The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-09-23
STATE BANK OF INDIANA.


In these days. when public attention 10 -
greatly attracted 10 propositions for a vast
extension or the functions of government. It
seems to be not generally known-or at
least IL is generally forgotten-that for
twenty-iye years the State OF Indiana was
a partner In an extensive and profitable
business. Yet such is the fact; and one OF
the most interesting periods Of our his
tory is that from Jan. Is. 1894. to Jan. !.
1859. during which time the institution
known as the state Bank of Indiana" ex-
ercised a great and ~salutary influence upon
the commercial and financial interests OF
the State. But, aside from that, IL brought
to the State. its largest stakeholder. a
profit OF something like 5000. 600; and this
sum. together with its accumulations, now
forms a large part of the common school
fund.
Indeed, il it could be thoroughly investt
gated, the entire financial history or Indi-
ana would be very instructive. For there
have been four distinct periods. each with
its own peculiar kind OF banks. Immedi-
ately after the organization of the State
the Bank Of vincennes, the State Bank OF
Indiana" with several branches. was es-
tablished. the State being a heavy stock
holder. But. because OF gross mismanage-
AAAtAt kAO Cbe~<
voked by the Supreme Court about 1871.
Then for thirteen years or more there
were no banks in Indiana-at least. none
that could issue notes. The second period
began in 1884. In that year the State Banh
of Indiana was chartered; 1t continued until
1857, when it was succeeded by 1.-THE Bank
of the State of Indiana" The third period
was that Of the free banks" organized
under a general law passed in 1852 The
results of these. free banks were very un-
satisfactory, to say the least. Those OF
them that had not before persisted were
obliged, after the passage OF the national
bank act. either to discontinue or change
their nature. The Bank Of the State, which
had been very successful, was also COM
PEELED to wind up because OF the 10 per cent
tax on the issues OF State banks. The
fourth and present period is characterized
by the national banks. In this way the his
tory of the State offers excellent oppor- .,
tunities for comparing several different sys5s
TENS of banks and their effects. But, be-
cause of it's success. its peculiar features.
and Its comparative antiquity. the State
bank system of 1884 is perhaps the most
interesting.
1t is a very fascinating occupation to
pore over the newspapers OF the time and
follow the growth of the sentiment in
favor of a State bank. One notes the first
faint suggestion OF such a scheme in ths
legislative reports during the annual ses-
sion of 1880, when It was proposed to
make a profit from certain State funds
by establishing a bank. The idea gradually
took hold upon the public mind until the
exceedingly vigorous action of Andrew
Jackson clinched the matter, and made the
State bank a necessity. This is one of the
.o~xx ->,x- - A;oA T4A1rr1~ -, 49,
sonality has impressed itself upon the
life of the nation. In July, 1892. his fercs
war upon the United States Bank cui-
minated in the veto OF the bill TO re-
charter that monster" As the United
States Bank at that time supplied the
greater part of the currency OF the entire
Northwest, it was evident to the people
OF Indiana that they must provide for them
selves in some other way. As a conse-
quence, the State bank scheme was at
once taken up. and when the annual ses-
sion convened in December, 1882, an elabo-
rate bill was introduced in each house.
The discussion was very lively and con-
sumed a great part OF the time of the
session. But the bill was not conservative
enough to meet with approval and was fin
ally defeated.
The people had now become thoroughly
AittcHcSleu. ILc 1OiiOWhI uIiuuc a
number of pubic meetings were held
throughout the State TO discuss the matter. /
In indianapolis the feeling was especially
warm because of the action of Calvin
Fletcher, representing the county in the
legislature, who had by his vote defeated
the measure. Being a conservative man. he
had stood firmly opposed to what he con-
sidered an unsafe bill. But the people
wanted more money at any cost and he
was loudly charged with having caused the
ruin OF the towns business. He therefore
resigned his seat. Later events. however,
showed his wisdom.
When the next session met, in Decen1-
Der. a thoroughly conservative and care
fully studied bill was introduced. After a
prolonged discussion, during which the
measure was subject to the closest scrutiny
and the severest attacks, and after numer-
Gus amendments had been made. the bill
was finally passed. receiving the Governors
signature on Jan. IS, 1894.
The "act establishing a State bank" il
a monument to the ability and faithfulness
of Indiana legislators of the former days.
This charter bears upon It's face the EVIL
dence of thorough-going honesty and pub
lie spirit. 1t is difficult to see how any
scheme for providing a bank note circulation
could be any more conservative than this.
hedged about as IL Is with numerous checks
and counterchecks. Moreover, it seems az
a whole to have been the creation OF
Indiana brains. although many OF the pro-
visions were copied from the charter of the
United States Bank.
In structure the state Bank OF Indiana
was positively unique. Being ostensibly a
system composed of a central bank and ten
branches, the central body was in reality
not a bank. but a controlling Office. The
charter provided that an Office should be
kept at Indianapolis, but that the lending OF
money, discounting of paper, issuing OF
r.otes, and all ordinary functions Of a bank.
should be performed ''by and through her
branches alone. The ten branches were
afterward increased to thirteen, and were
located as follows: indianapolis. Richmond.
Lawrenceburg, Madison, New Albany. Bed
ford, Evansville, yincennes, Terre Haute.
Lafayette, Fort Wayne. South Bend and
Michigan City.
The board of directors of the State Bank
consisted of. first, a president and four d.
r~ectors. elected by the Legislature, and. sec
- sLf.--- $500 .1 4