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INDIAXA UXIYERSTTY STUDIES 



Books were to be opened at these places by the various boards 

 of commissioners who were empowered to organize the branches, 

 on April 1, 1817. Each branch was to accommodate three counties, 

 and residents of these three counties were to have the preference 

 in the subscription for stock. After the above amounts should be 

 subscribed for there would still remain $325,000 worth of stock, 

 which the directors were empowered to place to the best advantage. 

 All the branches were constituent parts of the parent Bank at Yin- 

 cennes. Each branch was to have eleven directors chosen by the 

 stockholders, and three, chosen by the state. A monthly state- 

 ment was to be made to the governor, and an annual report to the 

 legislature, showing: capital stock, debts, deposits, notes in cir- 

 culation, and specie on hand. Six per cent was to be the rate of 

 discount. The state might borrow a maximum of $50,000, but no 

 director could borrow over $5,000, or be security for more than 

 $10,000. 



The plan seemed comprehensive enough on paper. It was pro- 

 vided that the Farmers and ]\Iechanics' Bank of MacUson should 

 become a part of the state institution. The stockholders and 

 directors of the Vincennes Bank included enough of the politicians 

 of Ihe state to control the legislature at any time, and they were 

 thus sure of the patronage of the state. They had even looked 

 after the patronage of the United States; as nearly all United 

 Sta'es officers from, or in, Indiana were interested financially, 

 many officially. The presielent of the Bank was the receiver of 

 the largest land office in the state. The political situation, then, 

 was completely secure. But there were powerful economic reasons 

 why the Bank shoulel not succeed, and against these obstacles it 

 strove in vain. The best field for banking in the state was then 

 fully occupied by the Farmers anel jNIechanics' Bank of Madison, 

 1 ut its officers anel stockholelers refused to let it become part of 

 ^he state institution. There was very little specie in the state, and 

 the earnings of the farmers were spent, principally, in paying for 

 their homesteads. Ninety out of every hundred men in the state 

 were farmers, and farmers furnish very little business for banks. 

 Even the government policy of giving liberal time to its patrons 

 in paying for their homes was against the Bank. In some cases, 

 as in the Thirteenth and Fourteenth Districts, there were not even 

 suitable villages in which to establish the branches, while Troy, 

 situated where Anderson Creek joins the Ohio, Darlington on 

 Pigeon Creek, Paoli, Charlestown, and Brownstown, were little 

 struggling villages without commercial enterprise of any kind. 



