Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-16
SUSPENSION OF THE BANK OF TENNESSEE
ANOTHER WRONG UPON THE PEOPLE.

injurious in its effects. From the fact of its being
State institution, it had obtained hold upon the
confidence Of the people greater than that of any
other bank, and in the midst Of the general unessi
ness its notes have been sought for by the abOring
people of the country their greatest security in
these uncertain times. 1t has been but few weeks
since meeting Of our me rchants and business men,
who, very naturally, were more anxious to provide
accommodations for themselves than to see the banks
pay their honest debts held meeting in our city
and passed a resolution requesting the Union,
Planters and State Banks to suspend, 1" in order to
give timly aid 10 their customers and debtors" the
very policy which tie Bank of Tennessee has now
adopted. The proposition was then declined for
reasons and in manner which we thought worthy Of
the gentlemen who controle that institution. Col.
johnson published q card to the world in which
ne said;
Z" The Bank Of Tennessee is able and ready to
meet all demands against it s0heHeUeT and hOioeUer
made and would moi, therefore, be justified or ex-
cused for refusing payment of its notes when de-
manded."
If the Bank of Tennessee was able to meet all de-
nsnds against it, whenever and however made at the
beginning of the crisis Of course it is equally able
now, as she has been every day preparing for the
shock We conclude therefore, that its officers have
thought proper TO close its vaults and dishOnOr its
paper from some other cause than inability TO pay.
With such an acknowledgment before them, their
reasons, whatever they may be, not likely
10 satisfy the indiscriminate public whose pockets
are encountered with their deprecated currency.
This is not the first time that the Bank of Ten
nessee has suspended, and if it is continued as
not be the last. Our present financial policy is but
another mode of gambling, and the game, though
4 large one, must necessarily have end every
few years, when all the cards are thrown up, re-
shued and dealt over again for another hazard and
another loss In 1889, under precisely similar cir
cumstances, the Union, Planters and State Banks
went by the board, and were for three years sus-
pended. That she reader may understand the his
tory Of that suspension, its deleterious effects and
injury to the people, and comprehend thereby what
may be anticipated from this, we make the follow
ing extract from the able message of Gov. Jas. X.
Polk, TO the Legislature in 1899. After having
shown the causes of cur troubles to have re-
suited from an inflated paper currency, starting first
with the banks of the Eastern cities, he says:
Upon the receipt of the information that some of
the Banks at the east in little than year from
their last resumption had again suspended specie
payments the question Immediately in the pub
lie mind what had produced the suspension, and
what would be the course proper to be pursued by
the Banks of Tennessee!
AS far as informed the suspension at the
east is represented to have arisen mot of lack
of power TO continue specie payments, but OF self
preservation under the form of keeping the specie
from being drained out of the country" Without
the means Of knowing how the fact may be, it is
confidently affirmed that there can be no apology
for suspension of payment by the Banks, but
absolute inability to meet their responsibilities
promptly.
And whatever may have been the cause of the sus-
pension of payments by the Banks the east it can
furnish sufficient ground for the suspension of
payment by cur Banks so long as they have abl-
Sly 10 pay. Like individual debtors, they should
meet they liabilities honestly and promptly as long
as they are able to pay. What is the effect if
contrary course be adopted? A few of the Banks
the east suspend and represent to the public that
they are still solvent and do So from necessity
but TO retain their specie; and, following their
ample the Banks in the interior which are also rep
resented TO be solvent, suspend also, not because
they under the necessity to go, but simply be-
cause the eastern Banks have suspended So that
the suspension of the Banks in 8 single city which
may have INDUCED in excessive issues of Bank paper
and Bank credits, and thus stimulated and promoted
over-actiou in trade or which may have Interior OBJ
1ecLB IN VIEW - lhhue 70 as suspension
payments by all the Banks of the country. Surely
if bank suspend in Philadelphia, it is no reason
fer banks TO follow the example unless they
compelled by their condition to do
The apprehension Of the drain of their specie can
be no sufficient reason for of the conditions of
their corporate privileges is that they shall keep
themselves at sll times in condition meet their
liabilities. When a suspension Of specie payments
takes place by banks their circulation Immediately
depreciats in value, and the loss falls not on the
hanks but on the people The labor Of the country
bears the loss whilst the banks during period of
supervision often doing their most profitable bust
ness II was hoped that the Bank Of Tennessee, Of
whose ability pay specie no doubt is entertained,
whOuld continue 10 do so. She did pay day after
qhe Union and Planters banks had suspended but
I regret 10 say finally yielded TO the panic around
her and stopped not from inability 20 pay, but as
measure OF prudence. Her course is much to be
regretted, and early resumption is in my judg-
mem demanded by the interests Of the State. BY
maint shining firm stand, honestly meeting all her
engagements and at the same time extending to her
debtors every possible Indulgence compatible with
her safety her character as State institution Of
doubted credit viii be maintained, and to the extent
OF her means TO furnish, q sound currency will be
preserved. In the future management OF that in
titution owned it is exclusively by the State, and
supported by the credit of the State, il should be
cardinal object, constantly kept in view, 10 Genuine
her operations within her means 10 meet her respoR
PAVAiAeAtS W az ga 'NS nv
circulation in a sound state.
No one can fail to see how admirably suited these
remarks are to the present time. Gov. Polk could
not justify the suspension then and if he were liv
ing would not justify il now. The same argume nts
which he advanced against such policy at that
fine are precisely applicable now
Two years passed by, and contrary to Gov. Folks
reccmm endstiOns and to their own pledges these
banks were still suspended. Therefore, in his Mes
sage to the Legislature Of lS4l, he again treated
the subject 81 follows. Let the members of the
present Legislature learn wisdom from and take
warning by his suggestions:
1t was hoped and believed when the banks of the /
State suspended the payment Of specie second time
near two years ago. that II would be of temporary
duration In the reports made TO the General As .
semby al its last session by the Boards of Directors
of the Union and Planters Banks, assurances were !
given that they were fully solvent that they would
he prepared 10 all their liabilities at an early
day and that they considered their suspension as
The General Assembly having adjourn
ed without any legislative action the subject re-
O,ea 10 say that all the banks Of the State, except
the Branch Of the South Western Rail Road Bank at
Knoxyille still continue In suspended state II |
he uestion of resumption he left to the voluntary
ction of the Banks. this state Of things may con
;,,o for an indefinite period OF time. Andthe uues-
ton arises whether the duty does not devove the
General Assembly, the immediate guardians of /
1be interests of thepeoPle TO adopt suitable measures
= Ii, rr,sent session. requiring those institutions
20 return , TO cash payments Whilst the suspension
otines the tax upon the active industry and labor
of the state. imposed by the depreciation Of their
naDer Issues must continue 10 be Dolne, ana whilst
~ neonIs are suffering the loss of the amount Of
this dePrecioon, as they have done for the last two
-1esrs + is Understood that two of our principal
stock Banks (the Union and Planters Banks have
-, -. n n. etortbolders This is SO mani |
1es,iy improper, that am constrained by a sense OF
duty to bring the fact to you rotice. frncPies o.
common justice require that tLey should pay their
debts to the community before they SiYlde prel's
among their owners.
During periods Of suspension, Banks, oSned by
ndfsidual stockholders, tempted by desire TO en-
arge their profits, often unduly extend their bush
less and generally at the expense Of the eemmuni-
v in which they exist. There is no sound pTinci- |
~ II. Il I