﻿ESARET: STATE BANKING IN INDIANA 



263 



This, however, was the ebb in the Bank's career. Recuperation 

 was as rapid as demoralization had been. Its large suspended 

 debt was nearly all collected, and from this point onward the 

 prosperity of the Bank was steady. The flood of gold in 1849-50 

 brought life to all avenues of business, and the ^'hard times" of 

 1837-43 were speedily forgotten. 



The Constitutional Convention of 1851 was dominated by the 

 Jeffersonian spirit ; so that a clause in the new Constitution forbade 

 the state ever again going into corporate business. The same party 

 that had dominated the convention passed a free banking law in 

 1852. These adverse laws to some extent interrupted the prosperity 

 of the State Bank, but the independent banks never successfully 

 challenged its leadership, and few of them ever achieved any success. 

 The state invested $1,390,000 in State Bank stock; of this amount 

 $510,000 was lent on long time real estate securities. The dividends 

 on state stock and on stock paid for by the state, and the interest 

 on mortgage loans were to constitute a sinking fund to be in the 

 hands of the Board of Commissioners of the Sinking Fund.*° This 

 was an ex-officio board made up of the same men as the State Bank 

 board. The sinking fund was set aside strictly to redeem the bonds 

 sold for bank capital. The Act of Congress, June 23, 1836, placed 

 also in the hands of the state a large amount of the Surplus Revenue 

 of the nation. One-half of this revenue was placed in this fund 

 and distributed according to population to the counties, to be lent 

 out by an agent appointed by the legislature. 



Looking back over the whole history of the State Bank of 

 Indiana, one is compelled to say that the Bank was successful. 

 Its success is the more striking because it stands against the sordid 

 background of ^'wildcat" banking. Its career fell largely in that 

 most unhappy period of our history called the Panic Era of 1837, 

 and it surely had little in its favor as far as the era was concerned. 

 It was, fortunately, well on its feet when this panic prostrated 

 business throughout the United States. Although it did not earn 

 large dividends during that period, it protected itself better and 

 took better care of its customers than any other bank in the West 

 and did equally as well as any bank in the nation. It had scarcely 

 weathered the panic when it found itself a creditor of a faihng 

 state to the extent of over one-third of its capital stock. The 

 sinister hand of party politics is seen here and there though never 

 deadly except in the Constitutional Convention of 1851 and in the 



Laws of Indiana, 1834, ch. vii. 



