Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-10
CONTINUATION.
THE BANKING SYSTEM OF THE STATE OF TEN
NESSRE-THE DUTY OF TIE NATIONAL
DEMOCRACY.

RECONCILIATION Judu uN6 AOlAdIss
We were exceedingly gratihed in our perusal of
the able Message of Gov. Johnson to the present
Legislature, find that he opposed this evil Of our
banking system. His reasons. though brief, are in
disputable. The Democratic position, upon this
point ever has BEEN that the only true and legiti-
mate basis of State or National currency, is gold
and silver; and that under no circumstances would
they tolerate any banking system that initiated
against this fundamental principle.
aIn 1910, Mr.. Buchanan introduced in the Uni
ted States Senate, resolution directing inquiry
into the expediency of amending the Constitution
as to authorize Congress to pass general law pro-
hibing throughout the whole Union the circulation
of small notes. but unfortunately, the proposition
was attended with too many difficulties to be then |
practicable We're such ure adopted, the cur
rency of the country would soon be put upon firm
and substantial basis, far beyond the reach OF any
panic, and permanent and unfaiing remedy would |
be afforded for those frightful financial commissions
to which we have been frequently subjected"
Thus if the present Legislature would pass law
prohibiting every Bank in this State from issuing
any bill of less denomination than So; and suppress
sing the circulation after certain period of all that
have been issued, one of the most prolific evils of
paper depreciation and scarcity of gold and silver,
would be remedied. This Law would, in the place
of one, two and three dollar bills, substitute gold
and silver Sup Sc every individual in this State
had two dollars in specie more than they have at
present. this would give to population Of l,OOO,-
900 of people, hOO million Of dollars, which is al.
most equal to the entire amount of specie in the
vaults of all the banks of the State. One half of
this amount of specie ad led the aggregate of
the banks, and dstribut ed among them, would have
prevented the present panic with us and the whole
amount any revulsion except under the most extra
ordinary circumstances. Again, if every other
State in the Union would adopt this principle, and
the same amount of specie to each individual were
substituted for paper, supPosing our population to
be q 600 OOO this would give an aggregate of S57-
OOO 600 in gold and silver, which alone would pre-
vent any thing like general revulsion, from de-
/ ranged currency.
Again, it is the experience of the States OF
the Union and those of Europe, that the ennis
sion of bills of less denomination than S. has
invariably expelled from circulation equal
amount, of the precious metals; because the paper
| issues of banks have only local, extrinsic and
Auctuating value; whereas, gold and silver, uni
form, intrinsic, and universal value Therefore
the latter will migrate to points and maintain their
value where the former would not be received if so
deemed, valueless.
In England, no note less than fire pounds sterling
| EQUAL to S25 of our money! be issued by the
Bank of England, or by any jOint-stock or private
bank This judicious measure kept the ordinary
channels of circulation so well filed with gold, that
| in an emergency large available amount was al
ways on hand to meet any re action of the banking
system, before any necessity occurred of importing
bullion from abroad. In France, anteriorly, no
bank note was permitted to be issued of less de-
nomin alton than fire hundred francs, equal to S94
of our money! and the entire retail transactions Of
a population nearly double of ours were carried on
by the precious metals Silver is virtually the
reney of France, gold being undervalRed at the
mint The bank of the United States, chartered in
| 1916, and the Pennsylvania Bank Of the United
States chartered in 1886, were not permitted to is
sue notes of less denomination than ten dollars
! The Bank of Missouri in 1886 issued notes Of
| less amount than $50; and prior to the suspension
| of 1914 we are not aware that the banks of any
! State issued notes of less denomination than five
dollars.
| In Pennsylvania law was passed in 1914 pro-
hibiting, By penalty any bank from issuing notes,
or tickets in the nature of bank notes, of less de
nomination than five dollars; but it was not until
December 1920, that a law was passed prohibiting
the circulation of any notes, matter Jy 1rtOm or
by what States issued, within the State. These
salutary provisions expelled from circulation the
miserable shin-plasters only of their own banks
but those Of other States, which deluged Pennsyl-
vania at that time. 1t was after this thai gold and
silver re flowed to this State and her financial sys
TEN was in a most wholesome condition. This wise
experiment of Pennsylvania was followed subse-
| quently by many other States, and would have ex-
tnguished for years to come the shin plaster sys-
ten, had it not been for the general suspension of
specie payments in 1887, which again flooded the
whole country with the issues of small notes and
tickets from FIVE cents five dollars, and this in its
turn again sealed up Their private boxes or peed
from the country the precious metals
Thus we think it is the imperative duty of the
Democratic portion of our Legislature, who are now
the responsible guardians of the wealth and pros
periy of the State, and the felicity of its citizens
to pass a law, prohibiting the banks Of our State
from issuing any bank notes under the denOmi
nation Of Five Dollars, aud at the expiration of a
certain period, suppressng the circulation within
the State of all notes under this amount aohsthsr By
the banks Of this or any other State issued.
The following evils of our banking system, which
should be remedied by our present Legislature, we
will discuss in our next article:
First That no banking privileges should have
ever been granted to any joint stock company, and
if so the Legislature should have demanded the most
ndubitable evidence that the entire capital stock
had been bona fds subscribed and paid in; and the
incorporates had ample ability to redeem their notes
in gold or silver upon presentation and demand.
Secondly: That all banks should have been pro
hibied from issuing any notes unless made redeem
able at the counters upon demand, in gold or silver
and that the mother banks and branches should in
differently redeem their notes in gold silver,
whenever the holder their counters demanded it.
u wi Do