State Bank of Indiana

City: Indianapolis

County: Marion

State: Indiana

The Indiana General Assembly chartered the State Bank of Indiana on January 28, 1834 in response to the state's shortage of capital caused by President Andrew Jackson's war on the Second Bank of the United States. Modelled after the Bank of the United States, the bank was to consist of one parent bank in Indianapolis and ten branches. The parent bank would have no capital under its immediate authority. Each branch had an initial capitalization of $160,000, the money to be raised by selling of stock at $50 per share. The state would purchase half the shares and the public half. The charter was to run for twenty-five years, with no other bank or financial institution to be chartered or allowed in the state during that time. In February 1834, the directors established branches in Indianapolis, Lawrenceburg, Richmond, Madison, New Albany, Vincennes, Bedford, Terre Haute, and Lafayette. In November 1834, the bank opened for business. The directors added branches in Fort Wayne in 1835, and in South Bend and Michigan City in 1836. Until its closure in 1859, the bank allowed the state to finance internal improvements, stabilize its currency, and promote private economic growth and development.

Jacob Piatt Dunn, Indiana and Indianians (Chicago and New York: American Historical Society, 1919), 1:412-19; Horace White, Money and Banking: Illustrated by American History, 3rd ed. (Boston: Ginn, 1908), 333-38; "An Act Establishing a State Bank," 28 January 1834, Charter of the State Bank of Indiana, with its Amendments, and Other Laws Affecting the Bank; and the Laws on the Subject of the Sinking Fund (Indianapolis: Chapmans and Spann, 1849), 3-34; "An Act Amendatory of an Act, Entitled 'An Act Establishing a State Bank,' Approved January 28, 1834," 25 January 1836, Charter of the State Bank of Indiana, 35-38.