Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-12-17
BANKS AND BANKING.
2 FALA PKS ORHP- KHITTHORNE. OF

BANKS AND BANKING.
REMARKS OPHR. WHTTTHORNE, OFAA URK,
Delivered in Committee of the Whole, IN the Senate
of the General Assembly of the State Of Tennessee,
Tuesday, December 3, 1857, pending the COnsidera
tiOn of the bill, No So, reported By 4r. W4LR-
Err from the JOINT Committee on Bd,nhs and Bank
ing.
Mr. WHITTHORNE said: Mr. Chairman-Intend-
ing to introduce bill in lieu of the one now under
consideration shall make such remarks upon the
general merits of the question, as in my opinion are
necessary. Andfrst word to my democratic friends
am satisfied that, look at this question of the cur
rency may, that out of 1t, there is grave is
sue to be found We may administer opiates, which,
give relief perhaps for the moment, serves only to
proong the disease. Yet the "disease" existing the
tile question of a sound currency still remains. A
question that will divide and distract parties all
the country, and in my opinion b come the leading
issue Of the canvass of 1860. The great interests
of the people, not only of Tennessee, but Of the
world, demand a currency of uniform value; With
out which, We must be constantly disturbed by re-
WILSON'S in the money market, induced by bank is
sues paper expansions c0ntractions and suspensions
results that folio the present banking system in the
United States, as inevitably effect follows cause
Though young man, Mr.. Chairman, can remem-
Der When a party In this country, favored United
States Bank, q remedy for evils like those
have now upon US. With increased force, will the
arguments in favor of United States Bank, be urged
upon the people. The Democratic party, true to Its
ancient faith, will have these arguments to meet,
and it cannot shrink the responsibility of furnish
ing the people with a sound currency-and there
can be but one sound and safe currency -that is,
MIR Chairman, hard money currency IN which di
reetion we, of the Democratic party, must turn
steps.
Having presumed this much, let me enquire, Mr.
Chairman, what induced the present crisis! The
answer, without doubt, is the banks The multi
piled number of these institutions, expanding and
contracting. have draped this day with sorrow for
US, and threaten to Overwhelm all the interests Of
our country with ruin.
Sir: Yesterday, to the farmer, earth had yielded
her fruits and harvests in abundance; to the labo
rer, the mechanic and artzan industry had brought
Der rich reward. Is that all the great interests Of
the people were prosperous-al was quiet, happy
q I'd seemingly secure-but to day; how looks The
picture? The fruits and the harvests, the products
of labor and industry, valueess, and the scene
of happiness has passed away, and one Of ruin and
bankruptcy is given to view. To the uneon-
scious people, thisgreat wrong came uponthem like
the peal Of thunder in a clear sky.
l have charged this great wrong upon the banks
of the country and why? Because, in their substi-
tuition of paper for coin, as a circulating medium,
they have driven from circulation the only fit and
representative of the capital and Ia
Dor of the country. The record shows near fifteen
hundred incorporated banking institutions, author
lied to create, not capital not money not a repre-
sentative of either of them, but substitute; each
one rivals of the other, yet intimately connected,
that if fails, the others must do likewise. And
hr Chairman, periodical revulsions necessarily flow
from such banking system, since, whenever a de-
maud Of settlement Is made, the substitute will no.
