Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-03-13
1asbbilIs Clinton AND 5meriran.
DaIiy ss Trl-WeesIY d; MeekIy 81.
Restrictions ON Bank Issues.

1000, sAi1 = the great desIdefetum OF modern lime
E is an efficient cheek on thspOw,r of banks, prevent
ing that excessive issue of paper whence arts
those huc uaiiOns in the standard Of value whicI
render uncertain the rewards Of labor"
1t mas been twenty four years since the idea con,
tanned in the above sentence was sent forth to biz
eountrymen, AID in veri6cstion Of is truth and
mportance We have Wiipssssd in the lasl few yslrs
the paper currency of Tennessee rise 70 eight mil
lions, and then fall suddenly to four millions; 81 one
time cheap, abundant and deprecated, and thea
scarce aud comparatively deficient, stimulating the
creation Of debt, ami then putting it cut Of the
power of the debtor meet his obligations without
paying in effect double much money as he agreed
to pay: thus utterly subVerting the standard Of
value established 10 the constitution This auctua-
tiOn is constantly taking place TO greater less
extent, and may be expected to continue so lsDg as
the amount of paper substitutes for money is made
dependent on the speouations caprices, and pauies
of individuals, unchecked BY liability to individual
ruin, or by any statutory geld basis
The author Of this Communication has heretofore
insisted that this tendency excess would be great
y checked if the Legislature had left bankers 20
that individual responsibility which exists amongst
partners st common Law. they are in England,
Scotland and Ireland, and also in Michigan and
MissourOr tlesst if the responsibility be limited
at ali, they should be held responsible 10 the extent
OF stock subscribed by each over aud above the
subscription this liability to stand as a reserved
fund for creditors. This is the Law nov in New
York, Olio, Indians, Connecticut ard other States
Second. lie has insisted that they should be
checked in the amount OF their issues by lodging in
] -
redemption Of their issues, and to guard against
insolvency by over-trading, and by fraud This is
a speedy, cheap and efficient bankrupt Law, and it
efficacy has bsea satisfactorily demonstrated wher-
ever :hs laws have been well guarded in detail.
In Tennessee the notes Of failing banks chers 5onds
have been deposited. have been far ell redeemed at
par by tie Comptroller. Ii has been 50 to great
extent in other States.
The subsection CT bankers 10 individual liability
and security is great advance on the system as it
existed in the days when Gen JAcKsoN issued his
seventh annual message.
The author of this Communication has also Insist
ed that this system should not be under the control
of chartered monopolies, bat that the business Of
banking should be pu, under the operation general
laws, subject to partial modification or total repeal
at he will Of the Legislature, jus. as all other
trades are, just they are 10 New York, and ether
States, ha, the Legislature can from time to time
correct abuses Hhieh msy arise and introduce such
amendments snd safeguards as the lights Of e1ps-
Renee may suggest that under such laws the pur-
suit Of banking becomes comparatively harmless;
but when Ghe Legislature sells and charters away
the right to the profit OF this pursuit, for long
terms Of years, they have the power 10 defy the
public will, continue abuses, amin become the
most formidable engine Of oppression, wrong and J
injury that well te concerted.
The next Legislature may charter away TO few /
c1upanies. composed Of perhaps two or three hun !
drei iniiyiiuals, in Of she greai cities, the
ShOle right 10 the pursuit Of banking, and of /
making pepper mcn-y f,r the citizens Of Tennessee
Tor half q century The RICH. to sell out ia this
the liberties Of Inc citizens, ard enc Of the
pursuits ofbusiugss. ought 10 be prohib ed By the
Constitution, as it is in New York aud Oiher States.
Tie Legislature ought have the power to char
ter away all control the currency fer period
which wid carry to their graves whole genera
ton. So long as the system Of chartered mOnop-
olies, beyond legislative control, is continued so
long will the door to all reform in the currency Of
the State be closed ard the lights of experience
rendered of no avail.
Bat the check, the great cheek, without which
the whole system Of paper issues is unuiligated
curse to any and every community in which il is
tolerated, without one compromising advantage, Is
the establishment ola statutory gold 5asis sucien-
ly high, so that whilst it shall allow fair margin
for profit to The vendors of credit currency, it shall
secure the public against extreme fluctuations in
he -. !
money of the World and re>establish to some ex-
tent the standard OF value fixed By the Constitution
If the banks of the State be prohibited from issu-
ing notes or receiving and lOsning cut deposits,
ali payable on demand, or Otherwise contracting
debts, without having hand such an amount Of
specie to meet such debts, may be established by
legislative authority, necessary to the public
safety, to be held by them at all times, then the
amount Of paper substitutes for money being de-
pendent on the amount Of the precious metals on
hand the huctustiOn must be within q limited
range beyond which it cannot CO. The legislative
authority declares then how far the currency may
facusts. 1t is not dependent on the spseulstiOns,
caPriees and panels of bank directors, but Is de.
pendent on what slWays should govern free peo-
pie, fired, permanent general !aV This will cheek
" cASSSsfNS rise prices ana epceQ~
latioDs and that general indebtedness which never
fails to follow excessive bank issues; ami Of conse-
quence it will prevent TO some extent the succeed
ing evil of deficiency in currency to meet the as-
mands which excessive issues have generated, and
the distress, bankruptcy and misery attendant
thereupon.
When there is increased sales CT goods st in
creased prices, and call on the banks for the
money of the world to ray for these goods, the
banks must stop loans till the foreign debt be paid
This checks, at an early period, the sales and fixes
the emluOt Of such sales the amount of the
money which is available to psy for them. The
country can never, under this system, get so deeply
in debt, as they an under the operation OF the
present open, unchecked trading companies. The
whole Of the operations Of the banks, and eonse-
quenily Of the trade Of tbs country, is then placed
at least 10 reasonable ezteat under the control
of metallic currency, aud under those general
laws Of trade which regulate the commerce Of ns-
tiOns The amount of issues would depend on the
amount Of gold bankers had on hand-net on their
discretion, aud their interest to put out and keep cut
an excessive circulation 1t would depend On their
sbiliiy TO meet their circulation by gold on hand
The legislative auti9rtv of thA Qfafo ou,ht "a Z,