﻿ESAREY: STATE BANKING IN INDIANA 



261 



the last three were never opened. The Logansport Branch was 

 kept out by the opposition of Lafayette, since the opposing vote 

 of a single branch would prevent the estabhshment of a new one. 



During the sessions of the state legislature, there was much 

 spirited, and even angry, discussion of the Bank. A report by 

 Samuel Judah,32 January 1, 1839, expresses the opposition. Bank- 

 ing, said the report, was to be considered a mere trade, like mer- 

 chandising, open to all men. At Common Law anyone had a right 

 to bank. The only restraints were the natural ones — a lack of 

 capital, and a lack of credit, or both. The practice of restrictive 

 banking came from England and was fostered by the chartered 

 banks. The report answered the argument that the state consti- 

 tution prohibited private banking, by saying that the Tenth Article, 

 which was said to do so, was reported by James Noble whose 

 brother, Noah, had soon become interested in a private bank at 

 Brookville; and that Judge Benjamin Parke, a member of the con- 

 vention of 1816, had helped to organize the '^Steam Mill" company 

 of Yincennes — a banking company that issued notes. The report 

 considered the New York bank plan best^^ because it would give 

 three very desirable results. It would be a guarantee that the 

 one who issued the note had something back of it; it would give a 

 steady demand for bonds that are now all but worthless on the 

 market; and it would give more money for circulation. 



At the time when the enemies of the Bank were attacking it 

 in the legislature. President Merrill in his annual report^* October 

 31, 1839, said: ^The failure of the $1,000,000 of extra capital is 

 making money scarce and depressing prices. The Bank has had 

 to curtail its loans to the extent of $730,000 in thirty days. It has 

 too many useless officers and directors. State regulations also 

 hamper the actions of the Bank. We would open the Thirteenth, 

 Fourteenth and Fifteenth branches, but the state cannot get capital 

 for its part of the stock. Politicians are injuring the Bank by 

 catering to its enemies. In many cases worthless directors get 

 on the bank boards only to insure to themselves a loan from the 

 Bank. Long time loans ought to be avoided especially to merchants 

 and speculators. The state has made a net profit on its Bank 

 stock of $391,334 up to 1839." Following the suggestion of President 



" Doc. Jour., 1838, Bank Report. 



»» Doc. Jour., 1838, No. 13. The author of this report was born in New York City in 1798, but 

 spent practically all his life in Vincennes. He was one of the best lawyers of the state. He served 

 in the state House of Representatives six terms, being speaker in 1840. 



"For an explanation of this plan, see below, page 271, ff. 



" Doc. Jour., 1839. Here as usual Merrill speaks more as an agent of the state than as an agent 

 of the Bank. 



