at. his death by the present incumbent, H. C. Buell. The business has been very successful, the stockholders receiving an annual dividend each year of eight per cent and a surplus fund of $20,000, or an amount equal to the capital stock, has been ac- cumulated. During the time that H. C. Buell has been cashier of the bank the deposits have increased from $75,000 to $280,- 000. The present president is Joseph Walker, and vice-presi- dent, H. C. Hinkley. Recently the bank has improved the looks of its building by putting in a new and up to date front. In the twenty years of its existence it has aided many farmers to make money by supplying them with the necessary funds to carry on their business.302
The Savings Bank at Hills was organized in January, 1907, with John A. Goetz as president; John McCollister, vice-presi- dent; Joe Walker, cashier; and C. A. Walker, assistant cashier .. It has a capital of $10,000, and a surplus of $2,200. The de- posits reach the sum of $72,000.
In 1904 the North Liberty Savings Bank was established, with R. H. Wray as president; J. W. Schoelman, vice-presi- dent; and S. E. Lehnen, cashier. It also has a capital of $10,000, a surplus of profits of $2,200, the deposits some time ago being $60,000.
The only bank in Solon is managed by Ulch Brothers, and is known as Ulch Brothers' Bank. Its capital at organization in 1896 was fixed at $20,000. It now has a surplus of $15,000, and deposits at the close of 1910 of approximately $150,000 .. George Ulch is the president; J. S. Ulch, cashier; and W. H. Buchanan, assistant cashier.
The last bank to be established in Johnson county is the Commercial Savings Bank of Iowa City, authorized by the Auditor of State to commence business on February 9, 1911, but owing, however, to delays, actual business did not begin until March 1, 1911. Its capital is $50,000, and deposits on April 6 were given in approximate figures as $100,000.
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CHAPTER XXVIII
Railroad Bonds - Public Utilities - Comparing of Industries
B EFORE the time of banks in this part of the country the re- sources of the community were practically mortgaged for some time to come in order to secure the means of transporta- tion so much desired. It is not possible to cover the "bond his- tory" in a few pages, and what follows is merely suggestive of the larger topic that is worthy of further study.
September 1, 1853, Johnson county voted $50,000 in bonds in aid of the M. & M. railway, payable twenty years from date of issue, interest semi-annually, and at seven per cent. These bonds, like others issued subsequently, gave the county supervisors so much annoyance that they appointed a special committee in 1861 to investigate the entire matter. Their re- ports cover many pages and in general the one who wishes information in detail must find it from the references given in the original reports. The interest on these bonds was paid regularly up to the time the committee reported, on February 1, 1861. The county at the time of issuing them received in certificates of stock 500 shares of one hundred dollars each, or an equivalent of the bonds in face value, and during the first seven years received also stock for the interest in part, amount- ing to the sum of $1,343, before any dividend was paid. No litigation, according to the report (1861), had grown out of the transaction with this company, and this was the only company that had even built a road or part of a road in the county. No revenue had been returned to the county, however, beyond one dividend of four per cent.
The committee to whom had been assigned the whole topic of "railroads," reported further that in December of the same year, 1853, the county had voted $50,000 in bonds to aid the Lyons Iowa Central road. These were issued on the same plan as the previous issue in September, 1853. All these bonds in
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1361 were in existence and in the hands of third parties, called in law innocent purchasers, while not any part of the road had been completed. The interest on these bonds had not been paid, because, as it was said, of the bad faith of the company.
Since the interest had not been paid numerous suits at law were pending against the county for the collection of the amounts due. One judgment for $5,000 had then been obtained against the county in an appeal to the Supreme Court, and a mandamus had been issued for the levy of a two mill tax based on the assessment of 1858, which then (1861) had been par- tially collected and paid on the judgment. This was the judg- ment obtained by Paul B. Ring and later assigned to other parties by him, so there seemed no way to escape payment. Another small judgment against the county was to be satisfied. out of the levy for the Ring judgment. Suits were then pend- ing in the district and supreme courts on the bond cases.
In reviewing the entire matter the committee suggested that these bonds might be bought up for twenty-five to forty cents on the dollar and it might be wise to buy them if possible. Time. was necessary in order to determine the liability of the county on the subject. $175,000 had been voted to the Iowa Union Railroad by the people in 1857, for which, according to this re- port, only $3,500 in bonds had been issued, one-half of which had been paid and certificates of indebtedness issued for the re- mainder. No part of this road had ever been built, and the committee were unable to decide whether the indebtedness was valid or not. Fifty thousand dollars in stock was also voted at the same time in aid of the Great Western, but no bonds were ever issued and hence there was no liability.363 The attorneys for Johnson county, Edmonds and Ransom, offered a com- munication on the status of affairs at the time the above com- mittee made its report, which communication throws some further light on the situation, although later developments indicate that the question was far from a settlement. Hamilton P. Dox, to whom the judgment obtained by Ring had been as- signed, secured the mandamus for a three mill levy. The court changed the levy to two mills, from which decision Dox ap- pealed. This case was submitted to the Supreme Court for adjustment and was pending in 1861. This was the beginning of a litigation that continued for more than ten years.
