Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-06-25

to $I5 900 900, and the people we're indebted I,
them thirty millions -HammoHa's History. A Lee
gslative direction u nearly the whole Of the banks
of the State to wind up their afsirs, would have
created some embarrassment, though the capital i
might have been reioa1ed in arath.r form and /
been vested in advantageous undertakings. It |
was therefore not seriously urged " The ineor-
poration Of bank" says Mr.. GoueE in his work |
on Banking generally creates power sufficient
to perpetuate itself against any abuse, except posi-
tive bankruptcy" This power is increased in the
direct ratio of the monopoly it possesses and he |
proportion Of the entire circulation it maintains.
Il was in the year 1928, COMMITTEES Of the Leg
isature Of North Carolina raised to uvestgst. the
conduct of the banks of that State, three in
pumbsr,) did make an examination of them, having
books and witnesses before them. They reported
the exaetion of specie in collections, whilst they re-
fused to redeem theiroB notes wish specie and va
rious extortonats and luxurious transactions, "shch
had no parallel in the annals of avarice ct
appears" say the committee, shat the people of
North Carolins having already paid t. the banks.
since they went into operation, profit Of about four
millions Of dollars on their stock tock, too, about
three -fourths Of which WAS manufactured hy the
banks themselves in fictitious, fraudulent manner
that having paid this immense sum, exceeding four
times the amount ever paid into bank accordiog to
law, they still hold the notes Of the people for more
than Eve millions Of dollars about four times the
amount Of the whole circulating medium of the Stale
Thus it is 10 the power of the banks absolutely TO
extinguish the currency of the country, and when
they have taken every dollar out Of circulation,
/ q = osv,off ho naT1ta
They now intimate pretty plainly that 1t is their III
terest to wind up their affairs, and consequently the
| affairs of the people of North Carolina. Will you
permit parcel of men, who have so long sat the
/ law of the State at defiance to 90 on and compete
the ruin they have 90 nearly accomplished The
committee recommen led quo tOaTrGTto to take away
their charter but it does not appear that any thing
was done, for to crush the monopoly, uuder the err
| cumstsnces would have been to crush the people.
| The monopoly Of the currency when in the hands
of few individuals directs its power generally
the purposes of profit, and to exact from tine to
time extraordinary privileges and powers. When
in the hands of the State exclusively, it becomes
formidable engine Of party, gives malgoity to party
contests and or later its capital will be de-
voured by the coTmorants who surround 1t, or 1t
will be torn to pieces in the ferociOus squAbbles Tor
the spoils of its vaults. The power Of the monopo-
lists become still greater when they have succeeded
in D, occurring the passage of statute which prohiO-
its private banks from keeping money on deposite,
and paying it out on check, and buying and selling
exchange on distant points, as they have done IN
Tennessee, by the act Of 1927, and did in New
York by the act of 1904.
Under such s.ete Of things, bank directors be-
come what old NItEs called them, in 1919, "rsg
barons." and portion Of the mercantile commu-
nity live in state Of servie fear and dependence
| on them.
The people of the State Of New York, though in
debted to the banks thirty millions Of dollars, would
not, however, submit to a recharter Of them with
out the reservation or the right TO avail them
selves of the benefits of experience in correcting
abuses, and to modify repeal their charters, as
previously directed by the act of 1921 The scenes
of distress and embarrassment, insolvency. and
crime, through which they had so recently passed
By means of blosted paper currency aud fraudu-
lent corporations we're too fresh in their recOec-
lions not to induce them to make some vigorous eff
fort to prevent the of such calsmtes in
in time of profound peace, bOuntifal seasons and
good crops Yhey therefore passed 8 series Of en-
aotments, the substance of which is as follows:
They appointed three commissioners, who had
power to examine the books of each bank quarterly,
and examine the off ,ers of the bank on oath, and
other persons generally to ascertain the amount of
specie on hand at different times, and the ability Of
esch bank to fulfil its contracts. These lcng Zines
between examinations enabled banks TO borrow sps-
Gle to enable them, at a s9esifed time, to make q
good exhibit They should have been required to
make weekly statement the Bank Of England
is on the oath CT the cfsers of he amount Of their
deposits, circulation and specie - meet those dues
payable on demand.
3 They requiJs the who'e of the capital of each
bank to be paid up, and ath iavt made Of the fast
If paid up in specie, instead of borrowed "sPecie
fund or stock notes." it would still have been in
measure nugatory, as they would instantly have
loaned out the specie which was dead stock, aud
taken note public security which bore interest
This amounts to but little of itself.
g. They declared that, if any bank shall refuse to
redeem its paper ten days, it should suspend its
business and make no more loans till it resumed,
(s most valuable provision, says Mr. ALBsRT GAL
LATIS) and If it suspended year. its privileges
andsfranchises should be adjudged forfeited: but
the bank could make more money in state of tus-
pension and as it was the interest of the debtors
the bank to keep out large circulation, depreciate
it. and even break the bank in order to enable them
to pay their debts, it has 50 happened that the
Legislature has almost always waived the forfeiture
and let them continue on in state Of suspension.
To guard against this evil the Constitutions of Rev
York Louisiana and other States afterwards provi-
ded that the Legislature shall have power TO
tion a suspension of specie payments
4. They provided that if the banks were not
"fsiry and legally administered and with that
and diligence which agent for compensation
would be bound to observe" the stockholders should
be individually liable for the debts of the insolven
corporation, and the directors ASSUMING to the i'm
proper acts or oognizsnt Of the improper omissions
liable also; q valusble amendment, and vsrging to
the provision afterwards engrafed into their last
law of individual liability to the extent Ofthe notes
| issued.
5. That its circulation should not exceed double
the amount of capital stock paid in and its maximum
of loans and discounts not to exceed double and
one-haf the amount of stock paid in. "This maxi
mum of loans and discounts" says Mr.. GALLATIN,
on currency, p. 80, would yield gross profit Of
at least 10 per cent, and deductng three per cent
for expenses tax, and contingencies, would leave