Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-12-10

! Remarks of Hon. n. U. Dudley Of Mont
gomerY County, delivered in she TenneS
House of Representatives, ON wed
nesdaY. December Z, 1852 ON she COan
ter Note system.
Mr.. DUDLEY Mr. Speaker: I propose a fe,
remarks on the practical Wo1kiug Of the counter
| syeteu.
n ary every member in this house will tell yoi
that he is in favor CT the counter no system, bu
when they are further iDterrogated, lind the FOL
lowing variety Ct views prevailing on that sutjgc
LIST. There are some Who sIick to The bank bill 0
last session, which means that no bank thsll pay o.
aDy note rot payable on is face at the counter
| where paid oHt.
I'd. That no bank shall issue nste net psyabl,
at he counter where issuedi that is, The emiIttncS
or first issuance of new bill shall be payable 81
the counter where issued; but the bill being
circulation, and coming Ia due course Of trade int.
the vaults Of Oher banks, it may there be paid ou
81. Ne bank shall pay out any ntte not payabl=
On its lace where paid out; Provided, any principal
bank may Psy out the notes payable a. il branches
bat The principal bank shall be liable redeem such
| branch botss -.f ~
4th. The issuance Of all bank notes shall be at
cOu-Iers where payable, but any principal bank
| may pay out the notes Of its branches, provided
always, that the princTs al bank shall be liat to
Fede, m all the Totes Of its branches; provided
| further, that the branches may pay cut in addition
TO its own counter notes such notes as arc payable
at lis parent bank, which it may have received in
| due course OF trade. -~ta 1
oh view entertained is that each banking In
siiuti n shall make El its notes payable AZ some
central point and that all branches may receive
and pay out these notes payable at the parent bank
Cab. Any bark may pay out the notes Of all
| specie paying banks Of this State
7th. SSme think that the banks Should be per-
mitted to pay ou the notes Of ali branches wbe Ter
chartered by this or any other Stale
II is necessary TO 3 proper understanding Of any
subject that We should attach the same meaning to
the terms used. Nov, by the woriissusd We mean
10 emit the new or fresh impression Of bank note
or bill or in other words the FIRST time bank pays
cut bill just printed ADD signed, After this bill
has once come into circulation and returns in the
course Of trade to the bank and Is again handed
q customer, this is called paying Out. The words
| "psy out" includes the word Issue but issue
does not include he words pay out BOta terms
are used in section 1914 of Code, and in various
| bills before as on banking. sE b. saf
| Ny amendment would not repeal the act Of last
session in anything except allowing branches 70
pay out parent bank notes, which it may have re-
osIVeo due course Of trade, shah il conflict
in the least With the platforms the two political par
ties erected and stood upon ia the Ia canvass.
don't consider these platforms very big authority
but then it is smoother sailing go with them than
against the The Oppos tioD platform used he word
Issuance-Ehich means the fret emittance Of bill.
To this Part propose to adhere. The Democratic
platform said, $40 enforce invarable redemption at
their coanters Of their circulation" Now this sem
tence does not prohibit one counter from paying
out notes payable at other counters. But it simply
says and means that the law snail enforceor COM
pei The branch redeem the circulation at WhateV
err counter il may be payable or belong. TIE plat
form says nothing about paying out notes. Il a.
ludes ely to their redemption after they paid
out. H.-
The mode propose would De acceptable so far
as can Learn, TO all the hanks. And | think it
very desirable have all the banks working Under
the same rules and regulation
The first class Of opinions advocated is the coun-
ter note system, passed a the last Legislature
and now enforced upon the Bank Of Tenuessee. For
this system, fear there is majority Of this House.
Let us lock for moment to tue prac ieal work g
of this system 1t says that no bank shall pay out
any note not payable The counter where paid
TINS deprives the tank Of the Of all Of all
Other banks, as well as Of all notes Of the same
| Institution that are payable at other offices. 1t
lIkens the bank to fish trap: IL may receive, but
| not pay out. The best way 10 understand the sub
ect is to look the actual working Of the system.
understand from the Cfctrs Of ene-cf The b. anch
banks that on the LIST Of september they received
| about SO 0c0 counter notes. tigned and sent
| them by the parent bank for circulation. The
| bank commenced business on them. II diseoun:Cd
notes and bills of exchange and paid out courter
notes for them. IL pad depostors checks in these
counter EOtes, and in few days business all lie
tered all the country, ard the office had moth
ing with which to discount note or bill, or pay
| depositor's check. Il Is true, some few of these
counter notes would find their way pack, bat so few
| as to allow the bank TO do httie no business.
