Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1859-10-06


troll of thel profits accrue they are
the benefcianes;- If losses are sustained !
they are bound, by every consid ration of
honesty and fair dealing, to bear them; but
without some provision making them indi-
vidualIy liable, the stockholders will pocket
the profits and when. through their misman-
agement or fraud, the bank fails or its paper
depreciates. the note holders are forced to
sustain the losses. Banking is purely the
speculation of the stockholders, and they
must incur its hazards If they would realize
its profits.
Indeed, where the managers of bank are
disposed 10 act fraudnlsntly, they may en-
rich themselves. by getting in circulation the
largest amount Of their paper possible. sus-
pend payment, discredit the paper. and buy
it up at mere nominal rates. or pocket the as
sets aud leave, their creditors to look to the
empty vaults of the corporation for satisfac-
tion Of their claims. Make them individually
liable to the creditors, and they will have no
motive to discredit their own paper. for they
will be bound to make ii good to the holder,
and you will thus secure a much more pru
dent and safe management of these iustitu-
tions. than We have had under the present
System. IN -LF If
3 SEdhg REQUIRE the registratit n and coun-
tersigning OF every note to be issued by a
hank, by the Secretary of State, or some other
officer Of the government, by which means
the public can, at all times. know the maxi
mum circulation of every bank in the State,
and il would go far to prevent over issues.
/ sSecenth The creation of Board of Su.
pervisars consisting of three competent men,
who shall have the power to enter and exam
inc the condition of every bank in the State,
at any time. and whose duty it shall be to do
so at least qu artery and report. through the
columns of some newspaper at Nashville.
their true condition. so that the public may
know the real con dition OF the various banks.
and to what extent they are worthy of con-
fidence.
The only information the public has as to
to the condition of banks under tn. present
system. is through the reports of their officers,
who are interested in making the most favor
able report possible, and whilst in a great
majority of cases, these reports are honestly
aud fairly made, yet, in some, they are not;
and The people are deeply interested in, and
have a right TO know, The true condition of
every bank in The State. #E
Esghh.--Make he suspension of specie pay
M nj Tor the tel IN of twenty days, or the vio-
lation Of any provision of the act OF incOrpo-
ration a forfeiture of charter, and give the
supervisors the power, when they shall be
SAITH fed 10y a full examination that any bank
has thus suspended or violated its charter,
and that the security of the public interest
demands it, 10 attach the assets of the bank
once 10 prosecute the bank 10 judgment of
forfeiture. Make ii also their duty TO report
10 each session OF the Legislature, and 10 re-
commend such reforms as they may deem ne
ssary, TO the perfection Of the system.
Ninth.-Such penalties and forieitures as
will insure strict observance of, and con-
iOrmity to, all of the above, aud such other
restrictions as you may see proper TO impose.
With these restrictions imposed upon til"
q
must become much more uniform, sound, aud
reliable, than 1t has been heretofore under the
present banking system, and under these re-
stricIiOns, stockholders have an ample mar
gin for legitimate and highly remunerative
profits.
While II is indispensably necessary 10 the
security OF the public, that the people should
hold Legislative control over and have the
| power Ia protect themselves from injury r.
suiting from improper practices of these Ia
situations, by guarding restricting, or abolish
| ing such banks they may proper to
Charter. yet il is confidently believed that the
| State should not engage in banking or any
other business or speculation in competition
| with her citizens, with view to money
| making. In addition to which, it may truly
be said, that you rarely find the same amount
OF care and energy exercised in the eXcu'
| ton of public trust that is common TO the
prosecuting of private and Individual enter
prise: and as an investment, it is confidently
| believed that if the entire property of the
| Bank of Tennessee was converted into money
and with the capital of tn bank invest in
| the six per cent, bonds of the State, thai
| it would result ultimately. in more profit tC
| the Treasury than our present. or any othrl
| sy stem of government banking is likely Il
| do. Thus furnishing, to tnat cXt"nt, a home
| market for our State ST curitrs, already de
| pr, ciated for the want of it, and Kidding the
Stat government of the expensive and de-
moralizng machinery of n banking institu
ton, and of the hazards necessarily medical
to he banking business. as -'
The President aud Directors of the Bank
| in their report to the last session of the
| Legislature, says, that the true interests u
| the State will hereafter be best promoted by
| a dissolution OF all connection with the bank
! or internal Improvement companies, at al
| early period as the Frances OF the State will
| admit OF IL, without unnecessarily depressing
the people, aud with due regard 10 the public
faith pledged to them"
| In This opinion fully concur One millioI
of dollars of the capital OF the bank wa
raised 10y the issue aud sale OF that amour
| of the bonds of the State. These bonds fal
| due in 1868, and must be paid either by taxa
ton or out of the capital of the bank.
have no doubt that the true policy of tn
| State will be found in winding up the Banl
OF Tennessee at the expiration OF Its charte r
and leaving the business OF banking to pri
vate enterprise, under such guards and re
strcIious as the Legislature may. fInm tim
| to time, see proper to throw around it.
| For statement of the business, profits an
| condition of the Bank of Tennessee yon ar
| respectfully referred to The report of the Pre-
| silent and Directors.
! In this connection earnestly RECOMMEND
the adoption of resolutions, proposing so t.
amend the Constitution of The State. as t,
1 prohibit the Legislature from charternG
banks or other speculative corporations
4 without reserving the power to amend, modi
| fly. or repeal the same.
Without such constitutional prohibition, &
single session of the legislature favorable t.
the policy. may fasten upon the State any
number of corporations of this character. fol
half century, depriving the people of the
| power to control or to abolish them. how
| ever much every member of the community
| NAV feel the absolute necessity of doing so
/, The Importance of the subject demand
that repeat to You a recommendation which
l had the honor of submitting TO the Legis
| lature at its last session, OF ''an amendment
| OF the Constitution of the State, so as TO 6x
a reasonable limit, beyond which the Legis
lature shall not go. in creating debt or IL
| ability OF the State, without first submitting
| the question directly to the people, except in
cases of invasion, insurrectiOn, or rebellion
Slch an an rndmeBt is certainly wise and
| proper in itself, securing to the peOpletht
rigntto lie consulted. and to determine for
tn mseives. by popular vote. whetherIhey will
take upon themselves the liability proposed
or.not; especially in view of the tact that Our
gisative elections are generally made to
turn much more upon party considerations
| aud e / raj politics Than upon local or State
| policy. and most OF the questions, out 81
which have spung these heavy liabilities
have beel very little discussed. If, indeed
they have been discussed at all. before the
people, previous 10 their enactment.
Another salulary effect following such an
amendment is, that IL would inspire conf
| dence in such securities as the State has is