﻿270 



INDIANA UNIYEESITY STUDIES 



and would continue to draw five per cent on them; that at the 

 same time they would issue on them $7,000,000 in currency, which 

 would earn from seven to ten per cent ; that then these kind-hearted 

 bondholders would draw from twelve to seventeen per cent on their 

 investment, and that the citizens of Indiana would pay the bill. 

 That there would be free banks he considered as settled; but he 

 wanted people to see whence the demand came. He did not want 

 the bondholders to feel that they had pulled the wool over every- 

 body's eyes. 



When the discussion was resumed on January 3, Mr. Allen 

 Hamilton of Ft. Wayne spoke. It seemed certain, he thought, 

 that the people of Indiana wanted a paper money circulation which 

 could be easily converted into specie. The first question to decide 

 was, whether we were to have one bank, or many. The committee 

 on currency and banking were in favor of many banks. A minority 

 favored a state bank with branches in which the state would have 

 no stock except trust funds, and over which the state would have 

 control as it did at that time. His next inquiry was, would these 

 two kinds of banks work well together. He was of the opinion 

 that they would, and that the leading business men would connect 

 themselves with both. The greatest complaint against the present 

 State Bank was lack of capital. Since the state did not have suffi- 

 cient capital to bank on, it must attract outside capital into the 

 business. This currency must be received by everybody in the state, 

 or it would not circulate freely and command confidence. He 

 granted that the present State Banli was a monopoly; that the 

 branches had too much power; and that they had used it selfishly 

 to prevent the establishment of other branches. But just as surely 

 would the free banks be monopolized by the foreign bondholders. 

 There was then about $7,000,000 in circulation in Indiana, one-half 

 of which was furnished by the State Bank. This field not utilized 

 by the State Bank, private banks should occupy. 



In the afternoon, John B. Niles of LaPorte, addressed the con- 

 vention. He desired to see the plan of free banking adopted 

 exclusively. If they should combine the two he feared the State 

 Bank would be too strong. He was not an enemy of the State 

 Bank, he said, and did not want to see its capital withdrawn, but 

 he did want to see it pass into private hands just as that of 

 the old banks of New York had done. A government should at- 

 tempt nothing which could be accomplished with equal benefit to 

 the public by individuals. At that day he could see no more neces- 

 sity for the state's engaging in banking than for its engaging in 



