Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1859-12-12

state of a bank at different times is to take
a period of different years. To satisfy
/ myself on the point now under discussion, 1
called and examined the books of the parent
Office now and at this time last year.
fonnd that the paper discounts now, are
S3i2.S9S more than they were the same day
last year. l never heard that they were OPP
pressing the people about this period last
I year. ----.-----s--------., .--
1t is further charged that many branches
have ctrculation very small aad dispropor-
tionate TO theircapital. The Memphis branch.
for instance, is cited as having a capital of
| $500 600, and circulation of only $49, 658.
AT first blush this looks Ikea case of great
hardship. and of dire oppression on The part
of the parent bank; but when ills told to
this house (Which is the fact that the Men,
phis branch has circulation of S2S3, lS8,
that she has in her vaults 1928, $50, which
leaves real or outside circulation of S49,-
657, the case is very much altered. Now it
| is known to everybody that the branches are
free of the parent banks so far as its accounts
are concerned, and if body is to blame it
is the board at Memphis, and not the parent
board. presume the board at Memphis are
doing all they can. have no doubt the
counter note system Expresses them as il does
lother banks.
/ presume that every body knows that the
mode by which any bank gets the amount of
tered circulation and subtract therefrom the
amount in vaults, and that gives the out
standing or real circulation.
/ don't believe then that the pressure In
money matters is caused by any CONCERTED
action of all the banks. or by the voluntary
action of any of them. l know that the
opeI a ton of sl1is ueanter-nutr system is 10
render the larger part of the circulation of
the Bank of Tennessee useless to the COM
munity, by keeping it iu the vaults of banks
or travelling to points where it can be paid
out. The President tells us that the branch
notes are continually coming in. 1t will
certainly be very expensive operation to
send them back daily to all the various
points where payable, and yet they are dead
capital until they are sent back. The whole
circulation of the Bank is ........ So, 279 268
In possession of Banks....... 1869 699
l.ss& sssf $500
! Actual circulation 81, 800 569
| admit that portion of banks regis
tered circulation should be in the bank, but
I certainly not the proportion of $40 900 IN, to
100000 out. Some person may ask, why
not loan out more? The answer is that it is
not at points where il can be paid ont. The
bulk OF circulation is always travelling back
ID points where it is available. | don't hest
tate to say that under this system it will take
double the bank capital and circulation to
do the same business. The President of the
Bank of Tennessee has Informed us that he
had over half a million of branch notes on
hand, and should he send them home as be
is doing constantly. they will be constantly
returning through the merchants to the pa
rent bank.
1t is also charged that the Planters and
Union Banks are contracting their circulation
TO produce hard times, in order that we may
| be forced to re-charter them. Let us see how
that is. The Planters Bank had over $780,
| 900 more in bills and notes on the LIST of De-
tober than il had LIST October, 1858, and since
| the LIST of October last il has still further ill.,
creased its loans, S444,0O0 Bat the gentle
men say that the circulation is less 1t is
true 1t is some less, but they have not taken
in their circulation without paying out its
equivalent; and this of itself could not have
pro luced hard times.
If they redeem their circulation by con-
tracing their loans, this would produce hard
times; but we see that they have been in
| creasing their line of discounts all the time
We see in these, as in the State Bank that
the specie has been falling off; and here we
discover the reason why the circulation is
less than formerly. 1t would certainly be
very bad policy in any bank to increase its
circulation when IFS specie is falling off.
An examination of the Union Bank will
show state of facts of same character as
the Planters, though not to the same extent.
| to extend accommodations to the country.
! The books of the Planters and Union Banks
. show that they had on the Esd Of November.
1859 S1,073,000 more bills aud notes than
they had on the Gath November 1859.
But it may be asked, IL the hanks are
doing the usual amount of discounting. what
| makes the times 30 hard? 1t cannot be de-
MED that there is considerable stringency in
the money market of this State. The first
| cause of this is in the operation of the counter
system upon the State Bank, running its
/ circulation into the offices of the banks at
different points where il cannot be paid out.
| The contraction of the circulation OF this
bank has like effect upon other banks.
Some of the banks of the State have wound
mp and Others are in process of liquidation.
Much ofthe private capital of our State has
gone abroad for investment, driven out by
the stringent interest laws of our State. The
| crops have not gone forward as early and in
| as large quantities as usual. The balance
of trade q mean the national trade) is against
US, causing a continual expectation OF specie
| and has the effect TO keep the country drained
the precious metals.
When gentlemen talk of bank reforms
am with them; for we would be ignorant in
deed if we could not learn wisdom by ex-
| perience; but when they say they learned il
| all at the last session, | must disagree with
| them. | think there have been lessons taught
| anu IeaTDeu Since last session, ana one OF
| these lessons is, that the bank act of last
session. so far the counter note system is
| concerned, went too far; that il is beauti-
| full system in theory,but too hard for practice
| at this time. They found the banks in trouble
| in suspensions; and instead of legislating TO
| relieve and strengthen them, they thought
il was their duty to make war on them. The
| banks were not in suspension from weakness,
| but because they did not wish to Cypress
tha .,.t.la fh.iE nsar nLre
much stronger than the Kentucky or South
Carolina banks were.
1t is a fine thing that some OF the banks
had chartered rights. had vested privileges
that protected them from that radical Legis-
laiure, or this country would have ere this
seen the hardest times ever experienced in
Tennessee. Had all the bank charters been
repealahle in their natures, we would have
had inevitable ruin, IL not relieved by cali
ed session Of the Legislature.
In legislating for the note holder il will
not do TO wholly neglect the interest of the
bank. If you take this narrow view of the
question. you will so cripple the bank that
il cannot afford accommodations to the bor-
rover, or ii he is already borrower he will
be br ken down, because the bank is unable
to indulge him.
That form of counter note currency pro-
posed by The bill in lieu would relieve the
parent bank BY allowing il to pay out its
own counter notes of~brancheS. hat this
would give no relief TO the branches what
ever. IL relieves The customers OF m parent
bank hat will afford no relief 10 10, borrow
er of the branches. That bill still confines
the branches 10 their counter notes. that
these notes may be scattered all over the
State, and ven carried by travellers TO other
States, while the parent bank can use all the
notes of other Institutions. ask th',se
members who represent counties having
branches, are they willing for their people &c
be oppressed While those who happen 10
be lucky enough to live around parent
bank shall be relieved. The amendment,
offer. while Il sticks substantially to The
n..so zvafaKa ltsora -.ff.f IN n