1849 – Iowa Dollars To Doughnuts.

There’s an old expression that came into existence around the country in the mid-1800’s…

Dollars To Doughnuts. So, what’s it mean?

The idea behind this shorthand phrase – dollars to doughnuts – is the sentiment that the speaker is so certain and confident that he/she is right about something, they will put forth their dollars against the listener’s doughnuts in a wager, with the dollars having much higher value than the doughnuts.

Well, in all truthfulness, when we go back to the earliest days of Iowa’s existence – 1838 into the early 1850’s – most people living here might actually prefer a plate of doughnuts over some of the “dollars” that were circulating around the Hawkeye State! Here’s what one Iowa historian – Howard Preston – reported about banking conditions in Iowa during our earliest years…

You see, when Iowa became a U.S. Territory (1838) and then, as we became a U.S. State (1846), the banking system across America was in a true mess. The Whig Party supported a strong central banking system – based on the gold standard and run by the U.S. Government, while the Democrats – led by President Andrew Jackson – believed the U.S. banking system to be corrupt, needing to be reduced in size and power. In the process, individual states were given the right to basically govern their own banking systems – so by 1846, when Iowa became a state, each of the other twenty-eight U.S. states had their own set of banking standards – leaving Iowa – which was being flooded with pioneers coming west from these states – in a mess. Truthfully, most of these new settlers were poor in the first place, and what money they did bring with them was currency that was good only back home! Combine that with the fact that gold or silver – which was rare – was the only national “currency” accepted everywhere, and it became very difficult for the average Iowan to easily buy or sell in these uncertain conditions.

Here, historian Howard Preston continues…

Making matters worse, in 1846, the Democrats here in Iowa – in the absence of a strong central banking system across the U.S. – had pretty much taken control of Iowa politics. So when our first State Constitution was written, it actually outlawed privatized banks, as we know them today, across Iowa! As you can see from the reports above, the anti-bank fever ran fairly high, causing chaos for those pioneers across the state who needed the services of a local bank. Which brings us now to…

(JP-080) This rare postal cover & letter was written on December 13, 1849 by **Benjamin P. Shawhan – Treasurer of Keokuk County, Iowa**, postmarked in **Lancaster, Iowa** on **December 14th**, and addressed to the **Iowa State Treasurer – Morgan Reno** at the state capital in **Iowa City**.

As you can see from this short note from the Keokuk County Treasurer – Benjamin P. Shawhan, there is much concern on how he, as the county treasurer, can “cash in” the variety of currency and coins he has in his possession. In the absence of local banks, I’m certain that these type of requests to the state treasurer were quite common. So, as we unpack Shawhan’s letter (below), we’ll give you more details…

Lancaster – December 13^th 1849.

**Benjamin P. Shawhan** was born in 1814 in Kentucky, and with his wife – Maria Ann Lowe (a Virginia native) – and family, moved to **Keokuk County, Iowa** in **1845**. As you can see from the maps (above & below) – **Lancaster** is located in Lancaster Township which is in the southern-central portion of **Keokuk County**. The county was first formed in 1837, named for the brave chief of the Sac Tribe, but didn’t open up for public settlement until May 1843 – only three years before Iowa became a state. Keokuk County’s governing structure was created the following year – 1844 – but today’s county seat – Sigourney – was not designated until 1856. Obviously, Lancaster – in 1849 – was the center of Keokuk County government, and Benjamin P. Shawhan was appointed as county treasurer.

Sir – Mr. Morgan Reno.

**Morgan Reno** was born in 1816 in Pennsylvania and was one of Iowa City’s earliest pioneers (1842), coming first to Burlington in 1839, and serving as the Iowa Territorial Treasurer from 1840-1846 as well as the Librarian of Iowa Territory Offices from 1841-1846. In 1843, Reno married Margaret A. Hammer – who had moved with her family to Burlington in 1839. In 1846, when Iowa became the 29^th State, Reno continued on as the State Treasurer, serving here in Iowa City between 1846-1850. In 1857, Reno became mayor of Iowa City – serving one year, and the 1860 U.S. Census (above) shows Morgan, his wife Margaret, and two children – Charles & Flora – living in Iowa City. When the Civil War broke out, Reno served as 1st Lieutenant & Commissary in the 6th Calvary from 1862-1865. Interestingly, Morgan’s son, Charles (C.M.), served five terms as mayor of Iowa City, from 1884 to 1885, 1889 to 1892, and again in 1895 to 1896!

