Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-07-14

circulation of notes under 500, end establish
specie basis in the hands Of the people at large 50
as TO conduct the whole Of the common dealings Of
the country in specie, and throw the losses BY
broken banks the large dealers and traders, who
were directly connected with them. It was con-
tended by Mr.. BENTON that Great Britain raised
tax of fosr millions per anuum on Bank notes and
discounts, and that $500 900 per annum vas raised
by the same tax during the war with Great Britain.
II was resisted by Mr. CAIHoUE, on the ground that
twas using the taxing power as penal power, and
that With such use of the taxing power any ether
description Of properly might be destroyed by the
federal government.
This bill was defeated also, SO that the federal
government collected its revenues in gold and sill
YER and left the State governments with the control
of their institutions, trusting to their wisdom aad
patriotism 10 reetify the evils which had resulted
from their ''e1cesses, abuses, and delnquencies."
Now what did the crisis of 1887 work out in the
States suspended-resumed and suspended again
and wound up in insolvency; the last quotations of
its stock being at to dollars in the hundred. MIR.
GALLArIs, who had sdvoesied its recharter, said of
it: The expenditure of 100000 secret service
money ought to be explained The gross mismau-
agement by which tWo-thirds of capital of thirty
five millions could be devOured, is astounding and
has no parallel in the history of banks. 4
This disgracsd and dangerous corporation ought no
longer 10 be permitted to exist"
The banks of New York suspended, and loss of
Two millions thrown by fraudulent and insOlVent
banks, chiefly in BuEslo, on tie sOunder banks,
which we're taxed to make it up, besides the losses
to the original holders of the notes by depreciation.
The Unien and Planters Banks of Tennessee were
also suspended from an inability to meet their en-
gagemenis, AID Icy in that state till the Legislature
ordered scire faeiaS to be issued against them,
which was issued, aud they we're compelled to re-
sumo The wretched condition of the country was
made the grounds of creating great relief bank
the Bank of Tennessee, intended to have capital
of SIS, 900, 900, and was advocated because it was
under popusr control. In New York, proposition
was made to loan SIX millions of State stock to the
banks to help them. It did net 60 into effect
Gov MARCY was petitioned to call the Legislature
together to repeal the law which fOrbdthe issuance
of notes under FIVE dollars. He refused. 1t was
insisted that specie would return if the law was
adhered to. The gold and silver in the hands of
the people, as the banks had refused to pay, was
bought by the brokers, and it used in the pay
meat Of the debts the country owed abroad Hence
the great difficulties about change produced in New
York extreme popular agitation. (See HammOHds
HstOry.)
| The State banks had acted with the Administra-
tiOn when it was proposed to deposit the public
moneys with them; now that it was proposed to
collect ii in gold and silver, and keep it with the
public functionaries they went against the Admins
tration. Mr.. SEWARD now got to be Governor Of
New YORK. on the questions of the Independent
Treasury and issuance of small notes. Mr.. WooD-
BURY, who had in his Treasury Reports exultingly
pointed to the prohibition of all notes under five
dollars in many States, and in others under twenty
dollars, now saw the whole of these laws repealed
in all Of the States and the country inundated with
"shin-plasters," and an rredeemsble and exclusive
paper currency fastened the people for an indef
int period.
The Stale of Mississippi lost eight millions Her
whole banking system went down in fraud and in
solveney, and SO did that Of Arkansas, and they
have persistently refused to create any others in
their places; and Arkansas had just passed law
to prohibit the circulation of all notes under twenty
dollars Bad as the frauds and insOlvenoies Of the
banks in Arkansas and Mississippi were, they were
not worse than they were in Buffalo and other parts
of New York, or than the gross frauds in the man
sgement Of the Bank Of the United States in 1917,
or in I836-7-'8 eThe latter hsd', says Mr., GALA
TIN no parallel in the history of thecOunry" These
evils occurring with or less grOssness of fraud
and loss in various States led to the adoption in
New York of the Act of 1885, which viii be regard
ed as an era in the banking history Of the United
States, as the great commencement of the downfall
of corporate mcnopolies and vested rights in the
United State and the exaction of security for Bank
issues.
Far tie r1;on and 1,,eyi.on.