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INDIANA UNIVERSITY STUDIES 



ried on with distant cities, and required large capital. Business 

 was active and increasing, but was hampered for lack of a circulating 

 medium. This medium, he thought, could best be obtained by 

 rechartering the United States Bank. The second plan, he opposed 

 on the ground that a state currency might easily and advantageously 

 be created, and would be more apt to remain in the state and more 

 freely respond to local needs, than a national currency. The lands 

 recently granted to the state might easily be funded for $500,000, 

 and state bonds might be sold in the East for $500,000 more in 

 specie. These bonds could run for fifty years. This would give a 

 capital of $1,000,000 on which $2,000,000 in notes might safely be 

 circulated. A state bank, he thought, was to be preferred to a 

 corporate bank for several reasons. Its gains, which would be 

 large, would accrue to the people themselves. If stock was sold, 

 it would drift into the hands of a wealthy class, perhaps outside 

 the state, who would manage the bank with attention solely to its 

 money-making or dividend-paying power. As a state bank, it 

 would be a unit in council, and would have a single purpose which 

 would be to serve the state and people. Its directors should be 

 elected annually and changed every two years. Means would have 

 to be provided, of course, to prevent its getting into politics or 

 creating an aristocracy. The fourth plan, which involved an issue 

 of treasury notes, he asserted should be looked upon as a last resort. 

 Our state is now out of debt and such issues would be bills of credit, 

 the issue of which the state constitution forbids. The state con- 

 stitution prohibited the incorporation of banking companies, but 

 allowed the establishment of a state bank with branches. The 

 fifth plan, which was to establish a co-partnership bank, the state 

 subscribing a part of the stock, needed, Mr. Ewing thought, no 

 considerable discussion. The evil effects of a co-partnership bank 

 had already been experienced in this state. The First State Bank 

 almost destroyed credit, endangered the validity of contracts, and 

 so lessened the confidence of man in man that ordinary business 

 was seriously deranged. Moreover, it injured the credit of the 

 state, and gave to its citizens a weakened reputation for financial 

 integrity. Mr. Ewing thought it the duty of the state to guard 

 against the repetition of such a calamity, and oppose every possible 

 bar to such an issue of ''Owl Creek" currency. Finally, he said, 

 the committee believed a national paper currency preferable to any 

 state emissions. A national bank was thought better than a state 

 bank on account of its wider power, its national affiliation, and its 

 greater uniformity. ^ 



• This report is given in the Indiana Journal, January 2, 1833. The Indiana Journal was pubUshed 

 at IndianapoUs, and was the_organ of the Whigs. 



