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INDIANA UNIVERSITY STUDIES 



full amount of their stock. (4) In case of insolvency the bill- 

 holder shall be a preferred creditor. These were the general fea- 

 tures of the New York free banking law, which was the ideal of the 

 free bank party. 



Christian C. Nave, a delegate from Hendricks county, spoke 

 favoring a state bank. His picture of what would happen under a 

 free banking law was almost prophetic. If they should allow the 

 legislature to adopt a free banking bill, he declared, it would do 

 nothing more than bring upon the people of this state an odious 

 issue of irresponsible currency. The free banks would issue all the 

 paper they could and put it into circulation. Each would be re- 

 sponsible only for its ow^n issues, and the moment you traveled 

 out of the town in which the bank was situated, your money would 

 depreciate, for it would be to the interest of the banks in the 

 neighboring towns that it should depreciate. A man with such 

 money could not travel out of the state without being "shaved'' 

 at every turn. Further, if there should be a run on the bank, and 

 the little specie in the vault should be used up, there would be noth- 

 ing to do but close the bank. This, then, would be the history of 

 free banking. 



Mr. Nave was a member of the Danville bar and one ol the 

 leading criminal lawyers of the West. He had served his state 

 in an official way since 1834, sitting in the legislature five terms. 

 He was an east Tennesseean by birth and a graduate of Washington 

 College. 



Dr. Othniel Clark of Lafayette next addressed the convention. 

 He observed that his people were more interested in banking than 

 in any other question before the convention. He favored free 

 banks, and opposed equally those who favored no banks and those 

 who favored state banks. His people opposed the present Bank 

 because the business of the state had outgrown it. There could 

 not have been a better system, when it was established, but that 

 day was forever past. Also his people were not satisfied, because, 

 though the state claimed control over the present Bank, it did not 

 have it, for the state elected four state directors and the Bank 

 thirteen. For each branch, the state chose three, and the local 

 stockholders seven. Lastly, his people complained that, where the 

 produce of the country was collected for shipment, there no one 

 could borrow money except dealers and merchants who were stock- 

 holders. And if others should succeed in getting a loan, they had 

 to pay on the dot, while the stockholders could have their time 

 extended. The state should have no more interest in banks than 



