Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1858-02-04
N. O. WALLACE. Editer.
FAYETTEVILLE. TENN:
Thursday Morning, February 4, 1855
The People and the Banks.


would be interesting to ascertain what
our people are paying the banks,
while in a suspended condition, for
exchange on the North, South, East
and West. Debts due in New York,
New Orleans, st. Louis or Louisville,
or any other Of the great commercial
points with which Tennessee trades,
can only be paid in exchange or gold.
These are now bearing a premium OF
from five to eight per cent. This
will continue to be the case as long
as the banks remain in a suspended
condition, and rather than this enoT-
NOUS drain or tax upon the people
and the country shall continue, we
maintain that it would be far better
that the banks wind up and withdraw
their capital from the State.
The following article from the St
Louis Democrat, is equally applicable
to the present condition Of affairs in
Tennessee:
s;Many persons begin to believe
that our banks do not intend to re-
sumo specie payments soon, and for
the reason that they find it more
profitable to remain suspended, and
tax the community with enormous
rates of usury. The banks realize
how exceedingly remunerative If is to
give the people their promises TO
pay, with the privilege to charge them
two per cent a day for doing what
they promised, that is, to pay on de-
mand. In other words,i silver is need
ed to meet cash transaction, the
recipient of their paper, in addition
to the usual discount, has to pay the
two per cent on every operation to
convert it into money. This tax, as
is well KNOWN falls at last upon the la.
boring and consuming portion of the
people.
Our community is in fair way to
become bankrupt if it longer toler,
atss our suspended banks in continu-
ing the present system. The rate o
exchange transactions is now no less
than II per cent. per annum, while
the law contemplates that the banks
created by the people should charge
but reasonable and limited rate O
interest. 1t is almost needless to say
that such imposition will soon breat
up any business man. To illustrate
the assertion that our banks do charge
81 per can't per annum, We have sim
ply to quote their published rates
For 60 day date paper on New York
their chargais q per cent. Of in sus
pended paper, and K the purchase
simultaneously buys Of them sight
exchange on New York, they charg,
a premium Of per cent. This a
mounts to ~ per cent. for 60 days
time. and is equal to 81 per cent. pc
annum The exorbitant per cent thu
extorted is further shown by the fac
Of their declaring large dividend
while in suspended state-a thing
never heard Of before in any country
This usury, too, is set apart for thei
stockholders, whilst they are refusing
payment to their bill holders. A
present they are in a much bette
condition, SO far as specie goes, thar
they viii be at the end of ninety
DAYS, as every one Of their direction
know, and the community also is il
q better condition to stand it; for golt
and silver will flow from US if The
banks continue suspended. Their
only excuse, therefore, for refusing K
resume, is that they may persist il
making their enormous profits. s
Ii ought 10 be a feeling of NORTH
cation to every citizen of Missouri
to reflect that our State Bank is under
suspension, and its issues depreciatiDg.
when no other Western banks are in
asimilar position. It is hard too, fol
the poor and laboring classes to have
1, nav enhanced prices for all the nee
essaries Of life in order that a few
banks may charge outrageous rates
for the benefit of the stockholders.
Yet. such is the result, Retail and
even wholesale dealers subject to
such heavy share upon their busi-
ness operations, charge it ID turn. 10
the shape Of prices upon their GUS
toners, and the consumer eventually,
s saddled with the whole burden. II