﻿ESAREY: STATE BANKING IN INDIANA 



279 



VI 



THE FREE BANKS OF 1852 



The thirty-sixth session of the General Assembly met December 

 1, 1851. The new constitution had been in operation one month, 

 when on January 3, 1852, Wilham Z. Stewart of Cass county 

 moved that a select committee of one from each judicial district 

 be appointed to report a free, or general, banking bill. The speaker, 

 John W. Davis, a democrat of Carlisle, Sullivan county, appointed 

 Mr. Stewart, James F. Suit of CHnton county, William H. English 

 of Scott county, John L. King of Jefferson county, Robert Dale 

 Owen of Posey county, William B. Black of Boone county, Junius 

 Beeson of Rush county, Robert M. Hudson of Vigo county, Thomas 

 Stanfield of St. Joseph county, Joseph W. Dobson of Owen county, 

 Zimri Reynolds of Grant county, Isaac D. G. Nelson of Allen county, 

 and Hiram A. Hart of Ripley county. ^ 



On January 12, chairman John W. Spencer of Ohio and Switzer- 

 land counties presented the report of the regular committee on banks. 

 This was in response to a resolution of the House to inquire into the 

 necessity of enacting a general banking law. A majority of the 

 committee favored such an act, and recommended the following 

 restrictions: (1) All issues of currency were to be secured by an 

 equal amount of United States, or state stocks, and all banks were 

 required to keep on hand in specie twenty-five per cent of their 

 note circulation. (2) Two-thirds of the securities might consist of 

 stock, one-third, of real estate mortgages. (3) A shght discrimina- 

 tion should be made in favor of Indiana bonds. (4) No bank 

 should have less than $25,000 capital. The committee asked that 

 this report be referred to the select committee on banking. ^ 



February 9, 1852, Mr. Stewart of the select committee reported 

 a bill for general banking. ^ It was similar to the New York banking 

 law of 1838 but did not permit mortgages to be used as a basis for 

 note issues, and it did allow bonds of other states to be so used. 

 The bank notes were to be redeemable at all times in gold and 

 silver. In the report accompanying the bill the committee ex- 

 pressed the opinion that a state bank with branches could not 

 furnish adequate circulation. The conduct of the present bank, 

 they continued, in refusing to establish new branches, was full 



1 Ho. Jour., 1851, I, 340. 

 » Ho. Jour., 1851, I, 425. 

 'i7o. Jour., 1851, I, 803. 



