The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-11-20

The Pittsburg Chronicle Telegraph, com
menting on the recent bank failures in
| Crawford county, says:
1t may fairly be judged that Indiana is
somewhat prominent in furnishing in
stances Of bank failures of peculiar char
acter. The calamities are not so much, as
] a general thing, the outcome of adverse
! causes as of undue indulgence on the part
| OF their managers in what goes under the
name of speculationS. The Indiana charac-
| teristic is that this is mostly done with
| other people money, and generally in
| wolves a ring of three or more banks in a
| common ruin. Three towns in lower Indiana
| are hit this time to the tune of half mil
! lion, serious matter in a purely agricul-
| tural region Whether the incident will pro-
| mote the work of the Indianapolis commits
sion OF currency reform remains to be seen.
| 1t would be easy to hold an affirmative
| opinion, and say that this reform organi-
| cation will take occasion to advocate the
| extension of the national banking system
| by way of branch banks in the rural re-
| gions.
The losses are greatly overestimated in
this statement. They will not reach a quar-
ter of a million, and will probably fall be-
low 100000. That is too much for the peo-
pie Of any community to lose, but it lacks
a good deal of being half a million.
In so far as the above extract conveys
an imputation on Indiana banks or bank
ers it is unjust. AS class the bankers Of
| this State are as conservative and it's banks
as sound as those of other States,
certainly of any Western State. Before the
war our state bank law was universally
recognized as one of the best, if not the
best, in the country, and state bank
and branches among the best managed
This was so far true that Salmon p. Chase,
war secretary of the treasury, selected
Hugh McCulloch, president of the old Bank
of the State of Indiana, for the first con-
troller of the currency. Mr.. McCulloch or
ganized the national bank system and sub
sequently became secretary of the treasury
and one of the best. His conservative bank
ing methods impressed themselves on the
State The national banks of Indiana, 113
in number, have stood every storm and
stress as well as those of any other State.
There have been few failures, but not
nearly as many as in some other States
Our present state bank law is a good one
and the banks organized under it are sub
ject to strict supervision by the state audi
tor and are sound and well managed. The
only trouble is with a class of private
banks organized in small towns, with small
capital, chiefly for private gain without
much regard to any real business demand.
These banks are organized under the gem
eral incorporation law and are really roth
ing more than private partnerships. People
who trust them do at their peril There
are such banks in every State in the l. 4.
and failures among them are no more Z.
quent in this State than in Others. It wc..id
be better if all these small private anks
could be. supplanted by national banks, but
under the present law fixing $4,000 as the
minimum capital for a national bank.
that cannot be. The failure of these banks
seems to be an argument in favor of au-
thorzing the organization of national
banks of smaller capital. Secretary Cages
plan of currency reform suggests that ma
tional banks be permitted to organize. with
minimum capital of $4,000 in any place
having population of two thousand or
less. There is no national bank in Crawford
county, and there are some other counties
in the State without one Such a provision
as that suggested by Secretary Gage would
permit the organization of national banks
OF small capital. thus supplying every COM
munity with a bank under government
supervision and doing away with the entire
! brood of little private banks