Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-27
For the seven years
Or, one per cent annually.

VI Out per Ctllt Aluually
Permanent loans on mortgages and the like are
not included in the above estimate, AS they are no
usually influenced TO any great extent by the ordi
nary fluctuations Of the monetary world We an
peal with entire confidence 70 men of business
whether this estimate does not mainly correspond
with facts within their experience. We do not say
that, with a value money currency there would be
no variations IN the OF interest; but we do al
firm that, with mixed currency. these variations
are grea err and the average rate much higher. And
this, we think, will not be disputed. 1t may be OBJ
jected, by those who know little practically OF
money affairs, that he legal rate of interest being
Al or per cent generally and the greater part OF
all loans being made through banks restricted bv
law, The average rates be SO high as we have
supposed To this we reply, that legal restrictions
a'er the case but little Money always does bring
what it is worth Tor the time belng-law or no Law
aud all attempts to fix the price OF money worse
than augatory
" Il INJURED currency can ReUer be relied upon by
the business community.
This we have already incidentally, shown, if we
have proved sucn currency be vas illating one
but the point is SO important that propose
slider II as distinct proposition. Mixed currency
banks always owe a larger sum payable on demand
than they have money on hand to pay with. They
always promise to pay specie for all claims made up
on them when 1t is generally true Of them that, If
one-halt their debts were demanded at once. they
you'd be obliged TO suspend payment Take, for
These, in October last by official re-
turns had in circulation, S26.544.3l5 so
They owed their depositors, % 437. 256 90
Total Immediately liabilities, S499Sl,572 ~
To meet these, they had only, 4,555.57I Al
-four millions and half to pay fifty millions with
Now, that they we're legally liable 10 be called on
for the whole Of the fifty millions is certain; that
they might actually be called for a large part Of
tins is equally true The amount deposited in banks
is more immedie liability than their bills in crcu-
latOn, for the latter scattered over the country
while the former is generally due those near the
banks, and may be drawn by checks at any moment
anu TO great extent viii be- in case Of an extraor-
binary demand for money
The individual who should owe $4,000 Of Dor
rowed money, for which he was liable to be called
upon al any moment, and had only $4,000 to pay
with, would not be thought in a very eligible safe
condition, yet such Is the position OF most Of the
banks Ia thls country And we ask Is il not true
mat me! are not RELIABLE? We do not say that
they are not SAFE that their promises will not event
ually an pe met; that Is not the present question
Have the business men. the merchants and manu-
facUrers, sufficient assurance thar those bs,s will
afford them al al times the reasonale ,,.,T,,,,,;o
tiou they require The banks profess Ia s,,,J,, tho
community with money; they be dependei nm
on Tor thls Alter having expanded the currency
until they have involved the whole community, -,eoi
" IN depl, and SO raised rces that itreuurt ms nv
times the natural amount of money TO meet the .,
listing state Of things, can the banks continue 10
furnish the sa amount Of currency 10 enable them
10 discharge their obligations. Certainly not: for
As as there is demand on the banks Of Massa-
chuseus-as they were situated last October, and
probably still are-for one million of specie. that
moment they must stop all discounts They are ex-
panded more than 10 to !, including their indebted
ness for deposits, and hey must loan ont nothing
redeem their own bills fast as possible and take
care Of themselves; and should another million be
called for they must contract SO rapidly that ruin
will stare business men in the faces the weaker banks
will begin 10 fail, the sound y banks will be run
upon and, TO save general destruction, there must
be a general suspension. This has happened time
sud again in this country. Most banks chartered
urior 10 1910 have suspended least two or three
times and must suspend many times more in an
equal number of years The Bank Of England sus-
pended in $50 for two years, and again IN 1877 Tor
TWENTY-FIVE years. The Bank Of France, ncorporat-
ed in 1903 suspended in 1913 and is certain sus-
pend again beforeloHg. The banks are not TO blame
Tor this: il is as we have before said, the fault of
the system. But we need not suppose general sus-
pension to show that mixed-curTency banks are not
reliable They do far more mischief 10 the community
when they do not suspend than when they do; for
in the partial cOntracons that once IN every
lew years. they throw all the distress and all the
loss on the public. Unable to accommodate their
customers, they drive them Unto the streets Or
into bankruptcy. That such has been the past his
tory Of this system, We assert that is the legti