Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1858-02-03


stated in one Of these communications, that
thought the Legislature OF Tennessee should take
Steps, as far practicable to guard sgainst future
suspensions.
shall take occasion. through the columns Of the
UsIoS AND AMERIcAE, to make some suggestions on
he subject Of our loose bank legislation.
Your friend, w. H. HEMPHREEs.
NASHVILLE, Jan. 81, 1858.
DEAR SIR: I received your note to-day, and take
pleasure in replying, inasmuch as the statements
made to The public BY you, over the signature Of
H, ." we're derived from me, in various converse
tons in relation to the BaRk. was surprised
when [ saw your articles, ct the accuracy Of the
statements, founded, as l knew, upon verbal con-
versations with me; and every friend Of the Bank
owes you debt Of gratitude for the just and proper
defence you made for that institution.
noticed but one error in the articles that needed
correction: In speaking Of the liabilities of the
State you use the term ''endorsed bonds" instead
Of "loaned bonds" Whether this occurred from
any iuaccurscy in my statements to you, or your
misunderstanding my remarks, is wholly inmate
rial as it does not change the liabilities Of the State
or the duties Of the Bank
The debt Of the State proper, as stated in the
message Of Governor johnson, in October last
amounted to S419O, S56
Bonds Of the State loaned to Railroads. 5,979,OcC
Bonds of Railroads. endorsed by the State, 1851 OOC
The two FIRST items, exceeding ten millions Of dol
lars the State was directly regpOnsbls to the holder,
Of the bonds for the interest, payable emisnnualy
exceeding three hundred thousand dollars, mostly
payable in the eastern cities It is true, that fol
The loaned bonds, the State had taken guarantees
from the Railroad Companies, and required pay
nent, with the exchange to be made to the Bank Of
tennessee fifteen days beflre the interest was due
This did not lessen the obligation Of the State, OF
the duty of the Bank to pay promptly the interest
due the holder Of its bonds.
Upon certain contingencies, the ate might be
made liable for the interest on the endorsed bonds
Of the State.
In addition to these liabilities, State bonds fell
due the LIST of January, held by the Secretary Of
the Treasury, amounting to the sum Of $25O,OO0,
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 sumner, with
Planters and Union stock to sell, they we're su-
thorized 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 q sacri-
fee to the State, which the board did not think
proper to make. In the pressure prevailing in the
money market, the board could not rely upon the
railroad companies meeting the interest which they
owed, and could NOS delay making proper efforts
f5rthese payments until the 18th of December, when
the railroads were bound to pay the Bank. If such
delay bad occurred, it would have been too late for
he Bank to raise the funds and meet the debts when
due. Such a failure would have been disastrous to
tie credit Of the State as well as Of the Bank
The board we're Of opinion, that a less sum than
four or I've hundred thousand dollars would be re-
paired TO avoid the possibility of discredting the
ale Under such circumstances. l mentioned 10
ia, as slated, that .near $500 OOO' would have to
Be placed in New YOrE by tbs Bank to meet these
lsbIllies.
So doubtful we're we Of the ability Of the Bank to
NEE. them trough ordinary channels Of business,
Jrlt orders we're actually written in Bank directing
the branches ship their gold to New York for that
purpose. Fortunately, however, other arrange
mems were made so as to avoid the necessity Of
suppng our gold
Uu the LIST Of January, the Bank Of Tennessee
b "a to its credit in the Merchants Bank Of New
TX, SI6s rs 81; in the Bank Of North America,
il PhilaIslphis, 4L2I2 70 The bonds holden y
the Secretary Of the Treasury, and the interest
other bonds holden by him, we're paid in gol,,
amounting to SI3l, 500. The bonds have been re-
turned, cancelled, are now in the Bank, and have
been examined and counted by the investigating
committee The coupons on the other bonds of the
State, can only be paid when presented, and the
amount paid cannot be ascertaned until We receive
our monthly statements from the Merchants Bank
In addition to these payments for the State it
viii not be thought to be out Of place to state here
that the Bank paid to the State Treasury on the Sd
Of February, 1857, 100000
Ga the 8Orh of September, 1857, 100000
making but little less than three-fourths Of mil
on paid for The State within the last twelve months
Al the time when the Bank was using every effort
- raise the means to meet the liabilities Of the
State when it had for some weeks refused to check
for its customers, the railroad payments were to be
70 .ie in bauk-a few Of them Furnished the money
sad exchange; several others furnished the cur
rancy, bus no exchange, and the Bank went into
the market and purchased the exchange for them
sud charged them With the amount which was ao-
tuaIly paid for it. Although the Bank had been
checking before and after, and yet does, at per
cent il was not to be expected that the Bank would
give The railroads lis own exchange, which was re-
qured for its own use, and 60 into the market and
purchase at high prices for the use Of the Bank.
The Bank sold its exchange at one per cent, be-
cause its directors thought it unjust 20 the State and
the citizens, to avsI itself Of it's suspension to exc
tort from it's customers the high prices then de.
mauded for gold or exchange.
The Bsuk has never charged higher than one per
cent since the suspension, and during that time,
Notwithstanding it ceased checking for some weeks,
il has furnished the citizens over eight hundred
thousand dollars in exchange, at that price; and,
its suspension, has actually paid
out in gold two hundred and twenty eight thousand
dollars, more than has been paid cut usually when
not in state Of suspension.
lam, respectfully, your friend and servant,
C. JOHNSON.
Hon. W. H. HUMPHREYS, Nashville.