answer, but the actual must ceme and having driven
The actual away by issuing the substitute, suspen
ensus. Let US look at this ques-
ion fairly. bank issues its paper, what is it? |
60, Mr. Chairman, to its counter, have my note, |
we'll endorsed, discounted for $l0 00O and receive
not money, but the promises TO pay of the bank, |
n other words, we swap credits, l take the promi-
'es TO pay Of the bank and pay the farmer for his
corn, his cotton, and he passes them into general
among the people, where by the policy
II your laws, they pass as mOney-sO passing as
money, they drive from circulation gold and silver
md become the reward and compensation Of the la
yer and industry of the country Being so easily
made and manufactured, they are multiplied, and
,lVen to others upon the same conditions which |
ave received them, and thus travelling from hand
o hand, regulates the price of every commodity, |
avlng become its circulating medium. Suppose
gu, now sir, tina; through my failure, or from other
auses, the bank fails does the injury stop with the
ank or with me! No. sir. 1t prejudces capital,
nd robs the industry and labor of the country of
IS proper reward. Again, sir, let US trace the sys-
EN- back to the beginning, bank is incorporated
18th capital of, say $l,000,000 paid in, if you
hoOse, upon which the promises to pay of the bank
re issued to the extent of from $4,000, 900 to Sj-
co. 900, upon the calculation Gifts owners, that the
DIN in its vaults, with current payments from its
ebtOrs, will enable it to meet promptly all demands
ade against it. This is the first calculation on
lances The next is, that having deposits made
it'll it, that they will discount thereon, calculating
lat they will have much Of deposits paid in, as
eposits paid out The private and individual in
rest Of the owners of these institutions, Of
nd nntr . air how |
creased and multiplied they are forced to compete
18th each other. Competing with each other, and =
1Verned thus, they speculate and profit upon the =
lterprlse and labor of the people, caring not for
e consequences, they but enrich themselves.
An such system be beneficial to the interests Of :
e people? Willsny Senator refute the argument? !
none can, then will you uphold and sustain it. I
But, sir 60 step further in examination of this
Iestion and ask, will banks of issue ever be able
supply the demand for money, required by trade
ID commerce? This is an important question the 3
lole theory of banks and banking rests upon it, G
axe the negative and assert, that the system must
il-that such banks never can supply healthy a
'culating medium, suitst to the demands OF trade
d commerce. 1t is the legitimate demands of
ade and commerce that has to-day, demonstrated i
truth Of the proposition l maintain. 1t is be- II
use we are, people in debt; it is because we D
We bought and must pay, and our bank promises c'
pay, would not settle the balance against u.s. and e.
have demanded of the banks the redemption of al
cir notes. and they have failed TO the demand 70
money, thus made by the trade and commerce OF 10
q country. They cannot do it. -
For example: Here in Tennessee the sum of five "
lions of money is required to do the trading of NJ
nnessee. Suppose you authorize bauk with that IN
ount Of capital; and the bank taking their five W
lions OF stock, issue their paper upon it to the HI
ount Of ten millions. Does that add anything to 10
. mOney-to the real circulating medium of the W
lntry! Ia my opinion it does not, and why? Be. PC
lse the first effect Of the paper dollar is 10 drive 10
OF circulation the gold one, and you multiply 81
lr paper circulation you drive out and retire the ev
ID and silver 1t goes, il the first place, into the 60
ut OF the banks; in the next ice, eld back mi
the people; and the next place, 1t goes abroad GU
ere gold has the most power Two circulating be
uums can not exist in the same country at the ha
ne time The currency which has really the most 60
ne, will go where 1t is more respected, and the
iitioR made to the circulating medium only in to
asses prices. But the proposition is that bank fer
Der cannot supply the wants of trade and COM no
rec. You issue your Sl0,000,000 What is the ro
effect Of this? 1t is to drive out the gold and ro
lieu of it, you have your ten millions of paper me
it now to the candid and serious consideration of his
ry Senator; when trade and commerce demands OF
lement of her balances, will your paper money Of
? This must be answered in the negative.
iut we go upon the idea, that can take this Inc
er and 90 the counters of the bank where 1t Ina
been issued, and demand and obtain the gold Wh
u 1t. But, 10, and behold! suddenly the balance a.
rade is against US. What is the effect? The lln
hands OF trade are not for our paper, but for lie
L Suppose go to the vaults of the banks and mIl
" out their gold every dollar you draw from teD
induces d contraction of her issues When IRA
draw TWO hundred dollars in gold, she must re- Ter
eight hundred of her paper. When you with yO'
W Two millions the banks must withdraw their gas
ii millions; and when you have done that you ien
. bsnhpPtsd your State, and impoverished eve. HlS