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INDIANA UNIYERSITY STUDIES 



Merrill it became the policy of the Bank to lessen its discounts to 

 merchants and to give more assistance to exporters. The report^^ 

 of 1840 showed loans to merchants of $1,032,136, to farmers of 

 $600,310, to manufacturers of $610,754, to exporters of $771,376. 

 A comparison of the above with the report of 1841^6 will show the 

 result of this new policy. Loans to exporters in 1841 were 

 $1,111,747; to merchants $982,602. 



Another source of worry to the bankers during these years was 

 the unequal demand for money at different seasons of the year. 

 An inspection of the books shows that loans and circulation fluc- 

 tuated about $1,000,000 each with the season. During March and 

 April, discounts ran over $4,000,000, while they rarely ran higher 

 than $3,000,000 from August to October." Lending more to 

 exporters and farmers, it was thought, would tend to equalize 

 business. 



The report of November, 1840, shows that directors had borrowed 

 from the Bank $430,802; other stockholders, $907,797; thus a 

 total of $1,338,599 of its outstanding debts was against its own 

 stockholders. All other loans amounted to only $2,339,819. 

 It was to this condition that President Merrill alluded when he 

 said many officers of the Bank sought the positions only to enable 

 themselves to borrow money. If we add to this amount the 

 $692,433 owed by the state and a suspended debt of over half a 

 million, we realize what a burden the bank was carrying. It had 

 in suit for collection at this time also about $200,000, most of 

 which had to be collected from sureties. The legislature of 1841, 

 to satisfy both itself and the people, appointed N. B. Palmer to 

 make a thorough investigation of the Bank. His long and detailed 

 report 3 9 of the investigation is, in general, creditable to the Bank 

 and is incidentally a convincing witness of the ravages of the panic 

 and the general distress of the people. Three quarters of a milhon 

 dollars of the Bank's loans were tied up by protest or suit. The 

 Bank was so crippled in resources that it was unable to furnish an 

 adequate circulation. A contracting currency is one of the gravest 

 wrongs that can be inflicted on a debtor class of people. The 

 bankers recognized the injustice, but seemingly were helpless to 

 prevent it. 



S6 Doc. Jour., 1840, Bank Report. 

 86 Doc. Jour., 1841, p. 109. 

 " Doc. Jour., 1840, p. 95. 

 »« Doc. Jour., 1840, p. 94. 



39 Doc. Jour., 1842, p. 85. Nathan B. Palmer, the author of the report, had just finished a six 

 years term as treasurer of state. He found the Terre Haute cashier, Aaron B. Fontaine, a defaulter 

 to the extent of $9,500. Fontaine fled to Texas. So far as I have found, it was the only case of 

 embezzlement in the whole career of the Bank. 



