MR. BANKER: Indiana presents the anomaly of having organized the most admirable system of banking of any state in the Union, and also of having had a banking system or banking practices at one time so vicious that under it the banks bankrupted nearly the whole people. The State Bank of Indiana and its successor, the Bank of the State of Indiana, stood all the tests of financial panic from 1834 until the banks were all absorbed by the National Banking System, without closing their doors for a minute, or losing a dollar to bill holders, depositors or stockholders. It is a proud distinction for Indiana that its State Bank was long the model bank of the country. So well were its affairs managed that in a period of twenty-two years of actual business, the profit to the state on its $800,000 of stock amounted to three and a half millions of dollars. The Bank of Indiana, which became a model, was chartered in 1834, with a capital of $1,600,000, and the state was divided into ten districts, afterwards increased to seventeen, there being a branch of the bank in each. Under its charter the bank could receive deposits, buy and sell gold, silver, bullion and foreign coins, discount commercial paper, and issue bills payable to bearer--a true credit note. A forfeiture of 12-1/2 per cent was imposed upon all notes not redeemed in coin. The institution was hardly under way when the panic of 1837 broke upon the country. The New York banks suspending, compelled the Indiana Bank to follow in order that it could protect itself. John J. Knox says: "No bank in the country stood higher than did the State Bank of Indiana during the panic. In all the western and southern states its notes commanded a premium, and in the east were taken at a small discount.... Its loans were made in small amounts and scattered all over the entire state, thus affording the greatest possible measure of relief." Great as was the success of this splendid institution, the Jacksonian democrats, coming into power, at once began an assault upon it, precisely as their leader had laid the axe to the roots of the United States Bank. The Indiana democrats failed to destroy the Bank of Indiana, but succeeded in passing a general banking law permitting banks to be established upon filing with the auditor of the state the bonds, or other evidences of debt, of the Federal Government, or of any of the states, as security for the notes to be issued. The State of Indiana itself went into the business of issuing notes, and even plank-road companies issued them. The Indiana state notes could be had for sixty cents on the dollar and were called "Red Dog." The plank-road notes and others of similar value were called "Blue Pup."