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James Seiver Conway’s administration created Arkansas’s first bank

James Sevier Conway
Encyclopedia of Arkansas

The son of Thomas Conway and Anne Rector, James Seiver Conway was born in Greene County, Tennessee on December 4, 1796. Wealthy by frontier standards, his family lived on a plantation where cotton, corn and livestock were raised and the children (7 sons and 3 daughters) were educated by private tutors.

The first 20 years of the 19th century saw the citizenry of the United States begin a westward movement towards the Mississippi River in search of new homelands. Fortunes were quickly reaped by those who speculated in frontier land, and surveyors were first in line to reap this bounty as they opened up the new territories for settlement.

Thomas Conway moved his family to St. Louis in 1818. It is thought the move was an effort to locate the family within close proximity to Anne’s uncle, William Rector, Surveyor General of the Missouri Territory. This vast expanse of land included the entire acreage of the Louisiana Purchase, minus the area that was now the state of Louisiana.

In 1820, James was assigned the task of surveying Arkansas’s western boundary, bordering the Choctaw Nation, and the southern boundary bordering Louisiana. The boundary Conway’s survey drew with the Choctaw Nation was more south-southwest than the “true south” it should have been. This resulted in an increase of 100,000 acres into the Arkansas territory and stirred the anger of the Choctaw leaders. The matter would not be resolved until 1886 when the Supreme Court ruled in favor of the Choctaws; however, the court allowed Arkansas to keep the land. In an effort to settle the dispute, the Choctaws were paid 50¢ per acre for the disputed land.

President John Quincy Adams appointed Conway to survey the western boundary of Arkansas from the Red River to the Arkansas River in 1825 and President Andrew Jackson appointed him Commissioner for Arkansas in 1831, assigning him the task to determine the state’s southern boundary. In 1832, he was named Surveyor General of the Arkansas Territory, comprising the present-day states of Arkansas and Oklahoma.

The new title carried with it a raise in pay; enough to make it possible for Conway to purchase a plot of land along the Red River 2,000+ acres in size and elevate him to the planter class. He named his plantation Walnut Hill and dwelled there with his wife, Mary Jane Bradley, their 10 children (five who died in infancy) and 80 slaves. In addition to Walnut Hill, the Conways owned a summer cottage in Magnet Cove and a bathhouse in Hot Springs.

In some respects, Arkansas’s first surveyors (Conway, Sevier, Johnson and Rector) were related. Added to the fact they possessed advanced knowledge of Arkansas’s best acreage, these individuals rose in fortune and power during the state’s early years, becoming known collectively as the “Dynasty” or “the Family”. This Democratic kinship dominated Arkansas politics and held strong ties with the presidential administration of Andrew Jackson. Conway’s entry into politics was aided by his connections to Benjamin Johnson, future chief justice of the Arkansas Supreme Court; Ambrose Sevier, territorial delegate to the U.S. Congress and Arkansas’s first United States Senator, his uncle, William Rector.

On June 15, 1836, Arkansas became a state. During the state’s Democratic Party convention that same month, Conway’s connections served to gain him the party’s nomination for governor. Not one who enjoyed life on the campaign trail, Conway chose instead to express his position on numerous issues in letters he wrote to the newspapers in Little Rock and key political leaders. Between these efforts and those of friends speaking at political rallies on his behalf, coupled with his family ties, Conway defeated Absalom Fowler by a vote of 5,338 to 3,222 in the August general election.

Governor Conway’s administration began on September 13, 1836 and demonstrated a combination of success and controversy. On the plus side, the state’s institutional structure began to take shape. This included public roads, prisons and banks. In 1836, the Second Bank of the United States was scheduled to expire, so joining with other state leaders, Conway set out to charter a state bank to make available both money and credit to the citizenry, in addition to being a place for Arkansas’s surplus of state funds to be deposited. Two of the first bills Governor Conway signed into law established a State Bank and Real Estate Bank.

When Arkansas became a state, the quantity of federal funds being received for the creation of roads and maintenance of river channels was quickly reduced and the state now faced the financial burden of doing so. Add to that Arkansas’s border with Indiana Territory increased the number of lawless individuals traveling through the state. This increased the need for additional structures to incarcerate these convicts and wrecked havoc with Arkansas’s severely limited funds.

On the plus side, Arkansas found herself on the receiving end of an influx of individuals who increased the state’s productive population from 52,240 to 97,574 throughout the four years Conway was in office. The taxes paid by these individuals, coupled with federal turn-back funds, helped the state’s coffers to swell, resulting in a surplus in only two years. Governor Conway now requested the General Assembly to allow the surplus be used to create and support a public school system and state university. The assembly, however, voted to reduce taxes.

Throughout history, individuals have learned success is balanced with failure, and James Conway was no exception. The early success his administration enjoyed was soon tarnished with problems. The text of the Arkansas Constitution stipulated taxes could not be levied in excess of the amount needed for the normal operation of the state and the first year’s collection reflected an influx of funds in excess of what was needed. Governor Conway now convened a special session of the General Assembly to revise this tax code.

Conway’s timing for this request soon proved to be disastrous, due to the fact it coincided with a cutback in federal funds resulting from a national recession. The outcome collapsed Arkansas’s banking system and threw the state into fiscal chaos. As the national “Panic of 1837” moved into a full-scale depression that would endure for five years, the last two years of Conway’s administration saw Arkansas’s $50,000 surplus plummet to a $65,000 deficit.

It has been said bad luck comes in threes. If so, Governor Conway possibly felt this to be his fate. Prior to the state’s financial disaster, he was plagued with controversy. In 1836 Native Americans gathered in force across Arkansas’s western border, threatening attacking on local settlements. Conway endeavored to quell the threat by sending a militia unit of 200 armed men to Fort Towson to join the federal officials already posted there.

An election held to choose the fort’s commander quickly sparked discord among the populace. Absalom Fowler, Conway’s chief gubernatorial opponent, was originally selected to command. Troops later rescinded their vote and chose Leban C. Howell, who received Conway’s backing. Fowler, however, refused to relinquish his victory and ordered the arrest of Howell. When Governor Conway intervened, Fowler demanded a court inquiry into Conway’s behavior. In the end, Fowler claimed vindication; however when Conway released a letter Fowler had written to the newspapers, along with the court record, public support was found to be on Conway’s side. Though Fowler later dropped the charges he had made, the incident proved to have a large affect on polarizing political opinions.

The third member of Conway’s bad-luck trinity was his health. In the summer of 1838, Conway considered resigning from office due to being seriously ill. After spending several weeks at Hot Springs, he returned home to Walnut Hill and the life of a planter, refusing to run for a second term. Here he devoted the remainder of his life to his plantation and the local community. James Seiver Conway died of pneumonia on March 3, 1855 and was buried in his family’s cemetery at Walnut Hill.

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