The Winchester home journal. [volume] (Winchester, Tenn.) 1857-1858, 1858-06-03
I H E HON Z J0U RNAL
pledged to no party's arbitrary sway,
We follow truth wherever sheleads the way"
THE EXCHANGE BANK.

Inc lOllOWi0s TcudTkS iToHk VIC
Nashville Banner are sensible and ex-
press our views ITO t."
While the discussion between the
various parties connected with carry
ing out Of the Free Banking Law, with
respect to the acknowledgements of the
affairs fthc Exchange Bank are read
with great avidity by the public, they
afford very little consolation to the
note. holders, who are vainly enquir.
ing what is to be the value Of this de-
prcciated paper. Our own reflections
upon this subject have strongly i'm
pressed us with the beiefthat the notes
of this Bank, though not at present
available, must be eventually good.
Leaving out of view what may be
expected from the principals-the
owners of the Bank--and we under.
stand they are men of wealth, and re-
gardcd by those who know them best
as men of integrity--we hold that the
State is legally and morally liable for
every dollar of this circulation, as en-
dorser. The provision of the Free
Banking Law requiring a deposit Of
securities was made for the purpose
OF giving currency to these notes, and
confidence in the solvency of the par
ties issuing them. The State had a
double purpose in view-to afford
circulating medium for the people, and
to create a market for her bonds She
therefore assumed the responsibility
of an agent; and in consideration of
the collateral security deposited in
bonds by the owners of the Exchange
Bank, endorsed the notes of that in
stitution, and upon the faith of that
endorsement, the people received
them. 1t may be said that the bonds
required as security for this circulation
were never deposited. Very good
That is matter for the State to look
to. The issuance of the notes was
prima tacia evidence that the bonds
were deposited, and whether they
were or not, the name Of the Comp.
troller, as agent Of the State, binds
the State wherever it is placed. 1t
was the business of the State to see
that she was made secure before plac-
ing her endorsement upon these bonds.
The people could not be expected to
know whether the law requiring the
deposit of bonds had been evaded.-|
If A. endorse BIS note in consideration
of collatterals to be deposited, and
that deposit fails, the failure does not
affect AS responsibility to the holder
OF the note. The case is a parallel
one in an equitable, if not strictly in
a legal point of view. The same ar
gument will hold good if it shall APP
pear that the bonds were deposited,
and afterwards distracted. The
State, by her agents, assumed the
custody Of these securities, and upon
the faith of them, endorsed the notes.
If they have lost them-if by care
lcssness and inattention to business,
they have been left to the depreda-
tions of dishonest persons-this will
not relieve the State of the RESPONSE
bility assumed to the people, who, on
the faith of her endorsement, have
been induced to take and hold this pa
per.
We are unable to see any way by
which the State is to avoid this re-
sponsibility. To repudiate it would
be death-blow to all Free Banks.
If the State is to be permitted to es-
cape from the responsibility of the bu-
siness transactions of her agents in one
instance, she may escape in another,
and there will be no margin for conf
dence in any of her liabilities.
In view of these reflections, we ad.
wise all who have notes of the Ex.
change Bank not to sacrifice them.
We believe they will eventually be
redeemed, either by the principals or
endorsers.