Weekly Indiana State sentinel. [volume] (Indianapolis [Ind.]) 1853-1861, 1855-02-10
TRDAY MORNING., 10, 1855
The Free Banks.

Assembly whilst we review the system of
Free Banking which has so far been system
of Free swindling We know this is rather
a strong expression, but in these times it is
not best to mince words. Plain truths should
be spoken in plain language. By the de-
probation of this iShinp1aster currency the
people Of Indiana have been defrauded out
of more than a million of dollars. This
amount has been taken from the pockets of
honest men who "eat their bread by the
sweat of their brows," and transferred to the
vanlts of the Bankers, who have so far,
lodged that universal curse pronounced on
man at bis fall. They toll not, neither do
they spin, yet Solomon in all his glory was
not arrayed like one of them. Let those who
deal in soft words at the expense of truth
find the language to portray their acts in mil
der terms: We cannot. 1t may be said that
some of these banks have faithfully re-
deemed their promises to pay and have thus
preserved the credit and confidence of their
institutions. To such our remarks have no
application.
The convention which framed the present
Constitution of Indiana, assembled at time
when the bubble of speculation had just be-
gun to initiate. There was a cry for more bank
ing facilities. This demand did not come
UP in the shape of petitions from the people
the masses-b.It from those interested indi-
viduals who hope to become rich, not by labor
but by sort of hocus pocus legerdemain.
1t was said that the State Bank refused to
give the necessary accomm 'datiOns. Mer-
chants and land spectators could only bOr-
row two hundred dollars, at time. What
was two hundred b those who wanted thou
sands The State Bank loaned its money to
the stock dealers Give stock we mean,) and
produce merchants These loans were based
on realities.
The convention placed in the Constitution
provision authorizing FREQ Banking with
certain very loose restrictions. The subse.
quent Legislature whose duty it was to mould
and modify the Statutes. to the new organic
law, passed the general Banking act, which
is now in force, aud which we think the peo-
pie demand to be repealed.
The whole system in our opinion Is defec-
tive Ii is new experiment in the manufac
ture Of currency, which like the paper fOrtifi-
cations and pasteboard cannon of the Chinese
citieI may do very well for peace, but will
not answer for war. The Democrats had
warred on special privileges and chartered
monUpolies until the Wings conceded the prin-
ciple Of free banking, and many Democrats
we're misled under the specious pretenses,
and plausible arguments, that the deposite of
stocks would secure the bill holder.
The law itself was very loose aud defective.
There was no limit to the amount. 1t was
truly free bank act. Banks might be estab-
lished in every school district. For every
hundred dollars issued they were required to
keep on hand twelve dollars and fifty cents in
specie there was however. no agent or COM
missioner whose duty it was to see that this
provision was complied with. The honor of
the banker was trusted. They were not re-
quire to have directory, or banking house
or even banking houses. If they suspended
specie payment for thirty days the Auditor
was bound to wind them up; but he might
take years for this process, and the bank all
the time be engaged in its swindlng opera
tons.
The system in our opinion is radically de-
fective. 1t is continuance, not for the benefit
of the community who have money to lend,
but for he benefit of those who wish TO bor-
row: men Of Strengthened credit and doubtful
solvency. 1t was to give to land spectators
aud stock jobbers the means of raising the
wind without any solid capital.
The experiment has been repeatedly tried,
for the last two hundred years to give stable
credit and sound currency to bank bills, with
out specie basis, but hitherto it has failed
The power and credit of some of the strong
est governments of Europe, have not succeed
ed in accomplishing this object Heretofore
banks have been established, at the seats of
trade and commerce. This rule was reversed
under the free banking law of Indiana. OBJ
ssure and out of the way villages were select
ed as the location of the Banks The notes
were taken from the Auditors Office, register
cd and put in circulation, without ever having
been within the walls of the pretended banks ;
signed by Presidents and Cashiers, fresh from
Wall street. who could not even point out on
the map the dog fennel towns where these
banks were located.
The demand for stocks to bank on gave
them fictitious value; and Indiana fve's.
never worth really more than 80, ran hp to
los. Nine million of Bank rags were issued
from these new machines. The country was
flooded with Bank paper There was not
silver enough in the land for the children to
cut their teeth with-especislly when the
laws Of population are uLrestrained.
Overtrading followed, as it always will. this
redundancy..of paper money. Eastern debts
had to be paid. They could not be paid with
free bank paper Gold or silver, or exchange
must be provided. Private Bankers and
Brokers undertook to furnish this. The con-
sequence was run on the free Banks. The
Banks to save themselves retired their circula-
ton and took up their bonds and forced them
into the market TO raise specie or exchange :;
the inevitable result followed, State stocks
deprecated, and the currency based upon