Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-05-31
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and ten cents for the county Of Davidson was laid
in 1885, in each 100 Of capital stocks Of Union Baak
paid in BY stockholders, that tha individual stock
holders have paid in $.27s0OO; that Of the stock
81 ,e44 Oo0Eas owned by non-resdents and $574 600
By residents and that the State and county for
that 5esr amounted to $l9l7-this the Bank refused
to pay on the ground that the charter specified that
in consideration of the privileges granted by the
charter the bank agreed to Pay annually one half
OF one per cent on the amount Of capital stock paid
in by individual stockholders. The Supreme Court
said that the charter was contract that could not
be altered; that the bonus of one half per cent was
in lieu Of al taxation, and that no other taxes
could Re imposed on the capital stock OF the bank;
that tho State had no power to raise revenue from
the stock Of nOnreSdent owners but that the stock
Of resident owners given in as stock by them and
listed could be taxed in the county where the owner
resided; 60 that the Legislature retained the power
to tax the stock owned by her own ciiz ems but not
that of non residents The stock would, therefore,
be worth more to nonresident than resident, and
the stock would, in all probability. according
to the laws of trade, 60 into the haEds Of men
residents and the interest go out Of the State. The
State, therefore, had by this sale Of the banking
privilege, fixed for the whole period Of the charter
the amount Of taxes whish could be imposed on
bank capital, and no natter what circumstances in
the condition Of the country should arise, the
amount Of txes could not be increased on the capital
stock
l shall not raise here the question whether the
legislative branch of the government can strip them
selves and succeeding legislatures, BY sale, of the
important power Of taxation, selfdsfence, 60, but
simply contend that such course of policy is most
unwss improper and injurious to the best interests
of the State.
Other reservations shall now be noticed.
An act to incorporate manufacturing companies
contains the following; "Ths Legislature reserve
| the right to revoke AMI snnul this charter
whenever in their opinion, it shall be deemed iDju
rious TO the citizens Of this commonwealth in such
manner however. that no injustice be done to the
corporators" As e. matter Of course the cor pora-
ticn should have time to collect pay up their debts,
and close their business II the Legislature should
repeal their charter, they would be left IS all other
partners to continue their business. The worst
that could be done would be 10 place them on en-
equal footing with their cOuntrymsn.
The Legislature Of Pennsylvania can not be &C
cuseu OF 70 Inc luIsreSI8 OF m8QQfac-
lures or internal improvements much less desire
to destroy them. She has evncsd every disposition
to sustain both; and but few States have SO much
capital invested or have succeeded go we'll in each
| department Of business
The act of 1885, page GA sec. 9, in regard to the
suspension Of specie payments BY the banks, con-
tains the following clause:
"The Legislature reserves the right to revoke
alter or snnul the charters Of any banks accepting
the provisions Of this act whenever in their opin-
ion the may prove injurious to the citizens Of
this commonwealth, in such manner, however, as to
do no injustice to the corporators"
It may be necessary to avoid misunderstanding
of the last clause, to say that it is the received
opinion that 8 repeal Of charter without any pro-
vision for the liquidation Of its concerns restores
the real estate to the persons from whom the bank
got it, gives the money to the State for want of an
owner, discharges the debtor from this obligation
because there is nobody to pay or demand, and
leaves the creditor without remedy.
This is not the law because no such thing could
be done in this, day, but therefore it is, that
legislators always in their reservation provide for
giving the parties themselves or other parties the
right to settle up the without injury to any
rights existing obligations incurred and for the
withdrawal of the capt. and its distribution to those
| entitled to it,
The stockholders of the last bank of the United
States having failed to obtain renewal from Con-
gress appeared before the Legislature Of Pernsyl-
vanis with offer according to the recollection
of the author OF this communication of 81 600 900
FOR the charter. This bonus or bribe succeeded.
An effort was made repeal the charter, and the
discussion which took place in regard to this sale
of charter and the total loss Ofthe stock Of thirty
five millions Of dollars by insolvency, went far to
sustain the necessity Of slbjsCting corporations to
legislative control Still the door was lef: open TO
| the intrigues of capitalists and the influence of
public and private bribery, 10 get grants which the
public judgment could not approve. PennsylVania
believed that far from capitalists in every branch
of business, not being able to sustain themselves
against acts of legislative oppression and tyranny,
they would be able to bring influences to bear on
the Legislature which would be too strong to resist
That great State great in public and private virtue
great in her success in manufacturing internal i'm
provenents and finance, has, deliberately, from an
experience of the past inserted in her constitution
the following provision to guard against abuses
an outrsges:
mo corporation shall hereafter be created re-
neWed or extended with banking privileges, With
out six months previous public notice of the intended
application in such manner o. shall be prescribed
BY law; nor shall any charter be granted for long
er period than twenty years, and every such char
ter shall contain clause reserviDg the power to
alter, revoke annul the same whenever in their
opinion, it msy be Injurious to the citizens of the
commonwealth; in such manner, however, that no
injustice be done to the cJrporators" TSee Book
of Constitutions, =. 1854
"No law hereafter enacted shall create renew or
extend the charter of more than one bank"
The design Of this provision indicates clearly what
hsd taken place in the legislative history of Penn
sylvania. 1t was to guard against sale Of bank
ing privileges for long terms Of years. Of the most
unsafe character. 1t was to guard against fraud,
aud prevent the combination Of gangs Of financial
banditti, who have infested the halls Of the Legs-
lature Of Pennsylvania and New York, perhaps
more than any other States in the Union. They
determined that no legislature by fraud or other
wise, should in vital and all important sub
ject as the currency, do what could not be undone
by succeeding legislsture-should not have the
power to commit fatal errors which could not be
corrected by remedies suggested by the develop
ments of time and experience.