Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1858-02-11
TBNNESsEB LEGISLATURE.
HOUSE OF REPRESENTATIVES,.
TUESDAY, Feb 4, 1858.
N REGARD TO BANKS.
n phmu e,,fiDrad.
M. BATE continued


ready large circulation, by bank paper, to an enor-
nous extent. Almost every farming utensil, and
4 many agricultural products, where transportation
was easy, we're imported. The balance Of trade
/ turned against her Her coin was exported, and
! her banks we're crushed. Her people fed as from
mighty calamity, and in their new homes Of Texas
and Arkansas, as also those that remained secured
themselves, by constitutional provisions against
recurrence Of the evil.
/ specie circulation in the South, furnished by
receipts from the experts Of her rich agriculture
products amounting, probably, 10 mors than those
Of all the mines, would alone be sufficient 10 de-
press her manufacturing labor; but with bank cir
culstiOD added, it must annihilate, not only her
manufacturing, but her labor in many agricultural
products 1t viii divert her labor from her white
] population and degrade and cOnfue it to the reia
ton Of master and slave, and weaken Ter phy slea
! and political strength in the confederaey-
The circulation Of the fourteen hundred banks OF
the United States have increased their cost OF pro-
duction above that Of England The u states import
more from than they export to England The cost Of
producing in India and China Is less thanIn England
and England imports more from, than she Is able to
export 70 them The balance Of trade between
England and the East being in favor Of the latter,
/ she must export q currency Of universal value 10
/ pav China it, England having balance Of trade
against US procures coin to pay it. The higher
circulation Of California enables us to exchange
/ products for her coin This we ship TO England,
] and England TO the East out our imports exceed
our exports including coin from California. We
then apply 20 our banks for the balance, and not
having sufficient for the demand, they contract and
suspend, causing distress and misery throughout the
commercial world.
Such have been the effects Of the banking sys-
TEN throughout our country, AID as the banks in
crease, they must produce these revuions at shorter
periods. The evil belongs to its power of ineress-
ing the circulation, and applies TO q United States
Bank as well as to Stock, State, or other banks OF
circulation. Nor can any remedy be found in tariffs,
or other restrictions, as experience has demon
strated
The expansions and oOntractiOns Of a specie cur
rency are but the effects Of the laws that regulate
trade and industry; a bank circulation may be ex-
banded and contracted at the will Of few ndivIdu-
ais, by which prices may be raised depressed at
their pleasure. The fluctuations Of the former are
gradual whilst those Of the latter are sudden and
cOnvUlslve. For bank circulation will cause rise
in products, increased importation, and balance Of
trsde-ths paper cannot, and the specie will be ex
ported And the proportion Of paper to specie will
become larger-say four or i've dollars Of the for
mer to one Of the latter. Then to preserve this
proportion which is required for safety, for every
dollar Of specie exported the banks must withdraw
four or FIVE dollars from circulation. Suppose our
circulation, year ago, TO have consisted OF two
millions Of specie and eight millions Of paper Or in
the proportion Of OF specie 70 four In paper, and
from demand abroad, one million IN specie should
be exported To preserve the proportion, the banks
would have to Withdraw from circulation four mil
lions Of their paper-makIug loss IN our cirGUla-
ton OF half, five millions, when really there
was demand for only one million, or one tenth
Of our circulation. The banks Of Tennessee, during
the last year. contracted their circulation from nine
millions 10 three four millions. Should the pro
portion Of bank paper specie be larger Of course
the contraction WIll be greater and small amount
OF foreign debt be sufficient TO spread ruin and dis
tress through the country.
A specie currency is q cheap currency banS
currency has It's credit upon Indebtedness, and alb
serbs large per cent. from the producing for the
benefit OF the nOu-prOduclng classes. The steady
uniformity of specie circulation, under our cir
cumstances, would tend " produce bits Of calcu
laJIon ana Industry, AID 10 inspire confidence and
credit The Sudden cOHlraUtIOns aud expansions Of
bank circulation raises interest 10 enormous ites,
eKcItes speculation, creates dsIrusl, and destroys
credit
1t has been said that banks might be used to de-
velop The resources OF a country. IL will be recOl
lected that The currency Of State bears TO its
capital a proportion OF one OF the formert thirty
Of the latter Now bank created for the purpose
OF developing our resources, create thirty
times mucn capital as her circulation, or there
would be a surplus OF her circulation pr ,duce
expansion aud It's evils by which those very re-
sources would be depressed. Banks have been
established 10 develop railroad and mineral re-
sources that have almost invariably resulted in the
failure Of such enterprises and Of the banks, be-
side the evils Of expansion Otherwise.
