Indiana State sentinel. [volume] (Indianapolis) 1841-1853, 1851-01-16


there could be no failure There could be system
better guarded and better restricted The free Bank
ing system of recent origin Ii had no connection
with the free issue Of shin pasters that founded
nothing The present State Bank was founded on as
good system any that had been adopted of this
kind Of Banking; but the system of issuing more
notes than secured, radically wrong. The
free Banking system had been in existence twelve
years. He would oppose securities founded mort
cages real estate because there difficulty Of
title and uctuaton in value that could not be control
ed. He contended, that unless a system of Banking
adopted that would do injustice, should do
without Banking altogether. company individual
for instance might have $50 900 in gCo1 and secure
State stocks-these might be deposited-the notes to
Tat value drawn out and the banker would draw bis
per his stocks and could well afford 10 loan
the notes which would always be good founded such
securities for the same interest Having their founda-
ton like bills Of exchange actual and always ex-
stng basis the notes must be good He believed the
system right because bills of exchange had been issued
for the last six centuries. This circulation not In
tended to do away with other bills of exchange, and
hence its local value and circulation the great OBJ
Iect
Mr.. Kelso spoke at length in oppoaon to free Bank
ing. He opposed TO all Banks, in preference 20
such system. He then enumerated large number ON
and cities in Indiana, and gave the amount oil
Bank capital that would be required by EACH amount
ing to nine millions of dollars in his estimate He ask
ed the principle Of procuring State stocks, where
the money to come FRONT III the money had TO be
raised it would from the pockets of the people
then why not at once authorize a depose of nine mil
he supposed there were other of obtaining the
securities behind the curtain He then into cal
cuation of the expense of the basis for free Banking
order to show the burhens that would imposed upon
the people He denied the position of the gentleman
from Cass, Mr.. Bdde,) that there would be differ
cnce in the monetary affairs OF the country, whether
many few notes would be issued He asked, whether
circulation OF nine millions would make dierencei
He then said there objections the State Bank
but these could be refaeded. He objected to fcti-
tous bills Of exchange, payable the Branch that
issued them. But this and other objections would be
obviated in a new charter. He then asked how the
matter would work, should internal Improvement
bonds be called home?
He held in his hand report from the Secretary of
the Treasury showing that these bonds had once sold
low as sixteen TO the dollar He alluded New
York, where in instance, the stocks of that
State, where Bank failed, were sold under par. Our
citizens generally OF the failure of Of these
banks, would have five, twenty dollars in their
pockets Should they 90 the office having the secur
ties deposited. with such small sums, of what avail
would the thousand dollar bonds be 10 theml He beev
ed modified State bank the only one that was ex.
pedient. He then gave picture of the evils of Bank
conractions and expansions. The whole design OF Bank
ing to make money and these institutions great
sandered If they do not bend their charters for
Lhat object He thought the system brought forward
would give unnecessary naucement 90 into bank
ing. He then read article from the Democratic Re-
view showing how bills of exchange would entirely dis
pense with large circulation OF money after which he
contended that present circulation could be made
answer by the aid of such bills He thought we had
much better dispense with all banks than 90 into this
system
In 1S47 the circulation of the State Bank was little
three millions and half OF dollars In 1913 there
increase of circulation of little over one hun
dred thousand dollars In 1S49 there decrease of
s400 600 This could affect the country very little He
then showed the increase and decrease Of circulation of
the New York banks The reports OF the Banks of that
STATE showed in increase of 50 900 900 and
in several other instances, increase decrease OF
more than half million in three months. This, he be-
eved, evidence Of the greater stability of the
State Bank.
He contended in conclusion that the feeling for free
banks in this Convention and amongst the peo-
pie; but much he opposed to the system if one
amendment adopted. he would vote for it. If its
friends would agree to submit their SYSTEM soa-
ted proposition, to the people, he would for it, be-
leving that their decision would be right and if they
adopted the system the fault il any, would be theirs.
Before any question was taken, the Convention ad-
Ijourned.
In the afternoon the Convention resumed the consd.
Grafton of the Bank question.
Mr.. Owen said that it was not his purpose at this
tme to make an argument on the general question of
banking. He rose, however, to make few remarks,
in answer to the gentleman from Switzerland (Mr Kel
lso). The name, Free Banking, he contended an
improper one-t should be called general system; or
rather a restricted system of Banking. The getleman
had urged that State securities. basis too
ucuating and had reminded the Convention that In.
diana bonds had sold for sixteen twenty
the dollar. This, he believed would again.
We had learned dear lesson and Indiana bonds were
now valuable and safe any in the Union. The
United States bonds he believed, could not 90 down
without dissolution of the Union. Besides, these
bonds not to be taken at their par but at then
market value
He opposed to part Of the New York system, that
made landed mortgages as security These might be
eventually good but were convertible Immediately
into money. He would favor system, if should be
adopted requiring security of State or Uuited States
stocks to be registered in the Office Of the Auditor
some other office, and dollar for dollar of the market
value only given to the Bank. With regard the OBJ
lection urged against the system that failure per
son holding small amount of might have a thou
sand dollar bond rendered him in payment, he urged
that power of attorney should be given the Auditor
to sell any OF these bonds, whenever there pro
test for non-payment. He paid high compliment
the State Bank, and said her charter contained man,
valuable features. The mutual liability principle wa
of the BEST and has been of the greatest
Of sustaining the Bank But he objected to the Sta
Bank, because il was monopoly; and the combination
OF such monopoly with the government might be dan
gerous In the extreme. His policy, however not Il
insert in the Constitution any positive provision thi
subject He would favor restricted principle purely
leaving to the Legislature the privilege OF having bank
not but divested, by such restrictions Of the prn
a cipe Of monopoly.
e Mr.. Stephenson favored State Bank, because an in
stitution, like the in existence afforded ac
ties for purchasing the produce Of the country. Th
gentleman from Cass had contended that Free Bank
would not disturb the moned nterert. This he denied
q He contended that Free Bank much of mo
: nopoly as the State Bank. II you permitted man
u who had hundred thousand dollars OF bonds, in hi
pocket, TO 60 into Banking, you give ust much of
monopoly to the State Banks The interior countie
8 would not be benefited by Free Banks. The mutus
liability principle was the chat had sustained tn
State Bank Of Indiana. This principle had, and woul
. always prevent the interior Banks from going down
He then went into an argument 10 show, that intero
Banks under the Free Bank system could not compel
g with the Banks in the commercial cities. The com
! mercial points, would have the advantage OF trade an
commerce, and might be sustained: but the nterio
Banks would he put down, being the interest OF th