The daily union., 1846-06-26

ton, when subscriptions 10 the capital stock were
being received, he concluded to take portion Of IT,
he supposed il TO be fine opportunity for invest.
ment He had provided himself with the means TO
take nifty thousand dollars worth of the stock, or
more The charter required that the capital should
be paid in in three nstdments: one at the organize
ton, or at tho election Of officers the second in six
months; and the third IN six months thereafter. On
the hrst lnstslment if mistake not il was required
that hye dollars should be paid in gold and silver,
and the balance IN U. S. six per cent stocks The
other TWO nstame were to be paid in proportions
OF ten dollars ofsPece, and the balance u S. stock
Asthe time approached for paying in the first in
stalment, specie and the per cent stocks advanced
IN the market; and M Thomas says that, sup
posing st further advance might take place, and
thai might be difficult for him to procure the sort
Of funds required by the charter to nav the second
and third instruments he declined take any Of the
stock. But he says that those who understood the
matter better Than he did, who knew how il was 10
operate, and what were the gambling, fraud, and
tIiekery which were to be practised upon the peo-
pie In the establishment of the bank, took immense
amounts OF the stock-one hundred, two hundred
three hundred thousand dollars worth, and even
larger amounts; knowing that they would have the
power, under the charter, 10 elect directors in pro-
portion TO the amount of stock for which they
subscribed, and that consequently the large stock
holders could elect directory subservient to them
selves. The stockholders who took but a small
honestly, did pay up, according to the requistons
OF the charter. But the large stockholders who en-
tered on deep hgure, managed by some means to
get the requisite amount of gold and silver and
United States stock TO pay up the first nstament
The bank was opened the ofncers were elected, and
It went into operation. And when the next install
ment fell due, the large stockholders who had elect
ed the directory called upon them to loan out to
them, on discount, the specie and United States
stocks which they had paid IN as part Of the first
lnstalment. This was done, and the same operation
was repeated in the third and last payment IL this
statement Of facts is correct-as do not doubt il
s-then the conclusion is clear TO my mind that the
bank never did, in any one hour Of its existence,
possess the ability TO meet its Liabilities, and to pay
its debts, as the charter required.
And this is the history of all banks. | have never
voted for a bank charter But in the State Of Ten.
nessee they have made banks-some stock banks.
They were an improvement on the old stOck-note
system which exploded in lSl7-l6 and they re.
qured that the stock should be paid gold and sill.
yer. Was this done No; but when the books
were opened, and person came TO subscribe for
the stock, he would say, IL have not brought any
gold and silver" Those having the management
of the affair would reply, 1T does not make any
difference; subscribe. The managers at Nashville
say that gold and silver is not necessary. Pay us
in the notes of speclepayng banks; and il our bank
when 1t goes into operation should require specie,
she call the bank in whose notes you pay,
and get specie for them" In this way the first in
stalment on the stock of these banks was paid in.
How was il subsequently, The banks issued a
call for an lnstaIment Was that instalment paid
IN gold and silver, as the charter requredi In some
cases II may have been so but in many instances
the stoc kholdeTs got their discounted in banks
the proceeds Of these notes were passed to their
credit on the discount books of the banks and then
the stockholders gave check to the clerk on the
other side OF the room for the amount they
| called the stOck The clerk tOOk
the check, gave the stockholders credit for 30 much
paid on their stock account went to the discount
| book, and there charged them with the amount Of
! the check paid this day, and thus the books were
| balanced. Others paid in the notes of the bank
And the people found two dollars of this paper cur
| rency put in circulation for every dollar Of the
stockholders notes, and bank notes paid in capt.
| tai stock.
| We have another, which is said to be the peo-
ple's bank 1t is all lie In the whole history Of
paper money, there never yet was a bank made for
| the people, or for their good And there never can
be, nor the interest and welfare Of the people
| ever be promoted by such means. How was this
| State bank to be made? For the people--it was
to be owned by the State, and all its profits were to
enure to the good of the people 1t went into oper
alton in 1888. 1t commenced business in sus-
pended state; and when individuals borrowed the
notes of that bank, payable twelve months after
date, its paper was from s to 10 per cent discount
II had no specie which to issue its notes. 1t had
the surplus revenue deposited with Tennessee by
this government, then in the stock banks of the
State, the school fund.- and some State bonds, the
issue of which had been authorized. The president
and one of the directors Of the bank took trip to
New York. They there fell in with FIRE insurance
company, agent Of the celebrated Bank of the
United States. The president apd. director of the
| Bank Of Tennessee negotiated one million Of these
| State bonds with the fire insurance company, for
which they received not dollar in SPECIE but Gre
| m tho hnpL ,f han, f.. 81.
funds of these bonds. The president and director
tooka certificate Of deposlte, returned to Nashville
| SGT the bank IN operation on this one million cerf
cate, issued two millions upon it; these very notes
being then at discount of per cent. What be
came Of the million of dollar bonds' Did we even
get dollar for them No; but the Bank Of Ten
nessee had credit at Mr.. Bddle's bank for the
amount Mr.. Biddle sent the bonds to his agent in
| London or Liverpool, Mr.. Jaudon, who sold
or hypothecated them there, and thus Mr.. Bidde
enabled to draw upon England. When the mer
chants Of Tennessee, who had gotten an accommo
dation at the Bank of Tennessee, or who had re-
celved Its notes in payment Of debts from their
toners at par, desired funds in Philadelphia, they
applied to the Bank Of Tennessee, and procured
| checks on the bank in Phiade phia, paying for the
same in Bank ofTennessee notes at discount Of
| or 10 per cent. When they arrived in Philadelphia
they either paid for goods previously bought, or
bought new goods, for which they paid with these
drafts. The drafts being then in the hands Of
the wholesale importing merchants Of Philadelphia
were by them exchanged with Mr. Bddle for drafts
| on England with which they paid for former i'm
portations, or paid for cargoes of goods, and
impaired them into the country. And thus the i'm
| porting merchants brought into the country one
million dollars worth of goods for the million
| of Tennessee bonds The bonds are now out We
are paying per cent. interest upon them. They
have thirty years to run. At the end of that time
to say nothing Of the cost of collecting the interest
we shall have paid one million eight hundred thou
sand dollars by way of interest, and we shall still
| owe the original one million of dollars.
This issuing of bonds by the States, in my opin-
ION, Is the great cause Of the expansion which took
place in the years 1886, 1887, and 1888 The States
were mad upon issuing their bonds. These bonds
went TO Europe; not a dollar of real money found
it's way back but, in lieu, we took the fabrics of
England. We received them, not in exchange for
our productions, but for evidences of debt against
the States. The goods worn out; the people
are still paying interest on these bonds; they will
continue to do so for years to come; and then they
must finally pay the principal. This is the way, in
part, in which the Bank of Tennessee was brought