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INDIANA UNIVERSITY STUDIES 



a surplus of $1,434,000, a suspended debt of $216,000, which was 

 practically all collected, and banking property worth $100,000, and 

 the total earnings of the Bank for the twenty-one years were about 

 three and three-fourths millions. The ordinary expenses of the 

 state for the same period were about $1,800,000, or just about 

 one-half of the dividends, 



A criticism of the Bank, frequently heard from the beginning 

 and growing more frequent throughout the twenty years, was that 

 it failed to supply an adequate currency for the growing commerce 

 of the state. That this criticism was just, will be seen by com- 

 paring the capital stock, cUscounts, and circulation statistics in the 

 Appendix with the number of polls, acres of land assessed, and 

 the total valuation of state property. The wealth of the state 

 mounted by regular steps, while the capital of the Bank, its circu- 

 lation, and its discounts never appreciably increased. In 1836 the 

 circulation was $2,000,000, when the polls numbered 75,000, the 

 acres taxed numbered 5,000,000, and the total property was valued 

 at $67,000,000. In 1854 the circulation was only $3,500,000 when 

 the polls were 160,000, the acres 20,000,000, and the taxables near 

 $300,000,000. This comparison needs no further comment. The 

 disparit}' worked a great hardship anel injustice on the debtor class, 

 and this class formed a large majority of the people. 



But it must be admitted that the whole question of our cir- 

 culation was not in the hands of the Bank. There were other 

 factors controlling it, over which the Bank had no power. It must 

 be kept in mind that this was a state bank and that the state could 

 have increased its capital at almost any time when the legislature 

 would secure the money. Its capital was fixed by the law, and the 

 relation between capital and loans was also fixed by law. The crit- 

 icism applies more to the state than to the Bank Board. Between 

 1834 and 1838, the state borrowed about $10,000,000 in the East, and 

 disbursed it in the state. In 1839 the state issued $1,500,000 treas- 

 ury notes to meet cash obligations to contractors on the public 

 works. In 1840, it threw into circulation $722,640 of bank scrip 

 to pay the state's overdrafts by the canal commissioners. In the 

 year 1853, the free banks issued about $6,000,000 of paper. All 

 these factors made the question of the state's circulating medium 

 a complex one, while the medium itself, it must be noted, was 

 a very poor one. 



In conclusion, it may be said that the State Bank of Indiana 

 was the best in the West. Alone among western banks it weathered 

 the Panic of 1837, though it had to suspend specie pa\'ments. Not 



