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INDIANA UNIYEHSITY STUDIES 



Bank of North America, Newport Capital, $50,000 



Prairie City Bank, Terre Haute Capital, 200,000 



Southern Bank of Indiana, Terre Haute . Capital, 100,000 



Traders' Bank, Terre Haute Capital, 100,000 



Merchants' Bank, Terre Haute Capital, 50,000 



State Stock Bank, Logansport Capital, 115,000 



Wabash Valley Bank, Logansport Capital, 200,000 



Bank of Evansville, Evansville Capital, 100,000 



Total Capital, $1,865,000 



These had deposited $910,000 worth of stocks face value, and had 

 received currency to the amount of $800,000. They were only an 

 earnest of the deluge. 



The circulation of the United States was about $200,000,000. 

 The amount necessary for the needs of Indiana was about $8,000,000. 

 The State Bank had approximately $4,000,000 in circulation, and 

 nonstate notes to an equal amount circulated in the state. There 

 were outstanding bonds in the United States, available for banking 

 purposes, to the amount of $275,000,000, and a limitation on the 

 use of these as well as on the amount of currency was plainly neces- 

 sary. There was also the fact that some of these banks were not 

 intending their notes for Indiana circulation, but had lent the 

 whole issue to traders in distant cities. Six of the banks w^ere 

 said to be doing a legitimate local business. Five had put their 

 notes in circulation at New York. No notes had been issued to 

 four of them at the date of the report, December 15, 1852.1° Either 

 Auditor Ellis felt that he had no authority under the law to restrain 

 the establishment of banks, or else he had no inclination to do so. 

 Governor Wright was inclined to think the latter was the case. In 

 his message " of January 7, 1853, the Governor, for the first time, 

 mentions the subject of free banking. Although he had signed the 

 bill, he had not recommended it in any previous message. Like 

 many others at that time, he recognized the insufficiency of the 

 circulating medium, and the inability or refusal of the State Bank 

 to meet this need. The Governor was, however, quick to see the 

 failure of the new law. The restrictions were entirely inadequate. 

 Already five banks, of the ''Owl Creek" kind, with only a nominal 

 existence, and a capital of $365,000, had been organized. These 

 bankers, he thought, had no idea of redeeming their notes. The 

 pledge of the state would give their notes circulation, and an un- 



"Doc. Jour., 1853, p. 150. 

 " Sen. Jour., 1853. 



