Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1858-10-28
Bank of Tennessee-Letter from Pre-
sfdent ~ OhnsOn.
BANK OF TENNESSEE, Oct. 20r1S5S.Es

y
- BANK OF TENNESSEE, Oct. 20gis58.ss
To THE COMPTROLLER OF THE TREssURY-
~ Sir: Noncompliance with the ACT of the &c
neral Assembly at it's last session / enclose
you STATE ment of the condition of the Bank
of Tennessee on the Ist October, the end of
the first quarter Of the Bank year. ~
In doing so, i think it nv duty to accom-
pany it with briet representation of the con-
dnct and policy adopted by its Directors that
its operations may be better and more readily
understood The suspension of specie pay
ments by the Bank in October last, at this
time needs no vindcation. The causes which
led to that event are now known to have
been general, extending over the United
States. as well as all other commercial coun-
tries. and may be properly traced to an I'M
due expansion of the commerce and trade OF
the country. The expansion of the hanks in
the different States, may have had much in
fnence in producing il. But whatever that
influence may have been. it cannot in the
slightest degree be traced to the Bank of Ten
nessee.5 49,
For some years before, its circulation had
been at no time so expanded as to excite over
trading or encourage the spirit of wild and
hazardous speculation; nor has it on the
other hand been so reduced as to harass and
Cypress its debtors. The circulation had av-
eraged about two millions upon a specie basis
of about half that sum.
The statement now presented together with
those sent to the General Assembly at its last
session. which were carefully examined by a
committee composed of majority of the de-
cided opponents of the Bank, abundantly
prove that it has at all times been kept with
in reasonable bounds. avoiding extremes on
either side. and affording to the people cur
rency sound and uniform the circum-
stances and business of the country would
H., III 80
means to keep the exchanges within reason
able and proper limits, at no time exceeding
one per. cent premium, and most of the time
half that amount.
When the suspension was ordered by the
Directors, they determined that it should not
be made preteXt for enlarging its business
or increasing its circulation, and that its dis
counts should be limited by its collections;
by so doing, its paper circulation was kept
about the same amount which seemed TO be as
necessary for the interest and accommodation
of the people as of the Bank, and the Bank
itself in condition to resume the payment
of specie whenever the interests of the coun-
try required it.
The course adopted by the Bank was indir-
ectly approved by the General Assembly,
when it directed that the Bank should not be
compelled to resume before the LIST of NOvem-
Der. evidently intending to favor the Banks
and the debtors by enabling them to obtain
the benefit of the present crops for the pay
ment of their debts: at the same time impos
ing on them severe restrictions in the manage
ment of their business, and the heaviest pc
nalties for a violation of them-these were
obligatory upon the Bank of Tennessee. and
requires the utmost caution in its manage
mcnt to avoid forfeiture of its charter. Act
ing in accordance with the supposed policy of
the General Assembly, the Bank of Tenncs-
see afforded every aid to its debtors consistent
with its safety, 10y extending the time of pay
ment on their bills and renewing their notes
in all such cases as seemed to require it. The
statement exhibits but a moderate reduction
in the line of discounts since July last, less
than one hundred thousand dollars on its
notes and still less on it's bills.
The principal stock banks having refused
to accept the provisions Of the late act of the
General Assembly, and claiming to be exempt
from its penalties as a violation of their
chartered rights, adopted different policy
from that of-the Bank of Trnnessee, and
determined to resume the payment of specie
four months in advance of the time indicated
by the Legislature, which necessarily requir-
ed still further reduction of the paper
currency and more rigid collection of their
debts. In self defence the Bank of Tennessee
was forced to adopt a similar policy of collec
ton and withholding their usual accomoda-
tons. 1t furnished additional grounds to
those opposed to all banks for aSsailing the
Bank of Tennessee. 1t was denounced as
rotten. unsafe and unworthy gf public confidence;
and for some time the Planters Bank refused
to receive its paper These attacks upon it
have continued from time to time, regardless
of the great interest of the State in its pre-
servation and proper management,and with
out any foundation in truth; and after the
sworn statements of its officers had been
published and verified by an examination of
the Legislative committee, and with full
knowledge that the State stood pledged for
the payment of its liabilities, as if it was the
settled purpose of its assailants by destroying
public confidence, to produce the ruin which
they had predicted To such an extent was
tie public confidence impaired particularly
in the adjoining States where it enjoyed very
large circulation, that S6l7 ,995 of its notes
were returned for redemption, to the principal
bank in Nashville, between the lst of July
and the list October, they were paid and now
remain in the vanlt of the Bank.
Under such circumstances, the Branches
finding that no business could be safely done
by discounts for the public. and knowing
their ability to meet all demands against
them, in August voluntarily resumed the
payment of specie, and have since continued
it, The principal Bank at Nashville having
but small circulation, at no time, even dur !
ing the suspension. refused payment in gold
".
The resumption of specie payment by the |
Branches in advance of the time selected by
the General Assembly. was made from a
thorough conviction that less evil would result
from it to the Bank and the people. than from
postpOnement until November. Ii would
afford also satisfactory answer to the |
INSCRIPTIONS assaults made upon the bank
by its assailants. 1t would restore public
confidence in its ability to meet all demands.
md min D,I,I hon, ha ,,rli,
sumo their legitimate and customary bust
ness. r...
The discrcdit thus brought on the Bank
together with the policy pursued by most of
the stocks and free banks of returning its
notes for redemption from all parts of the
State, have prevented il from granting
Accommodations 10 the extent ii had formerly
done, which was greatly desired by its Direc-
tors, and so much needed by the community;
whilst this want of confidence continues and !
its notes put in circulation in any part of the |
State shall be at once returned by some |
banker or broker for payment, it must be |
apparent to every one, that but little business |
can be done other than collecting their deDts |
and redeeming their notes, and that het
profits of the bank mast he greatly reduced.
Many of the evils to which the State has |
been subjected from want of uniformity and |
regularity in its paper circulation have grown |
out OF the unwise organization of the three |
old banks, and the competition in business |
and for public favor which necessarily result |
from it.
When il was ascertained that the United |
States Bank could not be re-chartercd. il was /
apprehended that there would be deficiency |
of paper circulation, and the Union Bank |
was chartered to supply its place, and the |
State became partner, subscribing halt a |
million of dollars complaints soon arose |
that 1t was. under the control of few favor !
ties. who managed il for their own advantage, |
and the next session of the Legislature was |
called upon for another to couDteraet its ef-
fects, and the Planters Bank was chartered, |
and the State became its partner also, sub
scribng or purchasing near quarter of a
million of dollars of its stock.
The exnansions and contradictions of thesa