Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1858-06-14


The question we understand to be this ssIs
the State of Tennessee bound to pay out of
the public treasury, to the bill-holders of the
free banks, any loss they may sustain, arising
from fraud or Encouragement of the Comp
trolier?r
The Banner and others who maintain the
affirmative answer to this question, ground
the responsibility of the State, upon the prin-
ciple that the Comptroller is the agent of the
State, and as such, by his acts, can bind his
principal. By an analogy, loosely assumed, to
the case of agencies created by individuals or
private corporations the liability of the State
is plausibly made out. If this sort of agency
is granted, we admit the that consequence con-
tended for. would follow. This seems to us
to be the ultimate and decisive point, upon
which the whole controversy must hang
We think it would be fairly presented in this
form: Can the State, as such, in its legisla-
tive capacity, create an agent, with power, as
such, to bind the State by his acts?
Now it is admitted that if the State chooses
to set up clearinghouse, or mandatory,
to engage in any other trade, in that character
it will be committed by the act of an agent it
may employ, just as an individual citizen
would be- Was it then in any such character
that the State (the legislature) passed law,
providing for the creation and management of
free banks! Did the State, by that act, place
itself in the position of principal in bust
ness, employing an agent in lis transaction !?
Did the State thereby engage in the business
of banking. for its own benefit. and conse-
quently assume the responsibilities incident
to the character? In word. what business
did the State undertake, requiring or even ad-
hitting the employment of an agent?
1t does appear to us that the simplest atten-
ton 20 the import of these queries will effec-
tually destroy all idea of principal and agent
between the State and the Comptroller. in the
supervision assigned to the latter, over the
business of free banking. The true theory
of the case is widely different. The State, in
its sovereign legislative character, as paret pa
trie, determines that free banking will be bene-
fetal to its citizens in general, and provides
for its being carried on, in such way and upon
such conditions, as seem best adapted to Sc
cure the greatest amount of advantage, and
the surest safeguards against frauds Well, it
turns out that in some respects. and to some
extent, the provisions made fail of the intend
ed effect. fraud and injustice result from the
operation of the law. What then? is not
such the result of nine tenths of our legisla-
ton? Is there any thing peculiar 10 this case
which should make the State responsible in
damages for the want of perfect wisdom in
majority of the general assembly? In all
candor we are unable to see the slightest diff
ference, in regard to a claim for indemnity
against the State. between unfortunate
holder of an Exchange-Bank bill, and any
other citizen, who might suffer on account OF
some fault in the Statute law concerning the
duties of an administrator. The State acting
as the guardian of all its citizens, has made
certain arrangements, and prescribed certain
rules of action, by the working of which some
persons have been damaged. The advocates
of State liability say that every one who sut-
fers, in consequence of such legislation, is en-
titled to compensation out OF the public trea-
sury. Why a? Did the State guarantee that
its regulations shall never operate to the dis
advantage of any one. and that no one shall
ever suffer loss from the ignorance, or deln-
quency of its officials? If this is asserted,
then we appeal to the common law and com
mon sense doctrine of want of consideration,
which renders the obligation imperative and
void, mere Rud,in pdctuBa. What inducement,
either good or valuable has been paid to the
State as the Qatld pro quo for an undertaking
so onerous?
If we are right in these views, the conclu-
sion is inevitable that the holders of free bank
notes can have no claim upon the State for
their redemption. But the same conclusion
may be reached by different course of argu-
ment. If the principle, that the State is
bound to compensate for the wrongful acts
of its officers is allowed TO sustain this claim,
it must be equally valid in all other cases, and
by proving too much, will be good for moth
ing. We have commissioner of roads ap-
pointed by the State. Suppose that by his
connivance, the officers of turnpike compa-
ny are enabled to defraud the stockholders
and creditors of the company, is the State
bound to make them whole? The govern
ment of the U. S. appoints commissioners. to
inspect the machinery of steamboats,, with a
view to prevent loss of life and property.
Should these officers fraudulently certify the
soundness of a boat. and should a citizen,
trusting to such certificate, risk his property
on board and lose it, can he recover the
amount from the general government? Ii the
Justices of Williamson appoint clerk of the
county, and he becomes a defaulter, and him
self and securities insolvent, can the indivi-
duals whose money he has embezzled, claim
to be reimbursed by the county treasury?
Cases, all standing upon the same footing,
with that of the creditors of the Exchange
Bank, might be multiplied at pleasure, but
these are sufficient to show a conclusive Tedue-
10 ad absurdim.
Much might be said of the ruinous impolicy
of adopting such principle, and the entire
recklessness which would be thereby induced,
in the management of banks and public Of
fees, and the conduct of those who have to do
with them. But we forbear for the present,
and until we feel more distrust than we now
do, in the conclusiyeness of the views here
submitted.
OHe iurther reIndrk III conciuslOH Let
those who undertake to discuss this matter,
learn the proper use of terms. Republication
does not consist in denying claim. but in
refusing to provide for its payment, after the
claim has been admitted, or judicially pro-
nounced valid. To fax the whole body of
citizens wrongfully, for the relief of a few,
would be as immoral. as the republication of
Just debt. This affair cannot be settled 10y
the use of opprobrious words.-FraUElm Re
riec.