Nashville daily patriot. [volume] (Nashville, Tenn.) 1855-1857, 1856-02-05


The Free Ranking Law
We publish below the most important
features of the bin amendatory of the Free
Banking Law, which passed the House Of
Representatives on Thursday last, on its
final reading. by vote of 40 to 16. A
bill bad previously passed the Senate to re-
peal the Free Banking Law, and had been
transmitted to the House before the action
of that body upon its bill. We may,
therefore, regard the sentiment of the
House as opposed to the repeal of the
Free Banking Law.
The House bill, as viii be seen, throws
some very stringent restrictions around the
business of Banking, and fit becomes a law,
viii secure a still better and safer crculat
ing medium than our Free Banks. now fur
nish. The object of amending the present
law was to prevent the establishment of
what are known as Exiting" or "wild cat"
Banks-institution which are established
without any basis upon which to transact
a safe and healthy business, and the amend
ments proposed viii certainly effect that
object
1t is urged that repeal Of the free
banking law, would cause the immediate
winding up of all the Free Banks in this
State; if this would be the result, it would
be a very injudicious step, as the closing up
of these institutions would throw upon the
market very large amount of the bonds
of the State to be sold without reserve to
the highest bidder, and this would necessa-
rily operate to bring the price of State
bonds down to ruinouSly low rate to the
note holders, and also prove seriously det-
rimental to the credit of the State. These
considerations unquestionably exerted an
influence in determining the action of the
House
The first section provides "That no Bank
shall hereafter organize under the Free Bank
ing Law OF this State, passed February II,
1852, until the sum of one hundred thousand
dollars, of the lawful currency of the United
States of America, is bona .Jfde subscribed and
paid in, aud for this purpose, the Governor OF
the State shall appoint, on application for or
ganization, five commissioners, residents of the
county where the Bank is to be located, whose
duty it shall be to open books, receive sub
scriptions, collect the mOneg, and hand over
the same TO the Treasurer and Comptroller of
the State, under whose superintendent tie
bonds shall be purchased
The third section provides, "That shonld tbs
bonds of this State, OF. any other bonds author
Used to be used for the purpose of banking, de-
cline and remain below par in the city of New
York for thirty days, as shown by the sales at
the stock board in that city, it shall be the duty
of the Comptroller, and be is hereby authorised
and directed to retain the interest which has
or may accrue on such bonds as are deposited
with him, until such an additional amount of
bonds are deposited as will fully make good the
par value of said bonds"
The fourth section directs the Comptroller,
in the event of such depreciation, to notify
such Banks as have the deprecated bonds on
deposit, aud upon their refusal or failure to
make the required additional deposit of bonds,
or return and surrender an amount of their
circulating notes, equal to the depreciation on
the bonds, within sixty days after the service
of the notice, to proceed to wind up such
Banks.
The fifth section provides "That no Bank
shall hereafter organize under the Free Bank
ing Law of this State, without at least ten
bona tide stockholders, who shall be residents
of this State, and said Bank shall not at any
time contain a less number than ten, and
majority must at all times be owned, bona tide,
by actual residents of this State, and it shall
be the duty of the Cashier or President of all
Banks doing business under this law, to report
under oath, in the semiannual report, the
name, residence and amount OF stock owned
by each ckholder.N
The tenth section provides that should any
Free Back ."fail to redeem its issues and have
10 be wound up, any person or persons having
one thousand dollars of the notes of said Bank,
may present them to the Comptroller and re-
ceiVe from him in lieu of said notes, one thou
sand dollars of six per cent coupon bonds, at
the New York value, provided that the same
is not under par"
The eleventh section provides, that all per-
sons exercising the privilege of banking under
the provisions of the act this is intended To
amend, shall not be authorised to discount or
shave notes, directly or indirectly, st greater
discount than the other Banks are allowed un
der existing laws" &c.