Vincennes State Historic Sites: Old State Bank

Officially, the Old State Bank is managed by the Vincennes State Historic Sites, but stands several blocks removed from the campus of main buildings that the Vincennes State Historic Sites administer. Docents at the log cabin visitor center can provide tours of the bank.

Honestly, there is not much to see. The bank stands empty, an odd space filled with large columns in the front room where in the days of the bank, tellers interacted with the public. An echo precludes the use of its space as a meeting room or event venue.

Placards explaining the early banking system fill the space. I never really gave the early banking system much thought, though vague memories of rudimentary learning in grade school surfaced. Early banks weren’t quite the, ahem, reputable places they are now. They were worse. Dens of corruption, it seems.

Officially the Old State Bank helped transform the Indiana economy from a fur-trading one to an agricultural one. In reality, the early bank was not for the average Joe on the street.

In 1813 the Indiana Territory chartered not one but two banks to produce currency for the state. By 1823, the two banks both folded due to financial difficulties and Indiana was back to relying on a federal bank for its currency. In 1832, President Jackson vetoed an extension of the charter for this federal bank and it folded in 1833. No federal bank = no federal currency. No federal currency = states needed to produce their own currency.

Desperately in need of cash for its own development, on February 13, 1834 the Indiana General Assembly chartered a Second State Bank of Indiana. In November 1838, the bank moved into the Old State Bank building that I was touring. The bank issued paper money, which helped finance the state’s debt for development projects and spurred enterprise.

The bank’s charter was extended until 1857 when the Indiana General Assembly didn’t renew it. The bank took until 1858 to convert the state currency to the federal currency before closing its doors. Indiana was back to relying on federal banks for currency.

Weird to think that states issued their own currency, or that state banks existed to serve the wealthy and enrich them further. (OK, maybe that last point isn’t so weird.) Corruption and fraud stained the early Indiana state banking system. (And probably every other early state banking system. Let’s face it. No regulation and ruled over by the independently wealthy does not make healthy banks.)

The Old State Bank is interesting to visit, if only for the information gleaned from the placards and the wealth of information from the docents. And it is always neat to step inside the walls of historic buildings.

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