54 
Indiana University 
December 6, 1802, and was called the Kentucky Insurance 
CompanjT-. It was authorized to acquire and hold corporate 
property to the value of $150,000 and to issue $100,000 in 
stock. It could give and take bonds, bills, and notes and 
receive and pass them by assignment. In the twentieth sec- 
tion of its charter were these words: 
And such of the notes as are payable to bearer shall be negotiable 
and assignable by delivery only. 
The company, finding it could use and pass many of these 
notes, procured a modification of its charter on December 
19, 1804, which allowed a great increase in its issue. The 
legislature pledged itself not to charter other insurance com- 
panies while this one operated, thus giving it broad privileges 
and a monopoly on both insurance and banking. The com- 
pany prospered and soon aroused jealousy. It was denounced 
and branded in the legislatures as a monied aristocracy, and 
its charter was mutilated, impaired, and menaced. But its 
notes and land warrants (certificates issued by the state treas- 
urer on the deposit of cash in the treasury which gave a claim 
for a given number of acres anywhere the purchaser chose 
on the state’s vacant lands) furnished a very large portion 
of Kentucky’s currency.^^ The Kentucky Insurance Company 
was chartered originally to expire January 1, 1818. It lived 
to the end of its charter, but, on account of impairment of 
its early privileges by the legislature, it lost its prestige and 
drifted into bankruptcy. Many of its notes payable to bearer 
were never taken up, and its early successes were eclipsed 
by its financial disaster in the end.^^ 
Kentucky chartered her first regular bank on December 27, 
1806. This institution was known as the Bank of Kentucky 
and had a capital stock of $1,000,000. Half of its stock was 
reserved to the state, and the state named the president and 
six of the twelve directors. Under the charter the legislature 
might at any time increase the number of directors to twenty- 
four.^^ The power which the legislature reserved over the 
bank was a dangerous one, since thru it “The bank was made 
a political, instead of a financial, institution and for this reason 
Duke, op. cit., l4, 15. 
R. T. Durrett, ^‘Early Banking in Kentucky” (a paper read before the Filson 
Club, November 7, 1892. The original manuscript is in possession of the Filson Club, 
Louisville) , 10-13. ? 
Duke, op. cit., iJ, 15. 
