﻿ESAEET: STATE BANKING IN INDIANA 



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Alexander C. Stevenson of Putnam county pointed out what he 

 considered the most serious defects of free banks. First, they 

 would not be located at the places where they should be. Personal, 

 and not public reasons, would prevail in selecting locations. Secondly, 

 the best thing in connection with the present State Bank was the 

 mutual responsibility of its branches. That had kept up its branches 

 at various times and had saved it and the people from a great loss. 

 Such a thing could not apply to free banks. Thirdly, the strong 

 banks at advantageous points of commerce would have it in their 

 power at any time to break a small interior bank by buying up its 

 notes and making a run on it. 



Delegate Reed of Monroe county was strongly opposed to all 

 forms of paper money. Of all the means invented for cheating 

 the laborer, paper money, he thought, was the most effective. Its 

 circulation was indefensible upon any grounds of economy. It 

 enabled the few to fix the value of property and exercise a tjo-anny 

 more potent than any despot. Its stock argument was that we 

 had to use it as long as our neighbors did. In the Ohio Convention 

 the committee had reported against paper money, but had recom.- 

 mended its use because Indiana was using it. Under this system, 

 with fewer causes for commercial embarrassment than any other 

 nation, we had suffered most from commercial convulsions. Every 

 ten or twenty years we had run the cycle of expansion, contraction, 

 and explosion. Such money was not needed. The commerce 

 between England and America, amounting to $200,000,000 annually, 

 was carried on with $2,000,000 of specie and bills of exchange. 

 Wealth was the result of labor, yet the laborer was paid in paper 

 money and thus robbed. Mr. Reed was in favor of those principles, 

 printed so often in Democratic platforms in this state, that he 

 needed only to refer to them. First, no connection between gov- 

 ernment and banks; second, a gradual return from a paper money 

 system to specie; third, no grant of exclusive charters and privileges, 

 to banks, by special legislation. He would not bind the legislature 

 further, nor enjoin further duty upon it. 



Mr. Reed was followed by his colleague, William C. Foster 

 Sr. His views were directly opposed to Reed's. Mr. Foster advo- 

 cated a state bank in which the state should hold all the stock. 

 It was his opinion that a large majority of the people of his county 

 (Monroe), preferred a state bank. The premiums earned by the 

 peoples' money should revert to the people, and be applied on their 

 taxes. This, he urged, was Whig doctrine, as opposed to the Demo- 

 cratic free bank doctrine. 



