﻿ESAREY: STATE BANKING IN INDIANA 



27:3 



to protect the billholder. All else must be left to the exigencies 

 of commerce. 



Horace Carter of Montgomery summed up in twelve propo- 

 sitions a long speech against moneyed institutions, in general: (1) 

 The legislature may charter a bank with branches. (2) The 

 state shall not be a partner farther than the investment of trust 

 funds. (3) The auditor of state shall register and countersign 

 all notes before they are put in circulation. (4) The billholder 

 shall be a preferred creditor in case of insolvency. (5) The stock- 

 holders shall be responsible, proportionately, for all debts. (6) 

 There shall be no suspension of specie payments. (7) The capi- 

 tal shall not exceed $5,000,000. (8) The branches shall not 

 issue currency, more than dollar for dollar for securities deposited. 

 (9) The stock shall be taxed as other property. (10) The 

 branches shall be mutually responsible. (11) The legislature 

 shall retain a supervising control. (12) The charter of the pres- 

 ent bank shall not be extended. 



Edward R. May, representing Delvalb and Steuben counties, 

 observed that Mr. Niles had shown, conclusively, that they should 

 not have a state bank, and Mr. Rariden had made it equally clear 

 that they should not have free banks. The only alternative, no 

 banks at all, would suit him very well; and he moved an amend- 

 ment, that banks be forbidden entirely. This was lost by a vote of 

 89 to 43i», showing that the ''state bank", "free banks", and "no 

 banks", forces were about equal. Following this, the secticn pro- 

 viding for a state bank only was voted down. 



George G. Shoup of Franklin county then submitted the free 

 bank proposition and the discussion opened again. Judge James 

 W. Borden of Ft. Wayne proposed that the legislature be com- 

 pelled to take a referendum vote of the people on any banking law 

 or bank charter before it should go into effect in the state. 



January 4, 1851, Judge Horace P. Biddle of Logansport spoke 

 at length in favor of free banks. The speech was the most scholarly 

 delivered up to that time. He pointed out the great evils of an 

 unregulated paper currency. His contention was that gold and 

 silver should be the only money, or measure of value. An issue of 

 paper would have the effect of raising prices and defrauding the 

 creditors. Likewise, when such a bank failed, or called in its cir- 

 culation, it lowered prices, or values, and defrauded the debtor. 

 The State Bank, he said, had in its vaults 11,250,000 in specie, on 

 which it floated a circulation of $4,000,000, the excess of which, 

 over the specie, was so much inflation and rested on pure faith. 



»» Debates, p. 1445. 



