Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-16

empt Banks from the mora. and legal obligations
which resi- upon individuals 10 pay their debts.
They are generally compesed Of wealthy capital
lists who have thrown their jontfunds together and
under legislative charter f incorporation, engag-
ed in the business Of banking with view to make
profit They are usually invested with exclusive
rights and privileges which are withheld from the
balance Of the community; and in consideration OF
these they contract certain duties and obligations 10
the public which they should be required strictly TO
perform. The most important Of these is to pay
their liabilities in specie on demand-and recon-
mend to the consideration Of the General Assembly,
the necessity of making suitable provision by law 10
enforce the faithful observance of this well of
all other obligations which they have contracted
Let future day be fixed, upon which they shall be
required to resume, giving them reasonable and suf-
eient time TO prepare to do so, without depressing
debtors In fixing future day for redsumption, the
occasion may be a fit one 10 impose such addi-
tiona restrictions, liabilities and penalties,
perience may have shown 10 be necessary, to guard
the public against future suspensions If the Banks
have violated their charters, the General Assembly
possess The undOubted power TO impose such restrc-
tions liabilities, and penalties, conditions upon
which they may be permitted TO continue the ex-
ercise Of their corporate privileges
TO sanction BIZ silence ana aegEieseeRes Of The public
authorities repeated SaspeasioRS and often for longer
periods Of time, 10 tolerate legahsed fraud upon
The noteholders, inlpoLitic rs unjust. The loss
sustained by the people the depreciation OF Dauk
paper since the last suspension, has been far greater
than the whole amount of the annual tax which they
are required pay for the support Of the State Gov
ernment as will be manifest by adverting TO a few
facts. The average amount Of Bank notes OF all the
Banks of the State-in circulation during the last
Two years-t is estimated will not vary much from
three millions of dollars. The average rate of de-
probation Of these notes during the same period
below specie. has been about 81 per cent, being
sometimes e, and al others at ii per cent. This
heavy loss has fallen upon the peOple-eaeh note
holder bearing his proportion, whilst the Bank
owners, a have seen, have been dividing profits
among themselves.
As far as my information enables me to judge our
banks are believed to be in a solvent condition, and
could, if reasonable time be given, be prepared to
resume specie payments, permanently, without in
convenience to themselves or oppression TO their
debtors. The interests Of the public in my judg-
ment demand il; whilst none Of the rights of the
Banks themselves will be infringed or impaired, if
they shall be required to do SO. Unless efficient Lee
gislave action be had this subject the public
have guaranty at what period the principal stock
Banks may resume for it is fact worthy Of obser
vation hat much the larger portion of their capital
stock it is understood is owned by citizens of the
eastern cities and by other States and however much
the local stockholders may be disposed, from sense
of propFiety and duty, to return TO cash payments
they may, and probably will, be controlled by their
nonresident co-partners, who have no interest in
common with the community in which these institu-
ions exist and who may be cOntented that they shall
remain in their present suspended condition, so long
as they can receive their accustomed dividends.
This is not the first time that we have had a sus-
pension of the Banks for prOracted period in this
State. In 1919 the Banks, not only in this State,
but generally throughout The UniOn suspended pay
menI In 1921, and again in 1923, the General As
sembly passed laws, requiring them TO resume, and
in pursuance of the laws they did resume in 1924
and in 1925. During this long suspension Of five
years or more the depreciation Of their paper was
greater than it is at present, being sometimes as
! great % and 80 per cent This heavy loss upon
the community would have doubtless continued
longer than it did that time but for effective egis-
atve interpostion. AT that time at the present
it was urged chiefly by the Banks themselves, their
debtors and those who hOpedto obtain further LOANS
that it was against the public policy to force or
require resumption, because as 1t WAS said the
specie in the vaults would be taken from the State
and their immediate debtors and through them the
community oppressed.
The General Assembly thought otherwise. They
passed laws requiring them pay their debts under
pain Of losing their charters They did resume and
no such consequences had been predicted followed
And the opinion is confidently entertained, that
such consequences are now predicted would follow
resumption especially if reasonable time be given
TO the Banks TO prepare for the same, but on the
contrary that the public interest would be greatly
promoted by it.
The evil consequences apprehended by many as
likely TO follow resumption by the banks of one
State while the Banks Of the other States remain
suspended, it is believed more imaginary than
real The Banks of New York, and of the States
east of her. it is known did yield to the suspen
sion which took place in Pennsylvania and other
States in her neighbOrhoOd in October, 1889, but
have continued to pay specie and to maintain sound
convertible currency. The Banks of Missouri did
not suspend tme because these of the States,
adjacent to her territory did So but continued pay
specie. In the specie-paying States, the money
market is easy, and there is pressure on the peo
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