Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1859-10-06


4A1 periern their functions fully aud in good
4-s ,asf 50 long they make themselves adEan
ser1 aad beneficial to the public; just 50 long e
ele s.expeaient for the public good" they viii
11Dtorsd and sustained; and when shey fail in
A.sse respects. they ought to he abolished.
1h7 zasi that their continued existence Il made
= te9end upon their promoting the public good BY
9 fnk and fair performances Of duty, would furnish
- 3oRerfu incentive Of self-preservaton q
1eEiss 70 banks 10 avoid excessess however nueh
tonrse2 By the prospects Of large profits, and to
eE1eFm, with perfect hdeiity, their whole duty to
people.
Z seems to me that you had as well expect 3 ra-
Nenal people 10 shut themselves in from light air,
rnG the genial warmth Of the sun, IS to expect
Mla2 70 STRIFE daEn Institutions which sre promo
Ave Of their Interests and beneficial and con-
SszieDt &c them; and the Constitution torbids
yeuF chartering any corporation which is not Of
fsis character Hence, csrporators who intend 10
rake bank which viii furnish 70 the people, at
I'll times, and under al circumstances, sound,
pniform. aed convertible currency, need have no
9ar Of The reserved power; and it would be I'M
wise and impoiiic in The extreme, as well as I'M
epnstitutiona 70 give them the privilege Of Great
NJ ore Of different character.
About half Of the States Of the Union and
aaonRss them New ] ork aud Pennsylvania two Of
She largest commercial States in the Gevtrnment,
gBised by the lghss Of long experience in banking,
lave been forced TO adopt the policy Of reserving
aEistions New York adopted this policy BY legis-
Etve enactment in ls29-30 and sfler testing it by
= trial Of sixteen years, il wss incorporated into
- constitution Of that State, snd there is not
single instance upon record, where il has been
aAoptsd BY any State that the reserved power has
been abused By the people
Indeed, cannot see why they should be expected
e abuse this power any sooner than any other or
every other legislative power which they possess
therefore earnestly recommend the following
Tantrictiens as indspensably necessary to any sys
hem of banking which is expected to furnish 3
sound uniform, and convertible currency:
RsrsL-Tbe power reserved TO the people, through
DE Legislature TO amend repeal the charter
sasn deemed ezpedieat for the public good to do
SseOnd.-That no bank shall be permitted to issue
more than two dollars Of paper for Of specie, or
% permit its entire liabilities to noieholdeFs de-
posisors and others, any time, exceed the spe-
ole IN the vaults more than three for one.
The experience Of tia financial world has demon
grated beyond controversy, that the cOnvertibility
e paper currency csnnOt be maintained, st all
ssneS when the disproportion between their specie
and liabilities RIMS higher than this.
Ezird-Tbst no bank be permitted to issue any
sse Of less denomination than twenty dollars. This
will secure a specie currency for all the smaller
business transactions Of the country and at least
partial exemption from losses by bank failures and
8 deprecated currency. Of that class Of the com
munity who are least benefited by bank sccommo-
frsra by their failures or depreciation. And th'
HFRe amount Of specie necessarily retained in the
eo9ntry in constant circulation under this policy
Rould 20 far to relieve il it did not prevent thu
Sonmercisl revulsous and financial derangement
Yhish hsye been of but too frequent recurrence.
Eonrth-That no bank or branch bank in tn
Gtate shall issue or put in circulation any note o
AL that is not payable in specie at the couute
Where the same is issued or put in circulation
The issue by each bank Of nothing bot its counte
Reses, would con6ae the circulation Of each BAN
- the legitimate wants of the community, upol
whose trade it is predicated It would tend to Sc
sure q sound currency ia each and every neighbor
heed 10 which bank may be located, by sffordin
20 all an opportunity Of converting into coin, with
ouL expense, whstever paper might not be needle
Is mere matter Of convenience for our interns
tRsds.
The facility for returning notes thus issued upo
he bank for redemption, would serve as a constsn
check upon the banks, and would do much to
wards keeping them within safe limits 1t woul
pat en- end 70 thai system Of flooding the countr
With the deprecated or doubtful issues Of our oE
ar foreign inst tutions.
