Indiana State sentinel. [volume] (Indianapolis [Ind.]) 1845-1851, 1846-01-01
The Small Note Law


The Legislature of ls4c-4l granted to the State
Bank the privilege of issuing small notes. under GER
tain restrictions The grant Of this right contained
IN two acts. The first was approved Feb 6. 1s4I
and the second, which is amendment of the first,
approved Feb IL, lS4l Tie 9th section of the act
of Feb. 6, is as follows
1t shall be lawful for the State Bank Of Indiana
to issue and circulate notes of denomination less
than five dollars, to amount not exceeding one
million of dollars"
This provision in the same and subsequent Sec
ton, is guarded by five provsos conditions; and
the Bank had right to issue small notes, under the
Statute. only in compliance with the terms Of each
and all Of the provisos.
Two of the conditions follows
First That this priri'ege shall be subject to the
control of the General Assembly, from and after the
18th Of January, lSi4"
Second Z" The Bank shall pay into the Treasury
of State, per centum for the amount Of notes UNI
der the denomination Of five dollars, hereby author
lied to be issued, be paid in three annual install
mcnts, beginning with the current year"
The 7b section Of the Act Of Feb Is, as follows
% That the pririlege Of issuing notes Of less de-
nomination than five dollars, granted the Bank by
thus General Assembly, be, and the same is hereby
enlarged to run from the lst day Of January
ISL, through period of five years; and the trou-
BILE and responsibility OF the State Bank, mana ging
and collecting the funds herein provided for being
converted into Bank stock, shall be deemed and taken
IA JnH consideration Of The per ccniuln. re-
qurcd 10 be paid by the Bank To the State, on the
amount of small notes. which the Bank has been by
the General Assembly authorized To issue and roth
ing in said Act authorizing the Bank 10 issue small
notes. shall be construed 10 authorize the taxa
ton of any Bank stock, which has not been heretofore
subject 10 taxation
Here We see that the Legislature first granted
privilege, and by subsequent act enlarged it, The
privilege To issue small notes. No one Will con-
tend that the Bank had has tic right to issue small
notes independently Of both Of those acts. Tie
provisions Of the Act Of Feb g. authorized tic Bunk
to issue small notes, upon The payment Of The PER
centam tar Whether that provision to issue small
notes is limited 10 time, is unnecessary en-
qure We shall see that il is matter of no impor-
lance. The Bank bound accept of it, if ut all,
with certain conditions. This it refused TO do and
issued note under the Act of Feb q. 1t re-
fused TO pay the one per cent. tax, or bonus.
The Act Of Feb. -, enlarged n pririicse. How
30 as 10 run from tie first day Of January ISL and
$50 thaD the trouble and responsibility of managing
and collecting the funds, should be in full considea-
tion Of the per tax. Here is an exclusive
and valuable franchise conferred and tax RENTED
The first offer having been rejected, the second was
accepted. The Bank issued all her small notes under
the Act of Feb I5 and the provisions of the 18th
ton of that Act,e Xpre by tier own Limitation on tie
1st day of January, Isle.
But it may be said, that as the first Act did not
limit the time during which the Bank might issue
small notes, the mention of fire years in the second
Act does not limit the time Let us examine this
point.
The Legislature first said to the Bank, you may
IN
million of dollars, upon condition that you pay into
The Treasury one per centum upon tie amount au-
thorized tc be issued, in three annual instruments
and, we reserve the right, the end of three years.
to make such other regulations as we think proper.
The Bank reples,-we Will not accept of that make
another and better proposition. The State then pro-
poses that the Bank may issue the same amount of
small notes for the period of five years, and that the
Bank shall assume the trouble and responsibility of
managing and collecting the funds therein provided
for being converted into Bank stock, to-wit: the
surplus revenue, sinking, college, and saline
fund and the State Bank school fund; and
this trouble and responsibility shall be in full
consideration Compensation satisfaction for the
per centum required in the first proposition The
Bank accepts the last proposition, issues the notes.
and takes charge of the funds be converted into
Bank stock.
Now we think that the Bank had no right to issue
small notes, except by the provisions Of the 18th Sec
ton Of the Act of Feb To- But if the 9th section of
the Act of Feb 6, is still open for the Banks accept
ance, then 1t must pay the per cent tax or bo-
nus as required thereby. We think the first Act is
not still open for the Banks acceptance. The Bank
has exercised the right of choosing it refused the
first offer and accepted the second and must abide by
the choice. In doing this, the Bank assumed the
responsibility and trouble Of collecting and manacinp
the public funds. The l2ih section shows that the
responsibility the Bank assumed was, not to be La
BILE for the then existing securities, but for the trou-
BILE, care, and diligence required in collecting and
managing the funds This responsibility the Bank
assumed when the small notes were issued Accord
ing 10 this view of the law the right to issue small
notes expires with the five years, and the board Of
Bank directors is bound to show that IT has underta-
ken the collection and management of the various
funds; that it has used due diligence in such colec
ton and management; and, so far as the board has
managed the funds under the law Of leiI it must
show that :the funds have not been diminished one
cent by want of diligence, or by any charge
Tor The trouble or expense In the collection and man.
agenent of them. The right to issue small notes
was IN full consideration for all such services.
The Chapmans cannot drive us into the attitude
of Bank defenders.-Morrison's Bank Organ.
That is quite cool, indeed Especially when the
same paper containing the above extract contains
columns the Banks defence from the had and fo;I