Indiana State sentinel. [volume] (Indianapolis) 1841-1853, 1846-01-08
The Small Note Law.

in two acts. The first was approved FEB. o, lo4i'
and the second, which amendment of the first, was
approved Feb. To- l54l Tie 9th section of the act
of Feb. 6, is as follows:
alt shall be lawful for the State Bank of Indiana
10 issue and circulate notes of denomination less
than FIVE dollars, to an amount not exceeding one
million Of dollars"
This provision in the and a subsequent Sec
ton, is guarded by five provisos conditions; and
the Bank had no right to issue small notes, under the
Statute only in compliance with the terms OF each
and all Of tie prosisos
Two of the conditions are follows:
First: That this privilege shall be subject to the
control of the General Assembly, from and after the
2Sth of January, 1874"
Second The Bank shall pay into the Treasury
of State one per centum for the amount of notes I'M
der the denomination of five dollars, hereby author
lied to be issued to be paid in three annual install
ments, beginning with the current year"
The 7th section of tie Act of Feb 15 is as follows:
"Tbat the pririlege Of issuing notes of less de-
nomination than FIVE dollars, granted the Bank by
this General Assembly, be, and the same is hereby
enlarged so as to run from the lst day Of January,
1871, through period of five years and the trou-
bic and responsibility of the State Bank, in managing
and collecting the funds herein provided for being
converted into Bank stock, shall be deemed and taken
as an fun consideration Of the one per centum,
amount of small notes, which the Bank has been by
the General Assembly authorized to issue and moth
ing in said Act authorizing the Bank to issue small
notes. shall be so construed to authorize the taxa
tion of any Bank stock which has not been heretofore
subject TO taxation"
Here We see that the Legislature first granted
privilege, and by subsequent act enlarged it. The
privilege was to issue small notes. No one will con-
tend that the Bank had has the right to issue small
notes independently Of one or both of those acts The
provisions of the Act of Feb g. authorized the Bank
to issue small notes, upon the payment Of the one per
cent3m tar. Whether that provision to issue small
notes is limited to time is unnecessary to en-
quire. We shall that it is matter Of no impor-
The Bank bound to accept of it, if at all,
with certain conditions. This it refused to do, and
never issued one note under the Act of Feb g. 1t re-
fused to pay the per cent. tax, or bonus.
The Act of Feb 10, enlarged The pririlege. How
So from the first day of January, 1911, and
$50 that the trouble and responsibility Of managing
and collecting the funds, should be in full considera-
ton of the per cent 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 under
the Act of Feb To- and the provisions of the 9Th Sec
ton of that Act, pire by their own Limitation on the
LIST day of January, 1S4e.
But it may be said, that as the first Act did moi
limit the time during which the Bank might issue
small notes, the mention of fire gears in the SECOND
Act does not limit the time. Let us examine thi.
point.
The Legislature first said to the Bank, you may
issue small notes to any amount not exceeding ont
million of dollars, upon condition that you pay int
the Treasury per centum upon the amount au
thorized to be issued, in three annual instalments
and, the right, at the end of three years
to make such other regulations as we think proper
The Bank replies,-we will not accept of that MAKE
another and better proposition The State then pro
poses that the Bank may issue the same amount o
small for the period of five years. and that tn
Bank shall assume the trouble and responsibility
managing and collecting the funds therein provides
for being converted into Bank stock to-wit In
surplus revenue, sinking, college, and salin
fund; and the State Bank school fund an
this trouble and responsibility shall be in FIJI
consideration Compensation satsfactiOn) for tn
one per centum required in the first proposition. Tn
Bank accepts the last proposition, issues the
and takes charge Of the funds to be converted int
Bank stock.
Now we think that the Bank had no right to issu
ouidA nOteS, except pTONlSIOHS vi tul SCI
ton of the Act Of Feb. I5 But if the 9th section
the Act of Feb g. is still open for the Banks accept
ance, then it must pay the per cent. tax OF DO
nus as required thereby We think the first Act
not still open for the Banks acceptance. The Ban
has exercised the right Of choosing it refused Tia
first offer and accepted the second and must abide
the choice In doing this, the Bank assumed III
responsibility and trouble of collecting and mana gin
the public funds. The 18th section shows that til
responsibility the Bank assumed was, not to be liza
bic for the then existing securities, but for the rol
bic, care, and diligence required in collecting an
managing the funds. This responsibility the Ban
assumed when the small notes were issued. Accort
ing to this view of the law, the right to issue sma
notes expires with tie five years, and the board
Bank directors is bound to show that it has undert
ken the collection and management of the varior
funds that it has used due diligence in such collie
ton and management; and, far as the board b;
managed the funds under the law of l94l, it mu
show that the funds have not been diminished Oh
cent by want of care diligence or by any charg
for the trouble expense in the collection and maj
agement of them. The right to issue small not,
was in full consideration for all such services.
The Chapmans cannot drive us into the attidut
of Bank defenders.-Jforr ison's Bank Organ.
That is quite cool, indeed Especially when Il
same paper containing the above extract, contain
columns in the Banks defence, from the head and ia