Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-12-09

banks should keep in their vaults onef0nrth Of their
capital ir specie for the protection of the Dcders
Of their notes. and he th0uFht that enough. He
opposed TO making the deposits of the mechanic
aud the farmer. eubjeet to debts Of the bank.
Many men. including guardians aud trustees. d.
posted m3nsy in banks for safe-keepisg aud it
xoald not be right to take their money TO pay the
/ nore-holde-s
TIE question recurring uoon the adoption of the
session, it was rejected upon division, ayes 8.
noes 9.
The bin having been considered by sections aud
perfected.
lows:
bin to reform and regulate the business of bank
ing in Tennessee.
section l. Be Il enacted by The General Assembly of
he Ssdte Of Tennessee, That every Bank which now
is or NAV hereafter be Incorporated under the au
thoritv of this State shall be subject 10 the lia5-
ties and governed by the rules and provisions con-
tanned in this Act.
Section ; BE 10 further enacted That no bank in
this State shall issue any note not payable nits face
/ at the counter where issued nor shall any bank
paw out any note not payable at It's counter FFo-
Uiei that any principal bank may pay out the notes
made PAYABLE at its branches, but such brAnch notes
shall by law be also payable at the counter OF the
pri lcpal bank and 40 bank Iote shall be ISSUED OF
| a less denomination than Ave dollars.
section , Be Il t,afbe el.actfd, That the capital
stock of each bank in this State shall be paid IN
in coin. ana that substitute or equivalent snau ne
received in lieu thereof; and no part OF the capital
stock of any bank shall be sold transferred. until
the whole amount thereof shall haTe been paid IN
Nor shall any loan be made to any sockholder, I'M
til he shall have paid the fall amount OF his shares
of stock: nor shall any loan then be made. H. III the
opinion of the Directors, the object OF the loan Is 70
| replace money borrowed to pay up ms stock.
Section !. Be tj'r'bcr eRoc'e,i That the capital
stock Of no ban. il tls S:ate shall exceed two mi
lion of dollars nor shall any bank commence the
business of banking with less paid capitti stocC
than three hunired Thousand dollars. And 1t sha Is
be the duty OF the supervisor 20 examine and report
to the Governor, thar this sum is actually paid IN,
before any bank slall commence business
Section > BE further etacted, That 1t shall rot
be lawful for any bank in this State, directly or m
directly to increase its total Liabilities bcyCnd the
amount of its total solvent assets or or employ
any u1 its moneys goods chattes or effects III trade
| or commerce; and no bank shall hold OF own more
real estate than is necessary TO carry on its banking
business Pr0rile,3. however, it may receive mort
cages or assignments for debts previously contract
ed. and purchase in real estate thus mortgaged on
assigned but not hold the same for Il longer period
than three years.
Section u BE IL further enacted That no Bank nth Is
State, shall permit its issues to exceed the proper
ton of two Tor of its specie funds consisting OF
com, notes of specie paving Banks, and sight eN
change. Each and every Bank shall own and have
in its own vaults for the protection OF the note
holder an amount OF coin equal to Onc-tOurth OF It's
entire circulation. and shall own and.keep on hand
an amount OF specie funds equal to third OF 1t,
entire liabilities. And in the event any Bank shall
permit its coin coin and specie funds to fall be-
low the proportions aforesaid, for the space OF for
ty days together. then all discounts by said Bank
shall cease until said proportions are restored. And
if any Bank shall Su!ier its coin or coin and specie
funds TO run below said proportions over seyehty-
five days, in all, any year it shall be The duty
OF the supervisor forthwith to cause proceeding t.
to be instituted ia the ChanCery Court Of the district
where such Bank is located in the name OF the Su
perysor against such Bank to have its assets sub
jccted 70 the payment of its debts and its charter
declared forfeited. Nor shall any Bank permit 1t,
coin to be reduced below One-fOurth of Its irlmed
cash liabilities and it shall be the duty Of each
and every such BankHat all times TO own and keep
OF hand amount of specie funds equal to one-thlrd
of its entire liabilities.
Section Z. BE Il further enacted That no Bank shall
emplos in its business. dividends due To It's stock
holders unless the same are made part OF the per
mment paid capital stock Of the Bank. BY tue STOCK
holders to whom the SAM are due and owing
Section s. BE e further elQcted, That with the
view To make the capital stock OF banks permanent
! and to guard against the destruction Ut the same
that the Board OF Directors OF each Bank, at the
end OF every six months, shall make a thorough eX-
animation Of the condition Of their respective Banks
and ascertain rs nearly possible the total amount
| Cf bad and doubtful debts due to the same, which
shall De reported to the Board, and spread upon the
minutes thereof and if it appear from this report
and examination that no profits have been made at
these periods or any Of them, beyond the amount
of bad and doubtful debt then TO dividend shall be
made until similar examination shall show that
the profits do exceed the bad and doubtful debt and
then dividends may be declared Of this OF
profits
Section O. Be 4 further enacted That no Bank shall
be chartered for greater period than twenty years.
