The Daily Nashville true Whig. [volume] (Nashville, Tenn.) 1851-1855, 1855-10-18
The Free Banking Law.

The Free Banking Law.
There is evidently an expectation on thepart
of the public that the Free Banking Law Of
the State viii be subjected to revision, and
additional restrictions placed around it by the
Legislature at its present session. We imagine
the public expectation will not be disappointed
in this respect. Though no great ana positive
evils, affecting the community, are as yet di.
rectly traceable to the operations Of this law.
Il cannot be overlooked that there is evi.
dent apprehension. The multiplicity of bank.
Ing houses springing into existence is regarded
as an Objectionable feature resulting from the
law, ana the Importance of providing a check
10 this Overgrowth naturally suggests itself
Too much Of good thing is often worse than
not enough.
At least two or three bills have already been
Introduced in the Legislature to amend the Free
Banking Law. The most important and com
prehensive one, and the one that seers best to
meet and most effectually to remedy, all the de-
fects Of the present law, of those that haveat-
tracted our notice, is the one introduced in the
Senate by the member from Davidson, COL
Johnson. This bill provides, in the first sec
ton, against the one evil to which we alluded,
by requiring that hereafter no bank shall or
ganze under the Free Banking Law of the
State, until the sum Of $4,000 is bona tide
subscribed and paid in for the purpose; and
that the Governor shall appoint, upon applica-
ton for organization, five commissioners, resi-
dents of the county where the bank is to be
located, whose duty it shall be to open books,
receive the subscriptions, collect the money,
and hand the same over to the Treasurer and
Comptroller of the State, under whose super
intendence the Bonds shall be purchased.
Banks organized under these restrictions, will
be banks indeed-insttutions in which the
community, for whose benefit alone banks are,
or should be legalized, will at once feel album
dant confidence. To make this provision more
certain in its results, the bin gees on to make
the withdrawal Of any portion Of said capital,
so invested, a violation Of the charter, to be
punished by an immediate winding up of the
Institution.
Another esuse Of apprehension with holders
Of notes on these Free Banks has been The
fluctuations in the value of their securities,
the bonds of the State, or other bonds endors-
ed by the State. A continued pressure in the
Eastern money market might cause these Sc
curties 70 deprecate to such an extent as to
involve a serious loss TO the note holder, in the
event of suspension. This Bill guards against
tits contingency by providing that in the event
! II "a,
par for thirty days, as shown by sales upon
the New York stock boards, the Comptroller il
directed to withhold the interest which has or
may accrue upon such bonds as are deposited
with Kim until additional bonds are deposited
sufficient to fully make good the par valne Of
the original deposit. The till also makes it
the duty of the Comptroller, in the event above
alluded to, TO give notice TO all such bonds as
have deposited these deprecated banks, and
upon their failure or refusal to make an addi-
tional deposit sufficient to make good the de-
probation. or TO return sufficient amount Of
the circulation TO cover the same, the said
COMPTROLLER is authorized TO proceed to wind
up said bank or banks.
The bill further provides that no bank shall
organize under the Free Banking Law without
having at least ten stockholders residents Of
the State; aud requires a specification in the
eemi-aunual report of the names and residences
of the same.
The above are among the most important
features of The bill, though it contains some
other excellent provisions in regared to the
manner of proceeding in case of voluntary or
involuntary suspension of bank.
This bill has been printed in the Senate, and
will, we presume, be thoroughly examined and
discussed.