Clarksville chronicle. (Clarksville, Tenn.) 1857-1865, 1859-12-23

throw odum upon the counter note system an
cause an outside pressure upon the Legislature {
repeal the counter note system of last session. LIE
us examine this charge a. far we are able.
The report shows that the Bank Of Tennessee AM
branches owned
Bills and notes owned lst July 3,462,0
Increase of paper discounts in months, 1851, 200
During these three months the circulation of tn,
bank is slightly diminished, and il is asked how car
the bank increase its paper discounts without in
creasing It's circulation 1t is done at the expense
Of its specie vaults During these three months tho
bank lost $596,000 of its gold and silver. This
presents strong point for the present Board. II
shows that they have been striving to relieve tht
people, though they were losing specie every day
1t shows that in the attempt to execute the law Of
cUunter notes and at the same time not to oppress
the people, they were losing daily their specie.
The most correct mode of comparing the state Of
bank at different times is to take period of diff
ferent years. To satisfy myself on the point now
under discussion | called and examined the books
of the parent Office now and at this time last year
found that the paper discounts now are $31 1893
more than they were the same day last year.
never heard that they were expressing the people
about this period last year.
1t is further charged that many branches have a
capital. The Memphis branch, for instance, is cited
as having capital of 100000, and circulation
of only $40 658.
At first blush this looks like case Of great hard
ship, and of dire oppression on the part ef the pa
rent bank; but when il is told TO this House (which
is the factl that the Memphis branch has circula-
ton of $3.50, 1SS-that she has in her vaults $685.
$50, which leaves a real or outside circulation of
$40, 9,657-the case is very much altered. Now, il
of the parent bank SO far its accounts are con-
cerncd; and if anybody is to blame it is the board
at Memphis, and not the parent board. presume
the board at Memphis are doing all they can. ]
have no doubt the counter note system oppresJes
them as il uJes other banks.
| presume that everybody knows that the mode
by which any bank gets the amount of its real cir
culation is to first take its registered circulation and
subtract therefrom the amount in vaults, and that
gives the outstanding or real circulation.
don't believe, then, that the pressure in money
matters is caused by any concerted action of all the
banks, or by the voluntary action of any of them.
know that the operation of this counter note sys-
tenn is to render the larger part of the circulation of
the Bank of Tennessee useless to the community by
keeping 1t in the vaults of banks or travelling to
points where it can be paid out. The President
tells that the branch notes are continually coming
in II will certainly be very expensive operation
to send them back daily to all the various points
where payable, and yet they dead capital until
they are sent back. The whole circulation of the
bank is $3,279 26S
In possession of banks, 1869, 699
Actual circulation, $1,000, 500
admit that portion of banks registered cir
culation should be in the bank but certainly not the
proportion of 81 800 900 in to 81 3OO,O out Some
persons may ask, why not loan out more? The
answer is, that it is not at points where it he
paid out The bulk of circulation is always travel
ing back to points where it is available ] don't
hesitate to say that under this system it will take
double the bank capital and circulation to do the
same business. The President of the Bank of Ten
nessee has informed us that he had half mil
lion of branch notes on hand, and should he send
them home, as he is doing constantly, they will be
constantly returning through the merchants to the
parent bank.
1t is also charged that the Planters and Unior
Banks are contracting their circulation TO produce
hard times, in order that we may be forced to re.
charter them. Let us see how that is. The Plant
ers' Bank had over 100000 more in bills and note
the lst of October than it had lst October 1858
and since the lst of October last 1t has still further
increased its loans, $444,O 900. But the gentlemen
say that the circulation is less 1t is true it is
less but they have not taken in their circulation
without paying out its equivalent and that of itse
could not have produced hard times
Ifthey redeem their circulation by contracting
their loans this would produce hard times but W.
that they have been increasing their line ofdis
counts all the time We see in these as in the Stat
Bank, that the specie has been falling off; and her
we discover the reason why the circulation is les
than formerly. 1t would certainly be very ba6
policy in any bank to increase its circulation wheI
its specie is falling off.
An examination of the Union Bank will show
state of facts of some character as the Planters tho
not to the same extent These two banks have Ger
tainly used all effort to extend accommodations u
the country. The books of the Planters and Unioi
Banks show that they had on the 23d of November
1859 81 ,073000 more bills and notes than they haC
on the cath of November, 1883.
But it may he asked, if the banks arc doing th
usual amount Of discounting, what makes the time
hard? 1t cannot he denied that there is consider
able stringency in the money market of this State
The first of this is the operation Of the cOunte
system upon the State Bank running its circulation
into the offices Ofthe banks at different points wher
it cannot be paid ont. The contraction Of the circu
lation Ofths bank has like effect upon other banks
Some Of the banks Of the State have wound up AM
others are in process Of liquidation. Much Of tn
private capital of our State has gone abroad for in
vcslment driven out by the stringent interest law
of our State. The crops have not gone forward a
]
of trade N mean the national trade) is against III
causing continual expectation of specie and has tn
effect to keep the country drained Of the preciou
metals,
When gentlemen talk Of bank reforms am wit
them for We would be ignorant indeed If we coul
not learn wisdom by experiences but when they sa
they learned it all at the last session must dsagrc
with them. think there have been lessons taugt
and learned since last session. and of these le
sons is that the bank act ofla session. so far rs III
counter note system is concered went too far; tht
it is beautiful system in theory, but too hard f
practice at this time. They found the banks
trouble in suspension and instead of egislatng
relieve and strengthen them, they thought it Wi
their duty to make war on them. The banks WEI
not in suspension from weakness, but because the
did not wish to oppress the people, their debtor
Our banks were much stronger than the KentucI
or South Cnrolina banks were.
ltis a fine thing that some Of the banks had cla
tered rights had vested privileges that protccte
them from that radical Legislature, this countI
would have ere this seen the hardest times ever e,
perienccd in Tennessee. Had all the bank charte
been repealahe in their natures, we would have HI