| Suppose Gu toner goes to bank TO make de-
poslt there being about SO 600 900 Of paper in cir
culstion in the State, ard only few thousand o.
this are The counter notes Of this branch, the
chances are that all or nearly all Of the money
sought TO be deposited will be payable elsewhere.
| n II Iaro obo for "A
the bank must pay the check in counter notes, aud
so the bank is continually swapping its counter
notes for other notes. / unders and the branches
of the Bank If Tennessee have not only Bee CON-
PEELED TO almost stop disoounting notes aud bills
but have refused to receive deposits.
| will instance . case that actually occurred. A
man in GAINESVILLE had 81 600 of notes on Varit III
banks which he depositsdin the ClaTkssille branih
A few Gays afterwards he waited he gold in Nah
vile; he drew his money out Of tie ClarksVil
branch in counter notes, brought them TO Nashville
and deposited them in the parent bank aud checks
for the gold. The bank st Clarksvile could not US
the first notes deposited the Nashville bank tn
| GAINESVILLE notes. This makes the banks the publ
carriers and that without reward This opera.io
will keep majority of the circulation constantly
trsnsilu, and prevent the banks from being able
grant the usual accommodations TO the citizens.
will take double the circulation TO do the same bus
ness.
IL may he answered that 10 permit the bank
have more notes signed would obViale this difficulty
and allow Of the banks doing its usual businesi
This would certainly be unsafe both TO The ban
and community. Per possibility more than legr
imste qusutiiy might get into circulation at on
| time, and the bank itself would always be In moI
danger from theft and robbery. Mr. GAntt's bi
for bank code fOrbids any bank to permit its ssu
: TO exceed 81 Of psper to 81 Of Epecie and spec
: funds on hand Now if this hard money counte
nete system operates 10 keep one-half of its circuit
! AZ In he IN her q
| for profit to the bank If il keeps a silver doll
, in the bank for one in its outside circulation, VII
3 chance is there Of making more money than vi
Il pay expenses and bad debts. aai sil
!, Mr. Trimbe's bill for the Te-eheFter Of Planter
and Union Banks forbids the banks TO issue or hs
: prepared for issuance more than aud one half
paper currency to one Of capital stock paid. Tn
restriction combined with the present counter no
syst IN, virtually confines them to seventy-6
cents Of circulation to one liar Of capital.
don't believe that any bank can work prO6tab
I under this counter note system, If II has proper
y slrietions upon its circulation. When the disti
gushed head of the Bank of Tennessee went in
that Institution il said that he would loose
reputation insnoisr than he had ever gain
as statesman He gave his clear intellect. lol
a experiences and his uniiFing energy 10 an indepe
p dent aud liberal management OF that lnsltutit o.
preserved it from much OF the Odium that rested u
70 on il. Mr.. johnson has managed this bank 8
years, and made as much money in that time as
iy had been in the habit of masking in twelve yea
BEFORE and he says the bank act Of last session "
r not d. and for one en- willing 20 profit By his
as tured opinions.
But, Mr.. Speaker, it has been charged on thls no
. that the present officers Of the State Back Ia
been restricting their line Of discounts and draW
a. in their circulation so as to produce hard tim
! throw e1ium upon the counter note system, 3
# cause an outside pressure upon the Legislature
repeal thu counter-nots system Of last session.
~ us examine this charge as far as We are able.
m. The report shows that the Bank o. Tennessee o
IL branches owned - -.
M Discounted bills and notes s., slS
IL Bills and notes owned lst July, -........ S46s
nd :
Increase Of paper discounts in months, Sol,O
w During these three months the circulation of
a. Rank Is eighty diminished, and rs asked how
| The bank Increase its paper discounts without
IN ereasipa rs circulation Il is done at The ezpen
Of lis specie veults. DuriDg these three moni
the Bank lost 1896 600 Of is gold and silver n
Vi presents strong point for the present Soard
shows that they nave been striving to relieve I
Il people though hey we're losing specie every "a
TX, il shows thst In the at smpt 10 execute the law
IT, countsr noses and at the same time not to o?P
M the PEOPLE, they we're losing daily their specie.
y The most eorrect mode OF comparing the state
hank ct different times. is 10 take the same peri
re- If different wears 70 satisfy myself on th8 POI
4 Ia ID 81 !