Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-02-23

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bsolutely necesssry for ths public safety in the
ate Of New York. which has more banking capital
han any ether and which is the great centre Of
oreign aud domestic trade had It's effects ether
states where the losses by broken banks had been
comparatively AZ great or greater LOuisiaRa lndi-
.aa, and Michigan have all declared by their re-
pesive constitutions that the legislatures Of those
States shall provide for the registration of all bills
put in circulation as money, and "require ample |
security for the redemption of the same, and the
legislatures Of those States have obeyed the man
dates Of their respective constitutions The legis
ls,ures Of Ohio, Illinois, and Massachusetts, Con-
nesticut, Rhode Island, Virginia, Alabama, ana
Tennessee have passed laws requiring those who IS
sue notes as money to give security for the redemP-
tion Of them In some Of the States the statutes
requiring security has fallen unnOticed, and SO
banks have been put in operation under them be-
csuse tie legislatures have still continued to grant
specisl charters A member Of the convention Of
Massachusetts declared that l.Nyers made hand
some livines at the business of managing charters
throu zh the legislature notwithstanding their gen
eral law authorizing banking upon security. they
want other and better grants I'D privileges They
want TO issue notes without the inconvenience Of
lodging in The hands of public officer available
security equal to the whole amount Of notes Issued
This is q very onerous aud harrassing affair COM
pared with a charter which exempts him from IN
dividual responsibility, requires no security ana
gives him leave 10 60 is ming notes upon the faith
of capital raid IN By him 70 himself and held N ms
Ocn possession, without anybody te whether the
whole affair was not fictitious. Therefore it is that
special charters are greedily sought after as ar
ticles OF trafice in the market, and general laws
requiring security are condemned and never acted
on when charters can be got through the lsgisla-
lures.
A succession of broken banks rendering on Ii
quotation little or no dividend to the creditors, is
scOurging the people into the adoption of this sAfe-
guard, and if this system Of issuing notes as mos
my be continued it will sooner later be required
everywhere.
The present Governor of New York In his message
of the 4th day of January, 1859, the following
language:
GAS evidence that our free banking system fIr>
nishes security to those who hold It's circulating
| notes. it may be stated that the entire loss under
il 20 bill holders, resulting from suspension during
the severe financial embarrassments of 1857, was
hut 81 9S9: while the community suffered to the
extent of nearly fifty per cent Of the am0untin cir
| culaiion upon the bills of three chartered banks,
which failed during the same period Cf financial
disaster
"There may be alterations suggested, and judi
cious changes made, IN some Of the details Of the
present banking system; but take pleasure in say
ing that as whole the system is working satisfae-
toIily and securely-far more 30 than any former
one that has existed in this State"
The trifng loss which appears to have been in
curerd under the law which requires security, and
the heavy losses VIII ch under the banks still in
existence under the old system of corporate monop
oily without security, shows in striking light the
neost sity of the security tits is just what would
take place every where under e law well guarded in
its details. So the superintendent of banks report
ing on the two years Immediately preceding 1857
and So states that there resort to the sale Of
security only in one case, and that the notes we're
redeemed at 95 cents on the dollar.
In 1853, Gov. Wright, (now Minister to Austria, }
said in regard to the free banking Law of Indiana
Past events have clearly shown that the restrictions
in the law were insufficient to prevent abuses"
In 1855, he states to the Legislature the banks and
men of straw from other States had got out six mil
lion OF notes in six months that fortunately for the
State the broker fer gold in time to arrest the
swelling tide, and save the State from further
issue and deeper Indebtedness, and then in four
months FIVE millions of paper had been withdrawn !;
that the Law should be amended, &C. 1t was amended
BY the exclusion of non-resdents so far to place
the major part Of the stock Of every bank in the
hands of cizns of the State, and in other particu
lars.
In 1857, he states that if banks Of issue be per-
mitted at ALL they should be perfectly free Of every
feature Of monopoly; that under the amended law
the notes were perfectly secured and entitled to
the public confidence" But that it would be for
tunate day when the people of Indiana learned the
simple truth that they could have steadiness and
permanent prosperity, so long they continued to
encourage any system which converted promises to
pay into money.
At The same time the Auditor of the State said,
if bank notes issued upon stocks of States which
have never failed pay the interest en- them, with
the additional security Of personal respOnsibiy-in
many cases worth more than the whole assets of the
bank faithfully preserved for the redemption of the
notes. are not sufficient to inspire confidence in the
safety and value of the paper, then it would seem
questionable whether any system Of paper currency
could be regarded with favor. If this system be
not sustained whas hope is there that the old sys-
TEN of mere confidence banking cau obtain support
amongst people who can compare the advantages
and disadvantages of real security and mere nominal
words of confidence
Whilst have never been the advocate Of any
system of banking as being better than the use of
the precious metals free to say, that the peo-
pie will not create sustain any other system than
that which is based on the most positive and avail
able securities. F"
Testimony might be accumulated from other
States to show the main fact insisted on, that
the people of Tennessee desire to continue the prac
tice ofmaking promisory notes substitutes for money,
there is no safety in any other line of policy than
that of requiring security for the payment of them
as the bankers do of their debtors, when they ex,
change notes. If This safeguard be adopted losses
may still happen. Bonds may be lost, stolen, or
destroyed they may not be depOsitedin the hands
Of the public officer designated by Law TO hold them,
and States may repudiate their obligations; so if
the security be real estate improved and unincum-
bered of double the value Of the notes issued, the
titles may fail, the improvements may be destroyed
by the torch of the incendiary, or by lightning
1t may, however, be safely affirmed, that If the
major part Of the stock be required to be owned in
the State if individual DroDertv ha held liahla If