Page:A History of Banking in the United States.djvu/428

 In 1843, the report of the bank was very encouraging. Its capital had been diminished $600,000, which had not weakened it. The debt of the State to it and the suspended debt had been greatly reduced, and the treasury notes raised nearly to par. The stockholders owed less than ever before and the specie had increased. Further remarkable illustrations of the discipline exerted by the Central Board over this bank were presented at this time. The facts show that such discipline was called for, and the comparative success of this bank must be attributed in large measure to the vigor and firmness with which the Central Board exerted their authority. One branch which had been badly managed, and had persisted in spite of admonitions, was suspended, and was not restored until, in the following year, it had been reduced to order and subordination, under the rules of policy which the Central Board had adopted. The prospect for business, the following year, was considered good; but "much more might be done if the collection laws of the State did not enable so many of the bank debtors to violate their engagements with impunity." The president thought that stay laws might be beneficial both to creditors and debtors in certain conjunctures, but that they ought to be removed when the conjuncture had passed. In 1844 the bank petitioned for and obtained a continuance of the right to issue small notes.

A description of the currency of Indiana, in September, 1843, is as follows: The State Bank paper and the paper of the specie-paying banks of Ohio are the standard; "scrip" is the treasury notes of the State, receivable for dues to the State, but not bearing interest when paid for taxes. "Bank scrip" is a State issue to pay the State Bank for advances to the canal contractors. "White dog" is a State issue to pay for canal repairs, receivable at its face and interest for canal lands east of Tippecanoe. "Blue dog" is a State issue for extending the canal, receivable for canal lands and canal tolls. "Blue pup" is a shinplaster currency issued by the canal contractors and redeemable in "blue dog." The quotations are, "scrip" 85 to 90; "bank scrip" 85; "white dog" 80 to 90; "blue dog" 40; "blue pup"—!

.—The session of 1840-41 was called two weeks earlier than usual, in order to provide for the interest on the public debt, which would fall due January 1, 1841. A party fight arose over the question whether this was a special session, which must adjourn in order that the regular session might commence at the constitutional time. The fate of the banks was supposed to depend upon this, because the suspension of the penalties of suspending specie payments had been extended to the "end of the next session." The democrats succeeded in adjourning the called session, which they construed as putting an end to the banks. The Bank of the State, for its own purposes, adopted this construction, and, assuming that it was under compulsion to redeem at once, all discount and loan business was immediately suspended, and the bank refused all further advances to the State or redemption of