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Before the board of supervisors adjourned this session they authorized the committee to employ some suitable person to meet with committees from boards of supervisors of other counties, namely, Scott, Muscatine, Washington, Iowa, and Poweshiek, with a view to finding out the actual ownership of these counties in the M. & M. road and whether the eastern stockholders had paid in their proportion of stock as required by the charter, and whether these stockholders had a legal title to what stock they held. They were also instructed to appoint some suitable agent to represent the interest of Johnson county at the meeting of the stockholders. Abel Beach was sent as a delegate to the meeting mentioned above and his expenses were paid by the county to the amount of $21, adding one more item to the "aid of railroads." 364
The transfer of the M. & M. railway line, so far as construct- ed, which took place under foreclosure of mortgage, led to a valuation being placed upon the stock of the company. Thos. Hill held a hundred dollar's worth of stock in the M. & M., and the Rock Island was to pay the M. & M. company sixteen cents on the dollar for the stock as originally held. Accordingly Mr. Hill sent in his stock, expecting sixteen dollars in cash. However, instead of good money he received a certificate en- titling him to sixteen dollars in some new stock provided the costs attending the sale and transfer did not exceed the amount allowed for such expense. In order to test the value of his stock Mr. Hill offered his one hundred dollar's worth for one dollar, and at such offer it found no takers. The only satis- faction that seemed to be taken from the transaction was that "the amount of the worthless stuff was largely reduced." The Rock Island paid for the line of the M. & M. as it was bid in at the sale $2,100,000.365
When the decision of the United States Supreme Court re- versed the decision of the lower federal court, and the State Supreme Court on the bond question they stood four to five, and while some felt that more fight must be made, probably most of the taxpayers felt that the last authority had been reached. The decision was made in the case of the bonds voted to the M. & M. road, which would doubtless be a precedent for another case. There was, however, a plan by which new bonds could be issued in place of those already due, or which were
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defaulted on account of interest. This, it was said, presented a new phase of the bond question, bringing it back to the issue between the original parties. "If," as the decision held, "the · guarantee by the railroad company was good, and the holders recover from it they could not recover also from the counties. Then the company might claim payment, in which case the people could set up any defense that would be good against the company, since then the bonds would no longer be in the hands of an innocent purchaser. This would bring the question into the Iowa courts, since the M. & M. was an Iowa concern and its troubles would need to be adjusted here. Under this decision the counties might not fare so badly if the property was worth the bonds, for in the case of the M. & M. road, stock for the bonds voted was issued dollar for dollar with the understand- ing that the proceeds and earnings should be paid to the coun- ties to meet the interest on the bonds. This was called the consideration for the issue, instead of the benefits to the people. The M. & M., however, never kept this agreement.
The record of "bond juggling" is too long to be included here, since the subject needs a volume, but in enforcing the orders of the courts, the executive arm of the government was necessary. It was on Monday morning, May 10, 1869, when the county board of supervisors and city council left the city to comply with the orders of the United States Court, then in session at Des Moines. They were compelled, it seems from the account, to pay their own expenses, because the attorney for the bond holders had opposed such payment by any other means by injunction. There was ample opportunity for such bodies to pay their expenses by resolution had the injunction not been ordered, and this the supervisors did at the June ses- sion following, to the amount of $700. They were sent home from the federal court with instructions to levy the tax to apply on the bonds due.
Attempts were made during 1868 to compromise with the bond holders, and the supervisors appointed a committee of three for that purpose, who did arrange to take up $51,000 in bonds for $28,000. However, through some reaction on the part of the board of supervisors this was not consummated at the time. These were said to be the "Lyons bonds," so called from the line of road for which they were issued, and they were not
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due until 1873, since they ran twenty years from 1853.386 In the extremities of the time, however, the general assembly of the state was petitioned for relief during the session of 1870. The particular relief asked for was to prevent by law any levy for the payment of such bonds. Conventions were held to re- sist any further payment and until action on the part of all the counties concerned was urged. This failed to furnish any permanent relief, for the county officers were finally compelled to levy the tax or suffer the extreme penalty provided. The decisions of the federal court in the opinions of Judges Dillon and Love, declared the law of "remission of penalty" void and the United States marshal was ordered to levy the tax when officers refused.367
It was estimated in 1868 after the federal court had issued its ultimatum, that the amount of outstanding bonds with ac- cumulated interest in Johnson county alone amounted to $300,000. It must be remembered that many counties were concerned, and in concluding it may be proper to say that suit was first commenced against Cedar county, which case was carried to the Supreme Court of the state, which declared two to one that the bonds were valid. This was the old Supreme Court. Another suit was brought against Johnson county, which was also carried up and the validity sustained. Then the new court, as now constituted, reversed all these decisions, and unanimously declared all the bonds void. After this suits were brought in the United States Circuit Court which sustained the validity of the bonds, and this court also ordered payment. On this occurring the state courts enjoined the payment. Then it was that the cases were carried to the United States Supreme Court and the latter court ordered the United States Circuit Court to issue writ of mandamus for the payment. One court ordered the levy and another court ordered not to levy.
However, other improvements were now under considera- tion. The demand for a lighting plant for Iowa City was met in 1857 by the organization of the Iowa City Gas Light Company. Chet Weed, of Cincinnati, Ohio, was the principal promoter. It was necessary to haul the machinery overland from Muscatine, to which point it had been shipped by water. The old plant continued in use, with a number of additions, until the present one was installed in 1903. The present works are modern in
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