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

s,v,dnals could borrow from the State
enough to pay the remaining two INSTALL
uents. provided they gave a mortgage on
-eal estate to twice the amount borrowed.
In order to pay for its own half OF the
stock CSOO. 000lt and 10 be able to lend 10
Individual stockholders for that purpose.
te state issued bonds to the amount. in
all OF 81. $1,000. These bonds, known as the
rBank bonds,' bore 5 per cent. interest.
and were all sold abroad at a premium. In
spite of the bad condition OF the money
market when some OF them. were sold.
This fact speaks very well for the conf
dence felt in the bank scheme.
The legislature elected as President
Samuel Merrill, OF Indianapolis. then Treas
urer Of State. Two Of the four directors
elected by Ii Were also of Marion county
Calvin Fletcher and Seton W. Morris. The
cashier chosen by the board was James NJ.
RGy, who served as such through the en-
tire existence of the State Bank. and then
entered its successor. the Bank of the
State. in the same capacity. BY the 10Th
of october, 1884. the ten branches were all
organized and the first installment of can
ital paid in mostly I'm Spanish and Mex
lean silver dollars-) Governor Noble there
upon proclaimed the bank ready for bust
ness.
For the first two or three years the bust
ness OF the bank was prosperous. Things
were booming the country was being
rapidly improved" and money was in de-
1nand. But the great panic came in 1887
and the hank suspended specie payments.
70 owing the example of every other bank
H. the country but one. The step was
generally commended because of the I'M
questioned solvency of the institution and
the impossibility of maintaining specie
payments in the face OF universal sus-
pension. When the condition az
the bank was shown at a meeting
IN New York called to hasten resumption.
surprise was expressed at the large amount
of specie on hand "a million dollars in the
woods Of Indiana seemed very wonderful"
says a letter reporting the proceedings
Yet the panic was felt by the bank. and
felt severely, because of the large amount
OF real-estate security and the consequent
bad debts after the collapse of the bubble.
The entire period from May Is. 1887. to
June 10, 1872, was one of alternate suspen-
sions and assumptions for the whole coun-
try. But the State Bank OF Indiana vas
among those always most anxious to re-
sumo. and after the latter date never de-
faulted. After 1872 the policy OF the bank
was somewhat changed, and, instead of
lending on real estate, bills of exchange
were largely dealt in. From this time on
its stability was unquestionable. and it's
business was very profitable to the close.
On Jan j. 1857, the bank quit business, the
charter expiring. 1t then had two years
for winding UP, after which it went out of
existence.
The profits of the bank were very salts
fartnrty 70 tho Chorah0IIo~~ = 80
the regular dividends that had been paid.
the average amount realized On each fifty
dollar share at the close was 1865. AS the
State held about half the stock it will be
seen that there was a large profit. By the
provisions of the charter this amount, to-
gether with the principal and interest of
the sums originally lent to stockholders.
constituted a sinking fund, the proceeds of
which were finally to be turned into the
common school fund. After the conversion
OF the stock at the close Of the bank
this sinking fund amounted to 81, $50. Coz. SO.
II could not be at once closed mp, and on
Jan. !. 1861, Ii had increased 20 s4.647. O16.1 II.
In 1870 the Auditor of State estimated that
by the time this fund is finally closed it
will have added to the sacred cause of
common school education a permanent in
terest-bearing fund of nearly $780, Co.,. So
that the youngsters of the present day owe
something Of gratitude TO the 'daddies'' of
1884.
The pronounced success of the State
Bank was perhaps largely due to the Char
acter OF the men at the head. The direc-
tors were chosen from the best men of the
State. Samuel Merrill, the first president,
is especially remembered as a man of I'M
Improbable honesty and t~horoughgoing
ability. To him was in great measure due
the successful organization and the care
ful conduct of the business for the first
ten years. Mr.. Merrill was a Wing, and
at the end of his second term of five years
the Legislature of 1884 was violently DEM
ocratic. The result was that the president
was removed and a Democrat elected. The
Legislature, however, was not too blind to
select an able man in the person of Judge
James Morrison. During his administra-
ton the State aud the bank were prosper
Gus. But his turn cam, at the political
guillotine, and in February. 1913, Ebenezer
Dumont was elected president. The latter
served until the close of the bank.
The State Bank of Indiana was a brill
liant success. AT a time when financial fol-
ly was the rule, it was furnishing to the
people of Indiana a bank-note circulation
that was never below par, and 1t stood
throughout as an mistaken bulwark of
financial order in the State. Its history
viii support the statement that good COM
mon sense and patriotic honesty will go
FAR toward supplying the lack OF special
knowledge in public affairs. If ever our
banking system needs changing. our states
men might get a few pointers" by digging
up this old charter of the State Bank OF
Indiana w +.