﻿State Banking in Indiana, 1814-1873* 



By Logan Esarey, A.M., Research Fellow in American History. 



I 



INTRODUCTION 



The following paper deals with a phase of our national experi- 

 ence of which Americans are not proud. Successful banking on 

 a comprehensive scale is not an old business. The present standard 

 in banking has been reached after many experiments, but within a 

 comparatively short time. One of these experiments was State 

 Banking. It was tried during the first half of the nineteenth cen- 

 tury. 



In all conventional pictures of state regulated banking, the 

 j "wildcat" banker from ''Owl Creek" has usually been thought 

 worthy of a full length portrait. Before approaching our subject 

 seriously, we must blot his picture from our minds. He has his 

 counterpart in every occupation. It would be just as fair to judge 

 mining by the broker who peddles "gold bricks" or bogus mining 

 stock, as to judge banking by the depredations of the "wildcat" 

 ; banker. Every gainful occupation gives rise to a class of expert 

 criminals pecuhar to that calling. The "wildcat" banker belongs 

 to the same class as the professional bank robber. Both are law- 

 I breakers, and both violate the law with the same intent. There 

 I were not more "wildcat" bankers in the first half of the nineteenth 

 j century than there are defaulting cashiers today. Higher intel- 

 j. ligence among the people and greater care on the part of law makers 

 I have driven the same class of men from the earlier to the more 

 j modern form of crime. 



I The bankers of that era were as honest and competent, com- 

 ^ paired with the standards of the time, as are the bankers of today. 



But they had a much more difficult problem to solve. Banking 

 1 flourishes in an orderly community. Steadiness and continuity in 



commerce make banking easy and safe. During the State Bank 



[ * This paper is No. 15 of the Indiana Univeesitt Studies. 



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