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INDIANA UNIVEESITY STUDIES 



banks with a total nominal capital of $9,502,330 and an outstanding 

 circulation at the time of $4,581,833, backed by deposited bonds, 

 whose par value was $4,941,515. The money of the state was 

 never so deranged as when the thirty-eighth session of the general 

 assembly met. As soon as H. E. Talbott became auditor, he stopped 

 the issue of bills, but the cancellation went on and the consequent 

 contraction of the circulating medium continued. 



The legislature, at once, took up the currency question. A bill 

 reported by the banking committee repealing all laws on the subject 

 was laid on the table without a vote, as also was a bill to stop the 

 issue of bank notes under five dollars. ^2 On January 30, a new 

 free banking bill was introduced into the Senate and passed to 

 third reading without a dissenting vote. The next day a bill for 

 a bank with branches was passed to the same stage by the same 

 vote. While the Free Bank Bill was being discussed by the Senate 

 a similar bill was sent over from the House. This was referred to 

 the committee on banking, who reported it back next morning 

 for passage. After several amendments, the bill went to third 

 reading by a vote of 36 to 12, and immediately, under a suspension 

 of rules, passed by a vote of 43 to 6. The bill was vetoed by Gov- 

 ernor Wright, who based his veto on the grounds that the bill 

 gave the auditor power to change the stocks deposited as security; 

 that it devolved duties on the governor and treasurer of state, 

 officers already overburdened; that it did not carry any remedy for 

 the shameless frauds perpetrated by the free bankers; that it allowed 

 speculators to buy up the depreciated bonds of any state or terri- 

 tory and cash them at the expense of the people of Indiana; that 

 the bill made great effort to protect the billholders of broken banks 

 but made no effort to keep banks from breaking; that ''believing 

 as I do in a gold and silver currency, I will not sign a bill that pro- 

 vides a less valuable one;" that an examination of the auditor's 

 office, in which this bill vests so much discretionary power, would 

 convince any man of its insecurity; and finally that "it is impossible 

 to give the public confidence in any system, managed as the present 

 one has been, and the sooner it is put into other hands, confident 

 and faithful, or entirely wound up, the better it will be for the 

 people and the character of the state, which has already suffered a 

 loss which it will take years to retrieve." 



Notwithstanding the Governor's arraignment, the bill received 

 the support of thirty-six of the fifty senators. The legislature was 



'» Doc. Jour., 1855, p. 934. 

 « Sen. Jour., 1855, p. 172. 

 "Sen. Jour., 1855, p. 721. 