Section 10. Be It further enacted That each Bank
shall make monthly statements under the oath OF its
| President and Cashier, to the Comptroller OF the
State, Of its true condition. This statement shall
show under separate heads, the amount Of coin the
sums due from Banks in this State. the amount due
from Banks OF the State, and the entire amount
Of its bills. notes and other assets. 1t shall also
show the entire extent OF its liabilities, including It's
| amount Of circulation. tjc.; which report, when
made and verified, shall be published according to
! law.
Section II. Be further enacted, Thatno Bank shall
| deal Ia uncurrcnt money, or pay out the notes OF
| other banks: and when in 4 stat. Of Suspension.
shall no take receive more than one per cent for
exchange; aud small pay into the Treasury Of the
Stale one half Of one per cent on its capital stock
for every month or fraction of a month"; willis. thus
| remaining in suspension.
Section T. Be further enacted That bank shall
procure another 10 give credit to is circulation,
| through any security or Indemnity given for 50
doing unless the terms of the arrangement are pub
shed from time to time during the term OF is cX-
stence in some newspaper Of each Of the cities Of
Nashville. In Xville and Memphis
section 10. be a. further enacted That each Bank
]
denomination and amount Of the notes intended for
circulation: and that before the are placed IN
circulation ting, supervisor Of Banks shall exam
inc the notes, compare them with the registry. see
that they are correctly registered, and certify the
fact upon the book and thathe shall procure an eX
act copy of the same. and report to the Comptroller
who shall publish it according to law; and this shall
be done often any bark may desire to increase
! its circulation Ii the officers OF any bank shall
wiltuY put in circulation any note or notes not re
riSteIc rs herein provided such officers shall be
! guilty of a miSlcmeanOr, and on conviction. shall
be seycrally fined not less than five hundred dollars
/ and imprisoned snot less than SIX nor more than
! twelve months.
| Section H. Be 1t further enacted That no part Of
the capital stock OF any bank shall be withdrawn
uni; its whole liabilities are satisfied or any P@i-
ton Of its assets applied to any other purpose than
that of legitimate banking. defined and preScrib
! ed by the provisions OF this act; AMI any Board
| or such members Of the Board shall permit the
same to be done, shall be guilty o. a msdemeanor
and shall on conviction thereof, be fined in the
Of five hundred dollars each, and imprisoned for not
| less than two nor more than ten months.
Section 10 BE further enacted, That at least one
fourth of the Directory Of each bank shall be
posed of persons not stockholders in the bank for
| which they act As Directors and that no person
shall be Director i'll any OF said banks, who is not
4 citizen Of this State.
Section lG. Be It further enacted, That all accom-
mOdatons extended the stockholders of the insti
tuition, shall be upon the same terms that are exact
ed from its other customers; and violation Of the
provisions of tbs section shall be misdemeanOr in
the Directors voting for the same and punishable by
fine and Imprisonment,
Section Il. Be further enacted, That no bank
shall pay interest on deposits, nor buy in, hold,
conceal his stock: but MAJ receive it in pay
meat OF bad and doubtful debts for tine purchase
of real estate and in such case the stock shall be
conveyed to a third party in trust to be sold by
him for the benefit of such bank
Section Is Be il further enacted, That a person
known the supervisor Of banks, shall be appoint
ed by the Governor and duly commissioned whose
duty it shall be to examine and report under oath
at least quarterly, The condition OF every Bank in
the State, showing III his report, under separate
heads, the amount Of coin, exchange bills, notes and
other assets of said Banks, well as the amount Of
issues and entire liabilities OF the same Such state
shall also show the solvent assets and bad and
doubtful debts and any other items necessary to ex
plain the condition Of the same. IL shall also show
whether the capital stock Of said bank is paid and
any other fact and circumstance to give the public
correct knowledge of the Bank. which report shall
be published by the Comptroller according to law
Section 10. Be further enacted That whenever
the supervisor shall desire to make an examination
OF a bank it shall be the duty of the officers of the
same to afford him every facility tor complying
with his duties required by this Acc: and if the SUI
pervisor should deem 1t necessary. he may cause all
or any Of the officers OF said bank to be examined