IL frequently SAID, We cannot get along without
banks OF circulation that a specie circulation would
not do tor our purposes. II is laid down by Adam
Smith as n well established principle Of political
economy aud none more true, that a country can
possess, permanently, greater amount circu-
lati0n, than she would possess In gold and silver;
and have shown that ii attemF lung to increase our
capital and circulation, by issuing bank notes. is
rrHn#r. 49,
time, with fifty banks TO supply it, does amount
TO one half Of what should be our Just amount in
specie.
We are now, however, in the midst Of a crisis and
Of bank contraction and suspension. We have
seen that our bank local circulation on the credit
Of a small proportion Of cOiu, with large proper
ZION of individual Indebtedness that the public faith
in this credit enables this circulation perform our
purposes, CT home exchange, Of payment Of home
debts, and our public dues; that this circulation
compOses nearly all We have, and that the indebted
to the banks (by their statements is larger
than this circulation. We we're indebted abroad.
which could alone be paid in exchange, derived from
agricultural products, IN specie; the exchange
was not sufficient and the specie was demanded
the banks could not supply the demand, and would
have been forced to suspend after paniug their spe
Gle. They have suspended without pa ing out their
specie Had they paid out their specie and then
suspended, the public faith would have been i'm
paired in our Local circulation, and it would nave
been incapable Of performing our home purposes
The suspension, then, was necessary to preserve
local circulation, which has now none of the evils
Of expanding the currency of which / have been
speaking and not the effect of the insolvency 1f
the banks. The circulation Of our banks is rather
q secured circulation than a convertible one To
force them 10 resume before our exchanges shall
have paid our debt abroad, they must in the mean
time, resort 10 their means upon which we have seen
their circulation Is mostly based, and collect their
dues, without increasing their habhti by discount
ing, BndfrOm their statements Of lheir condition,
circulation is hardly sufficient to pay them-debls
Will be collected with great distress to say nothing
Of the injury 10 industry IL is said the banks will
be able TO resume by next November OF this nave
no doubt, nor Is this the question. Can they do
without further contracting their circulation, and
collecting, Oppressivey, their dues Without any
law TO force them, they would certainly resume as
II Is their interest," at the earliest period that they
could do so, without distressing the country, Be
sides, the period for their resumption Is the most
uutavorabie TO supply exchange, aud when, likely
u will be most demanded. For these reasons, sir,
voted against the bill that passed the House a few
days since Nor have l been inconsistent. / am
oppose TO all banks Of circulation l believe that
the present distress should be attributed 10 the
system Several weeks since | addressed the House.
aud represented our situation in the coil OF boa
Instructor, and that 1t was our true policy to lie
sill ami not war on IL now, to wait ill it should
uucoll, and then TO strike with ali our power.
There Is but one way that can see, TO get clear
Of our banking system and its evils aud that is for
the people 10 reform their Constitution is pro-
posed by these res. luuOns or by convention, and
provide against the existence OF ali banks Of circu-
AtlOn, al ~ such terms as the sublety Of courts
cannot evade In this, think isinvoIyed the cues
ton whether Tennessee shall rise, by the true ener
gIys Of her immense resources, happy, prosperous
aud great stale, OF waste into premature decline.
The vote was then taken on the third reading Of
the resolutions, with the resulJ-yeas 49, nays Is,
a. follow:
Yeas -Messrs. Algee, Bate, Bayless, Bentley,
Blackburn Bradford, Brsz ltOn, Caldwell Cantrell,
Carter Of b, Copeland, Davidson, Davie, Dunlap,
Estes, Futon, GaumO4, Golsduy, Grifi h., Hamil
Ton, Johnson. AGENCY, LAcAey, Lamb, Lloyd, Low,
MIris, Mickey, Newman, Richardson, Rose Rowles,
S. John, SChmI. l0u, Seuter, Smart, Stovau Sum
mers, Taylor Thompson, Tuner of s., Williams,
Wilson, " hire Of X, and Wood-45
Nays - Hessrs. Beae, Benton, Carter of C Dob
SON, Dodson Ewing, Frazer, Holmes. Iyle, King.
Ncwbern, Raud pm, RoulstOu, Renshaw, Saunders,
Shress bury, Whit. Of h., and NaugAn-lS
Mr. DOBoON when his name called, said he
would like vote for that part Of the resolutions
having reference to banks; but for him 10 support