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142.

Constitutional Provisions Proposed, Considered and Rejected by the Convention.

The following constitutional provisions were proposed by individual delegates or committees and after consideration by the Convention were rejected.

(a) BANKS, CORPORATIONS AND FINANCE.

1. Registry of Bank Notes.-Sec. 3. Some officer of the State shall register all bills or notes issued or put in circulation as money, and security shall be required for their redemption in specie, by stocks of the United States, of this State, or of other interest paying states at their market value, and not above par (p. 194). Reported by the committee on currency and banking on November 5. Laid on the table on second reading by a vote of 9436 (p. 680).

2. Enactment of Bank Law, Registry of Issue and Collateral Security. If the General Assembly shall enact a general banking law, such law shall provide for the registry and countersigning, by the Auditor of State, of all notes, designed to be circulated as money; and ample, readily convertible collateral security for the redemption of the same, in gold and silver, shall be required to the amount of dollar for dollar, which collateral security shall be under the control of the treasurer of state: Provided, however, That for the first twelve years after the adoption of this constitution, stocks of the State of Indiana, or of other solvent states, or of the United States, shall alone be received as such collateral security; to be, or to be made equal to stock bearing six per cent., and to be taken at their market value, but not above. par (p. 680).. Amendment proposed to the foregoing and rejected.

3. Supervisory Control of Banks.-Sec. -. The legislature shall provide, in the charter of any bank established under this article, a supervisory control of the same (p. 197). Submitted by a minority of the Committee on Currency and Banking on November 5.

Authorizing Establishment of Bank and Branches but Prohibiting State's being Partner Therein.-Sec.-. The legislature may authorize the establishment of a new State bank with branches to go into operation, after the expiration of the present bank charter, under such regulations as may be provided by law. But in no case shall the State be a partner, or have any interest therein, or in any branch except as may be occasioned by the

investment of any trust funds of the State therein as loans, and the safety of any funds so invested shall be secured by the preference in payment in case of insolvency, over the stocks of individuals. in the bank (p. 194). Reported by a minority of the Committee on Currency and Banking on November 5. Laid on the table. by a vote of 76-62 (p. 627).

Amendments proposed and rejected: (1) Prohibiting the legislature from establishing any banking corporation or continuing any existing banking corporation beyond the term of its present charter unless approved by a majority of the electors of the State. Rejected by a vote of 43-89. (2) Entirely prohibiting the establishment of any banking institution. Rejected by a vote of 43-89. (3) Prohibiting the establishment of a banking institution, except a state bank and branches, not exceeding one branch in each county, provided $200,000 be subscribed by individuals, and authorizing the General Assembly to adopt the present bank and branches with proper instructions. Rejected by a vote of 57-75. (4) To strike out and insert:

The business of banking shall be free to all, on such terms and restrictions as the legislature shall impose in a general law for such purposes subject to the following restrictions:

1st. No banks shall directly or indirectly charge or receive any greater rate of interest than individuals shall be allowed to charge or receive.

2d. The bill or notes of all banks shall be registered by some proper officer of State, and ample security readily convertible into gold or silver, taken for the redemption of the same.

3d. The stockholders or owners shall be individually responsible for the debt of such bank.

4th. The billholders shall have preference in payment in case of failure.

5th. No law authorizing the suspension of specie payment shall be granted. Rejected by a vote of 18-107. (5) There may be incorporated by the General Assembly a state bank with branches, with such powers, rights, and liabilities as the General Assembly may think proper to bestow upon it, and the General Assembly may incorporate other banks from time to time with such powers, liabilities and restrictions as may be deemed proper; but the individual stockholders of such State bank, and the stockholders of all other banks, shall be individually liable for all the liabilities of such banks to the amount of their stock held at the time

such liability accrued. But no other corporation shall be a stockholder in any bank incorporated under this article.

(6) Section 1. The General Assembly shall have no power to pass any act granting any special charter for banking purposes; but corporations or associations may be formed for such purposes under general laws.

Sec. 2. The General Assembly shall have no power to pass any law sanctioning in any manner, directly or indirectly, the suspension of specie payment by any person, association, or corporation, issuing bank notes of any description.

Sec. 3. The General Assembly shall provide by law for the registry of all bills or notes issued or put into circulation as money, and shall require ample security for the redemption of the same in specie.

Sec. 4. The stockholders in every corporation and joint stock association for banking purposes, issuing bank notes or any kind of paper credits to circulate as money, shall be individually responsible for all its debts and liabilities of every kind and description.

Sec. 5. In case of the insolvency of any bank or banking association, the bill-holders thereof shall be entitled to preference in payment over all other creditors of such bank or association.