Treasurer of State. Sir. Please to inform me by the next mail whether or not you will take anything but Gold and Silver for State Revenue – and if you will take any Current Bank paper. Please to inform me.

In absence of local banks here in Iowa, the State set up land offices where a limited offering of “banking” services were available for those who could afford such luxuries. This setup left the average Iowa pioneer in a real quandary with the availability of cash – coins or bills – very restricted. And with so many different sources for coinage and bank notes, the variety was nearly unlimited. Again, historian Preston tells us more (above & below).

Also I wish to know how much you will take a five franc piece at.

Treasurer Shawhan had at least one French five franc coin in his possession – and yup, Mr. State Treasurer – how much credit will this coin be worth?

And by answering me, you will much oblige. Yours &c (etc.)…

Benj P. Shawhan – Treasurer & Col. (Collections) – K.C.L. (Keokuk County – Lancaster)

Obviously Mr. Shawhan needs a speedy answer from Iowa City. It could be that it being mid-December, the amount due to the State Treasurer had to be paid by year’s end. We’ll never know for sure, but, fortunately, we do have a record of how Treasurer Morgan Reno responded. Keep reading…

Today in Old Capitol, the Iowa State Treasurer’s office has been recreated. Here (above & below) are photographs of what Treasurer Morgan Reno’s office might have looked like in 1849. Click here to read more.

The State Treasurer’s job was to manage money, and tools of his trade can be seen in this office. Income came to the treasurer’s office from three main sources: taxes, files, and the sale of public land. The treasurer, who was also responsible for advertising and selling public land, reported to the Legislative Assembly and the auditor.

On the back side of our letter, we find these notes – as recorded by State Treasurer Morgan Reno…

From B.P. Shawhan – Dec 13 1849 – this notes the letter’s author & the date it was written.

Ansd 18 Dec 1849 – this is when our letter was received and answered.

Will receive good bank paper – Reno reports that he will take for payment any good currency except…

Cincinnati, Massillon & other Independent Ohio bank paper not recd. – obviously these Ohio currencies were not reliable.

Missouri, Marion & (not too legible here) not recd. – apparently bank notes from Missouri, Marion and one other company weren’t worth the paper they were printed on!

Francs – recd at 93 cts – as for that French five franc coin, it would be worth 93 cents. Hmm.

Well, as you can see, this whole process of money changing in the absence of banks became very complicated, and by the mid-1850’s, most Iowans had had their fill of all this nonsense. Once Democrat Stephen Hempstead was voted out of the Governor’s Office (1854), the anti-bank sentiment had pretty much lost its steam, and by the mid-1850’s private banks – though very limited in the services they could offer – began springing up around Iowa. Once again, we offer the writings of Howard Preston for more information…

As Preston states, just because banks started popping up around Iowa, that didn’t mean that all of the money-changing problems were immediately solved. The financial panic of 1857, for example, hit many of these early banks very hard. Our State Treasurer – Morgan Reno – went on to become one of those early bankers in Iowa City who was able – to some degree – to weather the ups-n-downs of these early days of banking in Iowa. Read more here.

So, there you have it – a brief overview of banking in Iowa in the earliest days of our history. Here’s a big thank you to two dedicated treasurers who were able to weather the storm.

Keokuk County Treasurer – Benjamin P. Shawhan – who died at age 37 on May 8, 1852 and is buried alongside his wife Maria Ann Lowe Shawhan (1816-1884) at Sigourney East Cemetery in Keokuk County.

Iowa State Treasurer – Morgan Reno – who died at age 52 on July 8, 1869 and is buried alongside his wife Margaret A Hammer Reno (1825-1899) at Oakland Cemetery in Iowa City.