Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-02-23

debtor. II 90 happeaed that these free banks o.
Which GOV. Morgan speaks, aid In the month Of 90
obsr, 1857 close their doors agains their creditors
The Law required them TO kesp on hand only twelve
per cent of speoie to face the note holder and the
deposition II authorised them. in other words, |
to contract debts to the amount Of about eight
dollars to orc in specie on hand, and under
such circumstances slight demand beyond
usual. psnic gotten up by political mon
etary casualties occurring at home or abroad shook
down the hollow, blOated and baselsss fabric. 1t
tumbled down because everybody Of any sagarity
knew that if the banks were called on to meet
fourth Of their engagements they must fall, and a
portion Of their creditors believing they would be
called on, rushed in to save themselves. Hence
closing of their doors agsinss their creditors,
treme usury and bankruptcy of other traders, &C..
and great reduction in the amount Of the curren-
ey. Their notes no longer paid in the money
of the world, deprecated and dishonored pass into
the hands Of the broker, and are used cireulat
ing medium by force Of necessity aud in vitlrion
of the laws Of trade So also Of the nnety-fcur
free banks Of Indiana with notes perfectly secured
| by individual responsibility aud by the most snb
stantial State stocks, forty-ge Of them suspended
specie payments and their paper went into the
hands Of the broker for conversion into those pre-
cious metals of which the mines 1.-THE United States
now furnish about one million Of dollars worth per
week So it was with the promissOry notes of tie
State Of Tennessee, issued by the officers Of The
State bank. So it was with the notes Of all The
bank in the State, whenever money was demand
ed 10 pay debt out of the Stale. SO il has been
with the treasury notes Of the United States. and
it will be again when convertible into coin and
SO it was with the notes OF the Bunk Of England,
which lay in . collapsed end suspended state for
twenty-three years at one time, its notes ranging
from q to % per cent below the value Of the mas
ney of the world.
1t is evident 10 all thinking persons that this
depreciation Of bank paper has resulted from an
unWillingness to keep on hand a sufficient quantity
of gold TO meet the demands made for IL. Now the
direct and practical issue before the country is,
whether the Legislature shall provide for larger
specie basis, or whether past policy Of unchecked
issues shall be continued thus enabling and in
viting the bankers to establish 3 currency exclu
sivey fictitious; whether the law shall be continued
so that there may be again millions Of currency
one year and the nex whether it shall be left il
the discretion of bankers to incur debts by note
deposits to the extent Of 81 to in specie, as il
? Tennessee, OF 40 to !, as in Vermont; or Whsthe
some effort shall be made to fix by general Law, ap
plicsble alike to all the banks, the proportion o
gold they shall keep on hand, to authorize givel
/ amount of Indebtedness; that proportion to be en-
forced by bank superintendent, on the penalty
: of felony, and suspension of business when the.
hold below it.
!. The British Parliament deemed it necessary t
r chain down the Bank of England TO fixed gOlC
basis, by PeeTs act of 1874, TO prevent excessive
i issues and consequent fluctuations. II neces
d ssry to manaole this great Levathan in the Ocea
of commerce. is not still necessary impOs
J. by Law a similar check Tennessee institutions
e This will be examined in another communiea
d ton.