Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1857-10-21
The Consequences of the s~aspsrU!'a.

Fer the Memphis Appeal
l. LAY be disastrous to the business and
prosperity Of Memphis Let US see bow.
OHe chief cause, if not the very principal
cause Of the growth and prosperity OF our
city, has been, that the planter and srner Of
the surrounding country has found here a q mar
ket where he can sell under bis own eye, the
cotton which be produces. Of course, selling
bis cotton here, here be buys the supplies Of
bis family and farm. These two branches Of
trade 90 very much together-and together
they have created here a vast commerce. Let
the cotton Of The country be shipped for sale,
on the growers account, at New Orleans, and
at once is transferred to New Orleanu, much
OF the trade here ia supplies, for family aud
plantation use. Persons living here in former
years and familiar with the history and course
of trade, will readily remember, that in those
times, the trade in supplies was largely done
in New Orleans; and Memphis was little
more than a mere shipping point, where 2 few
merchants only were required to coniuct the
transit of the products OF the country cat aud
Of its supplies in. Il takes bat few merchants
to transact all this business.
To understand the danger We are now in, let
US recall to memory the course Of banking and
commercial operations in Zoe period OF the
former bank suspension OF 1s3T-1s42. The
currency Of Tennessee stood at discount, in
comparison with coin, through much of that
period, between 7 and p per cent. Ina banks
Of that day were, the Bank of Tennessee, The
Planters, toe Union and the Farmers aid Mer-
chants Bank Of Msnphis, and there was 10
Inference in The ve.re Of their paPer, Unless a
little in favor OF tie Farmers and Merebants'
Bank. This latter and he Union wastbe only
Banks taFing officers in Memphis, and Dir.
Seth Whsstly during most Of the period was
the President Of the Farmers and Merchants
Bank, aud enjoyed most desergedly The entire
confidence Of the city ana country, both as to
his integrity and haaHcial ability.
The bank currency was under par, generally
about 8 per cent, sometimes lower. This cur
rency was issusd in the purchase OF bills On
New o-leans, at which place its currency was
upon par with coin. 81 Memphis, the cotton
was paid for in Tennessee currency, at
- CAiNai5 IA NA9 N4AAeANN u mat
place, and at both places at very nearly
tie same nominal prices. Cotton was paid for
at Memphis in Tennessee currency, at, say, ten
cents per pound, and in New Orleans in the
currency Of that place at, say, sometimes over
ten cents, enough for a margin to cover freight,
insurance, sc, and a reasonable profit. Thus,
the cotton Was sold at New Orleans for coin
and paid for at Memphis in Tennessee bank
notes, and 50 the planter actually 60. Tor bis
cotton some 8 to y per cent. less han it
was sold Tor in New Orleans, aud this because
Of the difference between New Orleans currency
and Tennessee currency.
How did this operate with the Tennessee
banks? They pu. out their currency for bills
on New Orleans, and according TO the varying
rate of exchange, gave a little more or less Of
their notes for an equivalent amount Of bills
say about $1,000 Of their notes for a bill on
0eT Orleans Of the same amount 81 900.
When the bill was paid in New ofisaus, the
bank had their $1,000 of coin, for which thad
given, however, about s1.O0O Of its notes which
had been put in circulation, and for which the
bank was liable 70 the full extent Of $1,000.
How did these bank notes get back to the
bank and the bank thus disehargO its liabilities
to the hOldsIs Of thsn2 TIE proeseds Of the
bills in New Orjsans, Of par with coin, were
transferred by tbs bank to Philadelphia or
New York, and TINS became a fund at the
North, on which the bank could sell to she
merchants Northern Exchange.
The plentsr paid bis Tsnnessee bonl rotes
10 his merchant whom be owed, and tbs msr-
chant owing for his goods 81 the North, bought
from The bank TIE Northern EKchaBgs, and
paid fer 1t to the bank its own notes or tbe
notes Of any other TsnHsssss bank, which was
al the zane thing.
Here Law nos. Ct the profit which the banks