Ej7k.-Thc individual property Of each stock
AOder to be liable for the debts Of the bank bat
between themselves, their liability to be in proper
&on to the amour. Of stock taken by each, al
this liability the creditors of the bank TO conu
ue fer the term Of fouF months after public motto
Of any transfer Of stock, so taAt the creditor ma
proceed against the original stakeholder, if he pre-
fers doing So 20 relying upon the solveucy or MAJ
azement Of the purchaser Of the stock. This vii
prevent solvent stockholders from relieving them
selves from Liabilities creditors by tronsferrin
Kheir stock TO insolvent parties.
Stockholders establish bsuks and invest thei
ospital in them for their own pecuniary benefit
Ahsy have the management aud coutrol Of them;
uroAts accrue, they the bcnefciaries If losse
are sustained. they bound. by every cOnsidera
Hon Of honesty and fair dealing to bear them; bu
a...fl
liable the stockholders will pocket the profis, an
When through their mismansgement or fraud, tn
hank fais or its psper depreciates the note holder
are forced to sus ain the losses Banking is purel
the speculation of the stockholders, and they mus
anour its hazards if they would realize its profits
Indeed, where the managers Of a bank are dis
pssed to act fraudulently, they may enrich them
1lves by getting in circulation the largest amour
az their paper possible, suspend payment, discredi
ne paper and buy ii up at mere nominal rates, o.
Rocket the assets and leave their creditors TO lool
20 the empty vaults Of the corporation for satisfac
tiop of their claims. Make them individually lia
bic to the creditors and they will have no motive
- discredit their own paper, for they will be bounC
a make il good to the holder, and you will thu
secure much more prudent and safe management
of these institutions than we have had under thu
present system
Sirfh-Reouire the registration and oountersign
inR of every note to be issued by bank, by thu
eminent BIZ which means the public can, at al
times know the maximum circulation Of every banl
40 the State aad it would 60 far to prevent owe
ISSUES
SsUsnlI-The creation of a Board of Supervisors
consisting OF three competent men, who shall hsv
the power 20 enter aud examine the condition o
every bauk in the State al any time, and whose du
AZ shs be 20 dc at least quarterly, and report
through the columns Of some newspaper at Nash
Vile their true condition, that the public ma
know the real condition Of the various banks, an
10 what extent they are worthy of confidence.
The only information the public has as to the con
;ajop Of banks under the present system, is throug
the REPORTS Of their officers, who sre interested il
T,akinc the most favorable report possible, an
whilst in q great majority Of cases, these report
are honestly apd fairly made yet, il sOme they ar
not; and the people are deeply interested in, ar
hsye right to know, the true condition Of ever
hank in the State
Rggkh Make the suspension of specie paymen
for the term Of twenty days. or the violation Of an
provisiOn Of the Of incorporation forfeiture
charter and give the supervisors the power, whe
shsv shall be satisfied by full examination tha
apT bank hao thus suspended or violated its char
aar and that the security Of the public interest
y.ands It, 10 attach the assets Of the bank for th
hspeft OF CREDITORS and to proceed at once to pros
.snte the bank to a judgment of forfeiture. Max
4 also their duty 10 report to each session Of th
Teg;slature and to recommend such reforms 8
thsy may deem necessary to the perfection Of IL
system
Niath.-Suoh penalties and forfeitures as will il
unre a strict observance of, and conformity to, q
Of the above, and such other restrictions yo
may see proper 10 impose.
With these restrictions imposed upon the bank
nag system OF the State, our currency must becOm
Duea more uniform, sound, aud reliable, than
has been hcret fore under the present banking syt
tam and, undec these restrictions, stOckhOldeJ
have an ample margin for legitimate and highly re
muneraivs profits.
while it is indspensably necessary 10 the securi
A. Of the public that the people should bold Legis
lslive control over and have the power 20 protsC
themselves from injury resulting from imprope
ractices Of these us tutous, by guarding, restrc;
5ng or abohshinE such banks as they may see'prope
A. Charter, yet it is:eOnhdeutly believed that til
state should not engage in banking. or any Othe
Apsiuess or speculation in competition with he
Sdhyens. with view to money making. In add
sion 70 which il msy truly be said, thAtyon rarel
And the same amount Of care and energy exercise
an the execution Ct spublio trust that is common
be prosecution Of private and individual enterprise
and As an investment it is confidently believed tbs
X the entire property of the Bank of Tennessee va
..a,o-,o5 ;r,a money and with the capital Of th