Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1860-02-05

3 goid ana silver. Il would prevent poor and uni
. formed persons from being defraudec By broke
: banks and forgeries. For it has been observed
al the world that there Is more fOrgeries Of smi
? notes than large ones, because they are not
closely noticed; and fraudulent banks resort most
g 70 small notes because they can get out SIN.
3 notes where they cannot get out large ones,
cause people will not take any large notes but
good one; but will take a small oue without exs1
ming II. Again, small notes drive all the spec
out Of circulation. Mr.. Webster, in 1882, toe
ground against small notes because their prohib
ton left specie in the hands Of the people, and thu
strengthened banks against suspension. Mr. Wei
ster called the attention of the ADMINISTRATION {
Gen. Jackson to the suppression Of small notes
his proposition to reoharter ,b United States Ban
IN 1882 Mr.. fancy, Secretary Of the Treasury
urged 1t. jackson, Benton, Woodbury., Calhoun
and Bucharan urged The suppression Of snail notes
Mr. B'ddle, sworn before a committee Of Con
gress suggested the circulation Of small notes a
one Of the great defects Of cur currency RIO
mans Dictionary, volume l, page IA Bui, sir
while favor the issuance Of 10 notes OF less de
nomination than ten dollars, there are others upor
TINS hooF who are in favor Of small notes. Now
SIR, II the power existed, am not wiling to say
TO them that for the next fifteen years The Legisa
ture shall not have the power 10 authorize small
notes If the interest Of the State demands it, lam
IN favor Of retaining the power in the haGds Of the
Legislature TO regulate this subject Ifthe opinion
'A@0 q OauA cAaftUr Is Q CONTRACT De correct, aud
I you authorize all banks now inc0rparated or
which may hereafter be incorporated. 10 issue
notes as low as enc dollar, and It should appeer
that Il lead TO frauds and sorgeries that il drove al
the specie out Of circulation produced suspension
and made it harder 10 resume If it should so hap
pen that every Legislature which should meet for
the next fifteen years, should Ue unanimously in IA
Vor OF their suppression, teoud not be done You
the night to regulate the currsneJs This I N
never agree to Co.
But, Mr.. Speaker, l am opposed to this bill, be-
cause there is individual liability Of the stock
holders, or other security 10 the noteholder We
are told if you require individual liability that il
will drive capital out Of the State. This is the
stereotyped objection to every reform in the cur
reucy. We hnd that other States require it. Macs,
Vermont Connecticut, louisiana Michigan Min
nes9ta, Missouri Wisconsin Virginia, Florida and
other States ali require individual liability Of the
stockholders, security for the payment Of their
issues. The idea that all paper money would be
put down by making the private property Of stock
holders liable is so destitute Of either reason or ex
perience to support it, that it seems strange that
such an idle fsilacy should be put forth with any
expectation that It would meet with credit from
any quarer whatever.
McCulloch, in treaties on banking, says: s.The
American banks are all joint stock associations
But instead Of the parties being LIABLE as in Eng
land, tor the whole amount Of debts Of the banks
they in general, only liable fer the amount Of
their shares, or some fixed multiple thereof. It's
needless dwell on ne temptation 10 commit fraud
held cut by this system, which has not single
counlerVailing advantage 10 recommend IT, The
worthiessness Of the plan which banks wee
founded, vas evinced by The fact that between
1911 and LIST Of May, 1885, no feWerthan IC5 banks
became altogether bankrupt; many Of them paying
only sn insignificant dividend"
lie says he 'fears it IS impossible to establish q
paper currency which should a. all times vary in
amount and value, a. if It were metallic. But the
States have 1t IN their power to do that which is
the next best they may require all banks which is
sue notes, TO give security for their issue. This
though it would prevent destructive oscillations
in the amount and value Of the currency would at
all events, prevent those TunJus and ever recur-
ring stoppsges and bankruptcies Of the issues Of /
paper money, that render the American baking |
system one o. the severest scOuTges to which any |
people was ever bjteted lie states further. /
shat notwithstanding the fertility Of our soil, the
freedom Of the people from oppressive taxes, and
,ther advantages, private fortunes are more inse-
,ure IN the United States, than in any country ia
Europe aud this ne traces to the gqm5Liaq sysem Of
aHkiHg which is set foot by the Legislatures OF
he several States, in direct defiance of the expert
nee of the past"
What has been the cause Of all this mischief?
