﻿ESAREY: STATE BANKING IN INDIANA 



271 



buying produce. In reference to this question of banking he per- 

 ceived there were four parties. One party was opposed to all 

 banking as unsound and pernicious; another was in favor of the 

 present State Bank; a third was in favor of free banking; a fourth 

 was in favor of a combination of the two. In regard to the first, 

 he held that bank bills and bills of exchange were a great improve- 

 ment over specie, both by reason of security and the ease of trans- 

 ference. Illinois had forbidden banking, and yet the secretary of 

 an insurance company, chartered in Wisconsin, had issued and 

 circulated $1,000,000 of its notes in Chicago. As to the second, 

 the State Bank was a monopoly, and monopolies should be cre- 

 ated only on the grounds of absolute necessity. They are incon- 

 sistent with equal rights. The Bank had been successful in 

 Indiana; but such banks had failed elsewhere. It had made the 

 school fund SI, 000, 000, but it had lost an equal amount in an un- 

 fortunate bond deal. He was in favor of a system of banking that 

 v/ould combine freedom with absolute security to the bondholder. 

 He would not limit the security, but leave that to the discretion 

 of the legislature. At that time, state bonds would do, but in a 

 short time he hoped we would have no more bonds outstanding. 

 He was opposed to real estate mortgages, because real estate 

 should not be mortgaged, and because prices of real estate fluc- 

 tuated too much. The state should control the securities and also 

 the issuing of notes. The specie in the vaults would come and go 

 at the bidding of the banker, and would be no security. He pro- 

 posed that the banker should deposit with a state officer ample 

 security for the bill-holder and that all bills should be counter- 

 signed by the same state officer. 



Judge Niles was one of the best men in the convention. Born 

 in the East, he w^as a graduate of Dartmouth, a lawyer by pro- 

 fession, and a teacher of chemistry as a diversion. His ideas were 

 incorporated in the Free Bank Law of 1852. 



James G. Read of Clark county followed Mr. Niles, with a 

 bitter denunciation of the State Bank for showing favoritism to 

 stockholders and brokers; for refusing to lend money to farmers 

 and mechanics; and for selfishness in refusing to establish new 

 branches — the one at Logansport having been denied by the single 

 vote of the Lafayette Branch. At the close of his address he sub- 

 mitted some resolutions embodying his views: (1) The legisla- 

 ture shall grant no special charter; let banking be done under gen- 

 eral laws. X2) The legislature shall never allow a suspension of 

 specie payment. (3) Stockholders shall be liable for debts to the 



