﻿ESAEEY : 



STATE BAXKIXG IX TXDIAXA 



253 



all the officers were definitely stated, and any violation, even the 

 ■east, was made a felony. The Bank Board prescribed a uniform 

 system of accomiting. A trial balance had to be made every month, 

 and a complete settlement semi-annually. Each branch was per- 

 sonally inspected every half year by a member of the state Bank 

 Board. 



The capital of the Bank was placed at SI. 600. 000, later raised 

 to 82,500,000 by an amendment adopted ^larch 1. 1836. One-half 

 of the entne capital stock was subscribed by the state. Each 

 branch was to have an equal part of the capital, i. e., 8160,000, at 

 first, and after the amendment of 1836, 8250,000. The policy in 

 organizing was to distribute the stock as Ts^idely as possible, and for 

 this purpose the state arranged to lend money on real estate mort- 

 gages to subscribers of bank stock. To carry out this provision 

 of the charter and pay for its own subscriptions the state borrowed 

 in the East 81,300,000. The charter was to run twenty-five years, 

 expiring January 1, 1859. The state constitution, of its own force, 

 added some features to the charter. It forbade ami:hing but a 

 state bank vrith. branches, not more in number than one in every 

 three counties. The capital was to be subscribed in those counties, 

 and no branch could open until the sum of 830.000 in specie was 

 paid in. 



One cannot fail to note the great care chsplayed in the charter 

 to make the Bank safe, and its circulation sound. All the arts 

 known to "swindling bankers" were guarded against. As indi- 

 cated above, the notes were signed by the local cashier and the 

 central president. There was mutual responsibility among the 

 branches, but not a division of profits, each branch retaining all 

 it earned. The Bank Board might limit the loans of any branch 

 to one and one-fourth times the paid in capital; and might cah 

 for reports monthly or oftener. or take control, and close a branch 

 permanently. It might take funds from one branch, when they 

 were not being used, and transfer them to another in need of money. 

 Xo branch might have more debts due it than twice its capital; 

 later this limit was raised to two and one-half times. A subscriber 

 had to pay 818.75 in cash on each 850 share. The state furnished 

 the balance. 831.25. and took freehold security, double the value 

 of the loan. These loans to subscribers were to run from twenty 

 to thirty years. All money earned by the state stock, above the 

 five per cent interest on the bonds, was to go into the hands of the 

 Commissioners of the Sinking Fund, by whom it was to be lent on 

 freehold security. 



The reference is to an act of 1815 in which private bankers are called "swindling bankers." 



