Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-17
SUSPENSION OF THE BANKS.

:
Bank Of Tennessee. According to the programme,
the Union and Planters Banks followed in twenty
four hours Afterwards. We could have wished the
picture rsyersed-that the Union and Planters had
suspended FIRST instead of being permitted 10 shell
ter and protect themselves under the example which
the State Banks had set them. We accord to the
gentlemen who have the management Of the Union
and Planters Banks great credit for the skful
ner with which they played this last card Enseon-
ced behind the bank Of the State bound together in
an alliance offensive and defensive, they feel we'll
assured that the suspension of the former will not
be legalized by the Legislature without extending
the charity those whose only sin has been
to follow the example of their lustrOus predeces-
scr.
We publish in another column carefully prepar-
ed paper addressed to the General Assembly of Ten
nessee, signed by the President Of the State Bank,
wherein we are told that the assets of the Bank
than twice as great its liabilities, and that
it has in its vaults upward Of S747 O00s in gold
and silver, which is more than half Of its entire
circulation The principal reason assigned for the
suspension under such circumstances is that sit did
not appear to the board prudent to stand STILL and
according to promise,) when the Banks in other
States refused TO do sO This is bank morals again
Because one bank refuses to pay, another must re-
fuse, and another and another until general sus-
pension follows. This was not in the bond. Their
fpromise, to pay were absolute and not upon con-
ditiOn According to old fashioned honesty, in the
language of Gov. Polk, Blanks like individual
debtors should meet their liabilities honestly and
promptly as long as they are able topay" Contnu-
ing to quote from that distinguished statesman and
honest patriot, "The apprehension of the drain Of
their specie be no sufficient reason, for OF
the conditions Of their corporate privileges is that
they shall keep themselves at all times in condi-
tion to meet their liabilities. When suspension Of
specie payments takes place by banks their circula-
ton Immediately depreciates in value, and the loss
falls not the banks but on the people The labor
of the country bears the loss whilst the banks dur
ing period of suspension often doing their most
profitable business"
But, says the President of the Bank of Tennessee
if the Bank had declined to suspend and paid oul
their gold as demanded could have granted no ac
commodations to its debtors and best customers.
Here is another specimen of bank morals. The
order that it may continue making debtors. What
would be thought of individual who, acknOWledg-
ing that he had money in his pocket would refuse to
pay an honest debt according to promise, upon the
plea that he desired to loan the money to a third
party? Yet such is the apology Of the Bank of Ten
nessee.
The President further says: ''The partial stop
page of specie payments adopted by the Board, will
enable the Bank TO 20 on with its regular business
and maintain its circulation Most fortunate
Bank If business can be 50 conveniently done in
suspended condition, we see no necessity for re-
Stunning. What is the use of having gold? Away
with the old theory that banks to be able to do asafe
business must be able te redeem their bills in specie
when presented. 1t is now discovered that a non
specie paying bank can conduct its business
and maintain its circulation better than a specie
paying one This singular conclusion is base upon
the reason that when the citizens see the present
condition of the Bank and recoect that the faith Of
the State stands pledged for its liabilities its value
currency in the State will not be diminished
To our judgment there was never mora unfounded
sOPhistry than this, In the first places what is the
present condition of this Bank? The President puts
millions of dollars. What sort of means2 Four
millions of it in ''notes and bills" How much
Of this is good and how much is bad no one can tell.
Eight hundred and ninety-seven thousand is the
stock of two other suspended banks, Union and
Planters 1t would hardly be fair to estimate such
stock at par. State bonds, S6lS,0O0 These are
now quoted in the market at g. cents. "Notes of
other banks" Sl0l, 900. What other banks? Per-
haps the bank of Nashville, of Tazeyell, of Clai-
borne, and of Lawrenceburg are included. "Due
from other Banks" 1928 900. What does this signi-
fy? There is a good deal due frem such institu-
tiOns just all over the country, much of which
will never be paid. We feel no hesitancy in saying
that these assets fall very far short of being worth
what they call for. In the list Of liabilities, the
President inuumerates nothing but the circulation,
deposits Of individuals and the amount due the
banks. We venture that outsiders even can point
to other liabilities than those enumerated. We
remember that when the Stock of the State in the
Union and Planters bank was transferred the Bank
OfTennessee assumed the payment Of certain bonds,
some of which, in our judgment have yet to be can
celled.
But the main reliance of the board to secure con-
in a suspended condition is the assertion that the
State stands pledged for its liabilities. This is a
mOOted question. In the judgment of many, the
Safe is pledged for nothing beyond the amount Of
capital which she has placed under its control BE
this as il may we do not doubt the ability Of lle
State, Union or Planters banks to redeem their pa
per, and have something left besides. The two last
institutions are not only solvent but rich, and we
have no doubt but their suspensions this tine as
the in 1889, will be profitable to them. But
the question is will it be profitable to the people
to note holders all the country who want specie
A banks note is worth no more than an individuals
note, unless it can be cashed on demand There
fore this paper, however solvent the banks must
depreciae in the hands of the holder and it is use
less to say otherwise. True 1t may be on par with
the paper Of suspended banks but it will fall far below
par when tested by gold and silver value and the
nOe-holders must thus be losers for the accommoda
lion of other interests in the community that are de-
pendent upon the banks for further accommodations
What we have said of banks in this aud other ar
tices has been intended in derogaton Of the syster
generally and Of the recent policy OF our domes tic
banks in particular; but never for the purpose of
head Of them, or with any view of Ofendiug their
sensibilities or doing them the slightest injustice
We trust we have not been misunderstood bv them
or their friends. We believe that all banks are
wrong aRdt-e banks in Tennessee in particular and
that they are at with the vital interests Of the
country So believing deem it a high privilege
to war upon them to the knife, and expose their -o
tenness by every means within our power Believing
that we are right, we shall push ahead looliny NOT
er TO the right TO the left
THE FMANcIAL CRIsIs.-Our exchanges from all
parts Of the country crowded with details Of the
disasters in business, consequent upon the present
disturbance of monetary matters. We see no remedy
but tine Itis true, that sound solvent Communities
whose transactions rest upon substantial basis. will
have to suffer for while with those whose extrava
gance and speculation in fictitious securities have
IL