﻿ESAREY: STATE BANKING IN INDIANA 



259 



in gold to see what terms could be made with the Secretary of the 

 Treasury, Woodbury. Lanier went by. boat to Wheeling, thence 

 by stage to Frederick, thence by the Baltimore and Ohio railroad 

 to Washington. His mission was entirely successful. Of all the 

 banks then possessing government deposits, the Indiana Bank was 

 the only one that offered, or paid any specie. The Secretary allowed 

 the deposit to remain till drawn in the regular course of business, 

 It is also very creditable to the Bank that its bills were regularly 

 received by creditors of the nation. Nearly every bank in the West 

 and Southwest broke under this strain, and also many in the East. 

 The Indiana Bank, alone, west of the Alleghanies, did not fail. 

 The Whigs attributed the general disaster to Jackson's war on 

 the Bank of the United States aided and aggravated by the specie 

 circular." 



The citizens of Indianapolis helped the local situation by approv- 

 ing in a public meeting the action of the Bank Board. The mer- 

 chants of Indianapolis showed their faith in the Bank and its 

 directors by giving notice promptly that they would receive State 

 Bank notes of all branches at par and by expressing in another 

 resolution full confidence in the Bank. In its turn the Bank 

 Board issued an address to the people of the state calling atten- 

 tion to the fact that the Bank must, in self defense, close its doors 

 against specie payment. Agents were in the state from the East 

 who would take away specie by the wagon load, by means of the 

 Bank's own currency. The Bank had on deposit in the eastern 

 banks $1,000,000 in its own notes which could all be used to draw 

 from the various banks the $1,000,000 in specie which was in their 

 vaults. The branches would continue to receive the paper cur- 

 rency at par and cancel all indebtedness. The people were warned 

 not to sacrifice their money. The people preserved their confidence 

 and the Bank preserved their money. The suspension was not 

 forced but was the result of due deliberation. The Bank reported, 

 and actually had, plenty of specie. A committee of the legislature 

 made a thorough investigation and approved its conduct. 



The credit of the Bank notes was not seriously injured by the 

 suspension, and President Merrill immediately set to work to 

 arrange with other banks for a resumption of specie payment. A 

 meeting of bankers from all parts of the country was called for 

 April, 1838. John Lanier was again called on to represent the 

 Indiana Bank. The bankers met in New York, and Lanier sur- 



26 Lanier, Life of Lanier, p. 15. 



" Indiana Journal, May 6, 1837. "Indiana, in 1837, had the largest amount of circulation and of 

 specie in proportion to its capital, of any state in the Union." George Tucker, The Theory of Money 

 and Banks, etc. (Boston, 1839.) 



