﻿290 



INDIA^TA UNIVERSITY STUDIES 



Up to this point the lobbyists had intended to work with the 

 State Bank officials in obtaining a new charter, but being unsuc- 

 cessful in making this alliance, they faced about and began laying 

 plans in a different direction. Their next scheme was to charter 

 a new state bank, relocate the branches, and transfer the state 

 stock in the old bank to the stockholders of the new one. For 

 this purpose, Judge Smith, the author of this new scheme and the 

 leader of the lobby from now on, drew a bill purporting to be a 

 copy of the old charter, ^ but having a tew changes in order to make 

 it conform to the new constitution and to the experience of the 

 last twenty years. The first of these changes was that the state 

 stock be purchased by the new bank at a fair appraisement. This 

 appraisement was to be made by commissioners, elected by the 

 present legislature. In payment for this stock, state bonds might 

 be surrendered to the state at par, although as mentioned above 

 these bonds were worth only 90 on the market. 



Section 79 of this bill,« called the ' 'percussion clause," contained 

 the ''joker" that cost the people of Indiana a half million dollars. 

 This section followed the corresponding one of the old charter, 

 except for two innocent looking changes. Books for stock sub- 

 scription were to be opened between nine and twelve a. m. instead 

 of from nine to twelve, and the phrase ''for the subscription of the 

 requisite amount of stock" was inserted. To make these changes 

 look more harmless, all the old provisions for scaling down surplus 

 subscriptions and for cutting out corporate subscriptions, and the 

 preference for the subscriptions of citizens and residents of the 

 districts were retained. 



The bill 7 as it was introduced provided for three grafts. The 

 first consisted in selling the State Bank stock at a price to be named 

 by the lobby and paid for with bonds bought at 90 and turned 

 in at 100. This met with the most violent opposition and had to 

 be dropped later. 



The second was in locating the branches, in which the new 

 board of bank commissioners had full power. This board of com- 

 missioners, named in the second section of the bill, was composed 

 of Thomas L. Smith of New Albany; Andrew L. Osborn of Laporte, 

 who was one of the best known lawyers of the state, had been born 

 at New Haven (Conn.), had come to the West in 1835, and had 

 served his county five terms in the legislature; Jehu T. Elliott of 

 New Castle, who was a Hoosier by birth, was an office-holder con- 



« Bank Frauds, p. 340. 



Laws of Indiana, ch. iii, sec. 79. 

 ' Laws of Indiana, 1855, ch. iii. 



