Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-05-31

bat as the power Of Congress- was doubted 1t re-
oeived a charter from the State Of Pennsylvania
asO--eapital not 10 exceed ten millions 1t began
business on $500. 900 paid II issued excessively;
on being run upon, it run on its debtors. The
duetien Of lOans,' says Romans in his Dictionary
Of Commerce, ''oeeasioned general pressure for
money, bankruptcies Injurious extortiOBs, the dis
appearance Of specie, and the mpOssibiity of pro-
curing money 1t the legal rates Of interest. Petit
tiOns were presented to the Legislature for repeal
of its charter. Twas repealed Ii continued to do
business under its Congressional charter In 1877
its State charter was reyived-its capital cut down
To two millions, and it vent to work on 100000
paid in.
In 1872, the Legislature chartered twenty-five
banks; aggregate capital nine millions Governor
Snyder vetoed the bill, giving the reason that it
would invite to visionary speculaiions divert men
from useful pursuits, and demOralze the communal
ty." In 1914, bill was passed over his veto in
cooperating fOrty-One banks; capital seventeen
millions, of which onsfth was only required to be
paid in. These banks, Were Of course, on the plan
Of the old system of the common stock banks; no
individual responsibility security for the notes.
and no specie required By law to be kept and small
notes complete trap to enable adventurers to
gull toe community, under the public sanction of
responsibility given by charters. "Thirty-seVen
went into operation, and in four years fifteen OF
them we're officially announced as dissolved, aud
were insOlvent "-Homans. ''In 1890, there were
thirty banks in operation, capital fourteen mil
lions; and an indefinite number Of freeboters. 1t
is an unpleasant task, says Romans, "to run over
the next decad.'Of ten years, from 1920 to 1880.
Throughout almost this entire period, there was
rapid succession Of untoWsrd events leading to en-
barrassments, insolvency. litigation, dishonesty and
fragrant crimes 1t is continuous history Of bank
ruptcy throughout large portion of the country,
and of frauds on the country without any previous
parallel. Banks were bribed to fail, that their
stockholders might pay their Indebtedness in the
currency of the same bank after it had reached its
| lowest point of depreciation, commonly fifty per
cent. Money mills xeIs established in New York,
Philadelphia, and other places which we're based
the system OF the celebrated Melspar the keeper
of oyster cellar in New York. who had the sdroit-
ness to sWindle the community out of 100000 by
his notes Of circulation, and whose motto was,
make money honestly if we can but rasoally if we
must" Such is the description of Romans of the
period from 1920 to 1880. In 1887, the Pennsylva-
mia Bank of the United States went down, with q
total loss of its stock of thirty five millions of dol
| lars and others too numerous to mention. The
banks of Pennsylvania resumed nomiually in Janu-
airy, 1889. In October they suspended again IRE
suusd in January, IS4I suspended in February, and
resumed in March, 1912. The last suspensions and
failures are too laie and fresh in the recollection
ell to be noticed.
These are the events which have led to the adop-
| ton Of the great measure Of reform more impor-
iaut, than all others to-Wt: the iguominious expu
sion from their system of bank legislation of al
charter contracts, as to enable the Legislature
from time to time to reetify the frsudsand bunderl
Of those engaged in this pursuit of making cheap
currency for the people.
The general law in Pennsylvania, regulating
banks, contains the following clause
"The Legislature reserves the right to alter, re-
woke, or snnul the charters of sIl such banks
whenever in their judgment, it may be necessary
| for the public welfare; in such manner, however
as to do no Injustice to the incorporators "-Pur-
aOH's Digest, P. as, sec. 9.
The Legislature of Pennsylvania could say, at
any time when in their opinion it became necessary
to secure the public against loss by failing banks,
thst the stockholders should be Individually liable
as other traders are, for the whole amount of their
notes and debts as they are in England, Scotland,
and Ireland and as they are in some of the States
of the Union; or that they should be Liable for
double the amount of their stock, to be held as
reserved fund for the payment of debts as in many
Of the other States. The Legislature could say
| that they should deposit bonds in the hands of a
public officer as security for the redemption of their
notes. or order an increase Of their bonds il nec2s
sary. The Legislature may, if in their judgment
it be necessary, order them to Withdraw all notes
under ten, twenty, fifty dollars if that should
be necessary to secure a sound currency; or may
order them to keep ten per cent Of their debt in
specie or twenty per cent, or thirtythr per cent
or fifty per cent, if such amount be necessary in
their Judgement to secure their notes against sus
pension end deprecistion it may declare that they
shall issue no more notes, make M more loans, and
gradually withdraw their capital, collect their
claims, pay their debts and close their concerns
The Legislature owes it TO the people to make the
paper currency secure and to make it sound and
convertible into gold; aud to surrender the power
to do 50 for long terms of years. to sell for the
period of a whole generation t. few individuals
monopoly of The most vital pursuits Of the people,
is surrender of legislative power which may we'll
be questioned and which is to result in abuses
Of the worst kind.
No other pursuit is sold out to monopolists and
placed beyond legislative control Why should
banking be- Why not grant by chartered right the
sole right to manufacture and verd soap or salt in
Tennessee for term of years. for so much per ton,
to be paid into the treasury, Charles the First
did in regard to tho manufacture and vending of
the former article in the city of London Pennsyl-
vanis resolved that she would no longer sell out the
profits Of this business She would make no more
contracts with portion Of her citizens, that her
Legislature should not regulate prohibit the man
ufacture Of paper money, VII enever in her judy
ment such business should bers gulsted prohibited
The tendency Of this system to abuse was great
and the correcting power was proper to be reserved
But that State, like many others, did not sto in
regard to that branch Of business in which the cor.
rscting power is of all others the most necessary;
it extended this power further.
The general Law in regard to the creation of man
ufacturing interpretations, declares that the Legs-
lsurs the right to alter, amend or repeal
the sot in such as to do injustice to the
oOrporators; but such amendment, alteration or re-
peal shall not take away alter, or impair the reme-
dy against the company, its officers or stockholders