Sec. 6. No bank or banking association shall, directly or indirectly charge or receive any greater rate of interest than individuals shall be allowed to charge or receive.

Sec. 7. The General Assembly may also, at the time it passes a general banking law, impose such other and further restrictions and regulations as they may deem expedient and proper for the security of the billholders; Provided, That no such law providing for a general system of banking shall have any force or effect until the same shall have been submitted to a vote of the electors of the State at some general election, and been approved of by a majority of all the votes cast at such election. Rejected by a vote of 28-94. (7) Strike out all after the word "the" in the first line, and insert the following: legislature shall have no power to pass any act granting any special charter for banking purposes, but corporations or associations may be formed for such purposes under general laws.

The legislature shall have no power to pass any law sanctioning in any manner, directly or indirectly, the suspension of specie payment by any person, association, or corporation issuing bank notes of any description.

The legislature shall provide by law for the registry of all

bills or notes issued or put in circulation as money, and shall require ample security for the redemption of the same in specie.

The stockholders in every corporation and joint stock association for banking purposes, issuing bank notes of any kind of paper credits to circulate as money after the first day of January, 1852, shall be individually responsible to the amount of their respective shares of stock in any such corporation or association for all its debts and liabilities of every kind contracted after the said first day of January, 1852.

In cases of the insolvency of any bank or banking association, the billholders thereof shall be entitled to preference in payment over all other creditors of such bank or association. Rejected by a vote of 27-103. (8) Mr. Owen moved to strike out the section under consideration, and insert the following:

Section 1. The General Assembly shall not have power to establish or incorporate any bank or banking company, or moneyed institution, for the purpose of issuing bills of credit or bills payable to order or bearer, except under the following restrictions:

1st. The State shall not be a stockholder in any bank after the expiration of the charter of the State Bank.

2d. No bank bill or note shall issue for circulation until it shall first have been registered and countersigned by the Auditor of State, nor until there shall have been deposited as security for the redemption of the same, dollar for dollar, stocks of the United States, or of such States of this Union as may be designated by law, to be estimated at their market value, in the city of New York, but not above par: Provided, That such stocks be, or are made to be equal to stock producing six per cent per annum.

3d. No law shall pass sanctioning, directly or indirectly, the suspension by any bank or banking institution, of specie payments.

4th. Billholders shall have preference of payment over all other creditors in cases of insolvency.

5th. Stockholders shall be individually liable to an amount not less than that of their respective shares of stock.

6th. No bank shall receive, directly or indirectly, a greater rate of interest than shall be allowed by law to be received by individuals loaning money.

7th. No bank or banking institution shall have exclusive privileges not granted to other similar institutions; nor shall any such institution be created by special charter.

8th. The General Assembly shall have the right to alter, from

time to time, or to repeal all laws that may be passed creating banks or banking institutions. Rejected by a vote of 46-91. (9) The following additional section was proposed and rejected by a vote of 47-90:

Sec. 7. The Legislature shall not have power to grant special charters for banking purposes, but may pass a general law, making the business of banking free to all, based on the principles of ample stock security for circulation, registry of notes by some State officer, preference in payment to bill-holders in case of failure, and individual responsibility of stockholders to an amount equal to their stock: Provided, however, That at the expiration of the charter of the present State bank, the legislature may, in addition to such general system, grant a charter for a bank and branches. But the State shall not be a partner, directly or indirectly, in any such banking institution; and if the trust funds, or any portion of them should be invested therein as a loan, their safety shall be guaranteed by the State. Stockholders in any such bank shall be individually responsible to the same extent as those acting under the general law (p. 628). (10) An amendment was proposed as follows as an addition to the foregoing, and rejected by default of the original amendment: The banks chartered under the provisions of this article, shall be mutually liable for the redemption of the circulation of each other to the amount, and in the manner to be prescribed by law, and no bank hereby contemplated, or allowed to exist in this State, shall ever be allowed to issue for circulation any note or bill of a less denomination than ten dollars, or circulate or pay out at its counter, or at any other as payment on bank account, any note or bill of any bank of a less denomination than ten dollars. (11) Sec. There may be established or incorporated in this State a State bank and branches, in any or each county in said State, when a specie capital is furnished for said branches, as may be prescribed by law. Rejected by a vote of 62-72. (12) The following proposed as an amendment to the foregoing was rejected: The State shall not be a stockholder in any bank, after the expiration of the charter of the State bank of Indiana; nor shall the State lend its credit for the purpose of aiding in the establishment of any bank or moneyed incorporation whatever.

5. Prohibiting the State's being a Stockholder in the Future in any Bank-—

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Sec. The legislature shall not have power to create, authorize or incorporate, by any general or special law, any bank or

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