﻿ESAKEY: STATE BAXIvIXG I^^ INDIANA 



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entirely insufficient to prevent the abuses of the banking privileges. 

 It was to be regretted^ he thought, that this matter had not been 

 attended to during the last session. The country had over-traded, 

 and the broker was now hunting gold to pay our bills in the East. 

 It was fortunate that the broker came when he did, and stopped 

 the mad career of inflation. We had issued, in less than six months, 

 more than S6, 000, 000 of currency. Banks in many cases were 

 organized not to accommodate the commercial public, but to enable 

 the banker himself to borrow. Men with only enough credit to 

 borrow money to buy a few^ thousand dollars stock had suddenly 

 became bankers to the extent of millions. The plan is simple, 

 explained the Governor, deposit a few bonds with the state, on 

 which you continue to draw interest; the state will issue you face 

 value in currency. Then take the currency and buy more bonds, 

 often far below par, and repeat the performance. Banks are now 

 passing this worthless stuff over their counters, and poor men have 

 to accept it for wages — a money they can hardly use and dare not 

 keep. The legislature would be wanting in its duty to an outraged 

 people if it did not suppress the practice. The law itself is defective 

 and the administration of it under auditor Dunn is equally bad. 

 The Governor recommended a banking department with a board of 

 bank commissioners.^ ^ Our currency had been contracted 15,666,123 

 in twelve months — more than half the whole circulation had been 

 called in. There was not only a depreciated currency issued by 

 law but there was a more depreciated currency issued by railroads, 

 plank roads, and insurance companies, without a shadow of law. 

 Thousands of dollars of this latter kind had been thrown into 

 circulation and left to work the ruin of commerce. The credit 

 of the state, and the interests of the people, alike, demanded the 

 abatement of the evil. 



In fact, it appears, both from the message of Governor Wright, 

 and from a report of a joint investigating committee, that the 

 auditor's office was badly managed. The committee charged im- 

 perfect bookkeeping in the banking department, and carelessness 

 in the keeping of bonds and coupons; and still worse, they claimed 

 that when the banker returned a part of his circulation to the auditor 

 and demanded a like amount of his deposited bonds, he was given 

 his best bonds while his poorest were retained by the auditor. The 

 weakness in the auditor's office accounts, in large measure, for the 

 failure of this law. 



By January 25, 1855, there had been organized ninety-one free 



Sen. Jour., 1855, p. 2.3. 

 Doc. Jour., 1855, p. 864.. 