& certainly has not been because men who have
een engaged in the business Of banking are worse
nan other men, for do not believe such is the fact
{ is traceable a reckless exemption of this class
f business men from that responsibility to meet
heir engagements, that other citizens are under.
he whole history Of the country disproygs the !
tatement that the subsection of bank stockholders
0 individual responsibility would put down banks
lore than thirty years ago, when there was no
law IN Tennessee against banking q
rm OF merchants entered upon the business Of
ankiug in Nashville without any charter In 1888
his firm of Woods Yeatman & Co., made ana puU-
~ a.
heir liabilities were S154 63y; their means 81
O8 1888. Judge White in the United States Senate
aid that he could travel all over the United Stale;
nth the notes Of this banking house without the
iscount Of one cent. When l consider What spls I
mount of capital there must have been at that
ime in Tennessee, compared with what there now
8 with her extensive and Furnishing cities and
owns, her widely extended fields, her long line e
airoads; when 1 consider that the wild savage mad
ardly left my own division OF the Stare now in the
ighest state Of profitable cultivation when con
der these facts, 1 an amused at the declaration
Ow made, that We should have insnficieucy Of
sper money if the private properly OF stockholders
as made liable for the issue OF bank notes
But, Mr. Speaker, [ oppose this bill because it
My allows six per cent interest & the note holder
lille the banks are in a state Of suspension; il |
lows the banks to remain in suspension for one
undred aud twenty days, and only gives 10 the
0te- holder SIX per cent interest Under the pre-
ote-holder is entitled, believe, to twelve per cent
lille they remain in suspension. All meu are en-
tied to six per cent On the n0n-payment Of a note
ne on demand But when bank note is not paid, !
is generally much greater injury than the non
ayment of any ether note; therefore TO remedy q
lis wrong and injury TO the nOle holder they gave
yelye per cent This bill brings il doWnto six per
snt. Biddlt, when before committee of Congress
, which have alluded said banks should be faxed
gelve per cent as in the case Of the Bank Of the
nit States, or twenty four per cent as IN other
lses while ia suspension. This as he said would
cprve the banks Of ali temptation to suspend pay
ent Banks can make more Ia q state Of suspen- o.
on than they can when paying specie. Il is
ler interest always 10 suspend anu il is the iLteH
II of bank debtors who pressed, but the coun-
y at large is ruined. Give the note-holder, who
the real sufferer, heavy damages, aud thus make
too extensive TO remain in suspension. Missouri |
,qures The banks to pay twenty five percent TO The
ote-holder, if the hOIe be protested. Taking oil |
lie provisions Of shs bill together, and it looks as
it contemplated suspension Of specie payment |
nd was intended to afford an easy door glide into
The constitutions OF New York, louisiana and
slieve other States declare that the Legislature shall
ave no power to sanction suspension Of specie |
ayment The nots-holder ought il justice TO re-
si7c damages equal to the depreciation The UOle
Ight to be made good n him as if it were geld.
But again, Mr. Speaker, this bill allows banks to
Election. Wherever m0u0pgl.es exist it is uecel-
Try to make restriction by law 10 prevent things
hich competition would il other cases prevent A
W large banks monopoze in a measure, the e1-
lange business. This bill allows them to charge
hateyer they consider reasonable, or in other
ords what they please for exchange. This opens
he door to the most extensive frauds Exchange
what il costs to carry and insure money from one
oint TO another. The Massachusetts Bank Commits
Oners for 1859, say that the grossest usury is
raCticed under he plea Of reasonable rate Of ex-
lsnge This bill, Mr.. Speaker, proposes to give
iditOual safety TO the nots-hOder either by
Individual liability or by security
It proposes to reduce the damages to the note
older, on protested notes, from u per cent,
S heretofore stated, to 6 per cent, no matter
oW great may be the depreciation Of the bank
Otes.
1t proposes to allow banks to charge an indefinite
mount Tor exchange.
1t proposes 10 open too vide door to suspension
nd too ready al escape from it.
And, lastly, it leaves, in my judgment to some
xtsnt, doubtful as to how far the errors Poih'eu
ut may be corrected By future Legislatures
For these reasons | must vote sgainst tne system I
Tbich this bill proposes and submit myseh ooeul-
atly 10 the judgment Of my Constituents
HEND son RRO's.,
-.~,.r urUUTRFERS