Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1858-02-04
NASHVILLE. Jan. 81. 1883.


and take pleasure in replying, inasmuch as
the statements made to the public by you, over
the signature of - H., were derived from me,
in various conversations in relation to the
Bank. | was surprised when | saw your arti-
Giles, at the accuracy of the statements, found
ed, az knew, upon verbal conversations with
me; aud every friend of the Bank owes you a
debt of gratitude for the just and proper de-
fence you made for that institution.
| noticed but one error in the articles that
needed correction: In speaking of the liabili-
ties of the State you Use the term endorsed
bonds, " instead of ''lOaned bonds" Whether
this occurred from any inaccuracy in my state
ments to you, or your misunderstanding my
remarks, is wholly immatcrial, as it does not
change the liabilities of the State, or the du-
ties of the Bank.
The debt Of the State proper. stated in
the message of Governor johnson, in October
| last, amounted TO 81 1908
Bonds of the State loaned to Rail
roads 1913, 900
Bonds of Railroads, endorsed by
| the State, 1851. 900
| The first two items. exceeding ten millions
Of dollars, the State was directly responsible TO
tie holders Of tie bonds for the interest, payable
semi-annualy, exceeding three hundred thous-
and dollars mostly payable in the eastern cit
les. 1t is true, that for the loaned bonds, the
| State had taken guarantee from the Railroad
| Companies, and required payment, with the
exchange to be made to the Bank of Tennes-
see fifteen days before the interest was due.
This did not lessen the obligation of the State,
or the duty of the Bank, to pay promptly the
| interest due the holder of its bonds.
Upon certain contingencies, the State might
be made liable for the interest on the endorsed
bonds of the State.
In addition to these liabilities, State bonds
fell due on the LIST of January, held by the
Secretary of the Treasury, amounting to the
sum of $3.50 900, which had to be paid in gold.
The duty of meeting these payments
promptly, and saving the credit of the State,
was sensibly felt by the directors of the Bank.
They dispatched an agent to the eastern cities
in the summer, with Planters and Union stock
to SELL as they were authorized to do by the
last session of the General Assembly. to meet
the bonds maturing on the LIST of January.
They could not be sold without Il sacrifice TO
the State, which the board did not think pro-
per to make. In the pressure prevailing III
the money market, the board could not rely
upon the railroad companies meeting the n-
terest which they owed, and could not delay
making proper efforts for these payments an
til the 18th of December. when the railroads
were bound to pay the Bank. If such delay
had occurred. it would have been too late for
the Bank to raise the funds and meet the debts
when due. Such failure would have been
disastrous to the credit of the State as well as
of the Bank.
The board were of opinion, that less sum
than four or five hundred thousand dollars
would be required to avoid the possibility of
discredting the State. Under such circum-
stances mentioned to you, as stated, that
'Hear 100000" would have to be placed in
New York by the Bank to meet these liabili-
ties.
So doubtful we were of the ability of the
Bank to meet them, through our ordinary
channels of business, that orders were actually
written in Bank, directing the branches to ship
their gold to New York for that purpose
Fortunately, however other arrangements
were made, so as to avoid the necessity of
shipping our gold.
On the LIST Of January, the bank of Ten
nessee had to its credit in the Merchants
Bank of New York S46S.77s 80: in the Bank
OF North America. in Philadelphia, SAL PIP 10.
The bonds holden by the Secretary of the
Treasury. and the interest on other bonds
holden by him, were paid in gold. amounting
to Sl3l.500 The bonds have been returned,
cancelled are now in the Bank. aud have been
examined and counted by the investigating
committee. The coupons gu the other bonds
of the State, can only be paid when presented.
and the amount paid cannot be ascertaincd
until we receive our monthly statements from
the Merchants Bank.
In addition To these payments for the State,
il will not he thought Ia he cut of place TO
state here, that the Bank paid to the State
Treasury on the Sd of February,
1857, 5000 900
On the 30th of September, lS57,. 800 900
making but little less than three-fourths of
million paid for the State within the last
twelve months.
At the time when the Bank was using eve
~ effort 10 raise the means 10 meet the liabil-
q. - IL :. III
refused to check for its customers, the railroad
payments were to be made in bank--a few of
them furnished the money and exchange; sew
eral Others furnished the currency, but no cx-
change; and the Bank went into the market
and purchased the exchange for them, and
charged then with the amount which was ac-
tually paid for it, Although the Bank had
been checking before and after, aud set does,
ut one per cent, twas not to be expected that
the Bank would give TIE railroads it, own ex-
change, which was required for its own use,
and go into the market and purchase ut high
prices for the use of the Bank.
The Bank sold its exchange at one per cent
bacanse its directors thought il unjust to the
State and the citizens TO avail itself of its
suspension to eXtort from its customers the
high prices then demanded for gold or ex-
change.
The Bank has never charged higher than
one per cent since the suspension. and during
that time, notwithstanding il ceased checking
for some weeks il has furnished the citizens
over eight hundred thousand dollars in ex-
change, at that price; and, notwithstanding
It's suspension bar actually paid out in gold
two hundred aud twcnty-eight thousand dob
lar, more than has been paid out usually
when not in state Of suspension.
i am, respectfully, your friend and servant,
&. JOHNSON.
Hon IA III IIfNt..pvVS Nasbriu.,