Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1860-11-27

ment alarming and distressing to all classes Of so
eiety. few facts will better illustrate my mean
ing. In examining one of the Branch Banks at Mem
phis, found, that for sOine time previous to the
date of my examination, Che Bank had discounted
cotton Bills 10 the extent of about two hundred and
thirty thousand dollars per week. The Bills taken,
were based upon actual shipments Of cotton bought
at fair drawn by first class men at
ed by first class houses in New Orleans, having but
thirty days to run, and yet such was the condition
OF things that the Bank, thus furniSAing the local
currency with which to pay for the cotton at Mem
phIs, had to stop this Inc of discount almost in
whole and why We win see by following the
basis Of this operation (he eottonl to another mar
kes When it arrived at New Orleans the Memnbis
buyer plsced it upon the market and his purchases
buying mostly for foreign markets. mus obtain the
local currency at New Orleans with which to nav
fc- it. by selling to the New Orleans Banks bis ster
Ting bills drawn upon credits furnished him by his
foreign correspondent
New Orleans having but little forelon trade nm
less these sterling bills find buyers in New York
1.-THE great focus of our foreign commerce. IL is
mauifestly impossible for the New Orleans BANKS to
furr'sh the local currency with which to nav the
known that there is now no market in New York
for Sterling Bills, except at runous rates The par
OF Sterling Exchange is, believe, 1904 the present
selling ate at New York is about IS, an actual dis
count of ii per cent, when it only requires a5out
one per cent to bring the coin from Europe to New
York. rate Of Discount so ruinous that Operators
can not and will not stand it. Thus the Memphis
buyer can not meet his bills, and must renew or 90
TO protest. and the Bank furnishing the local currency
with which the planter is paid at home is driven to
protectts circulation to use the gold in its vaults and
wait the uncertain result Of the original drawers
operation for repenishment Of the metal thus abb
stracted. Mauifestly Bank can keep out and pro-
tect circulation with the stream of metal thus
flowing all the while out of its vaults and none re-
turning. If, however the depressing influences
now operating upon the trade of the country did
not exist, the Memphis buyer would find a pErcha-
ser in New Orleans, the New Orleans buyer would
find sale for his sterling exchange with which to
pay. And with credit, in the Banks of New Orleans
equal to the amount of circulation to purchase the
cotton at Memphis. in favor of the Memphis Bank,
(Which could be ordered home in gold to replace
that used protect The circulation used in the first
purchase,) it would again be in condition to take
other bills and furnish the buyer with home cur
rency with which to pay the planter for his cotton
Thus would be produced an equilibrium in the
ebb and flow of the metallic tide. But, owing to
the disturbing causes above referred to- there is
dammiag up of the commercial stream at New York
the reflex action of which is a total destruction of
public confidence, more properly speaking, of
public credit, driving home the notes of the Banks
for redemption, causing the Banks to stop all dis
counts, and forcing them 10 collect the money due
them upon notes and bills previously discounted
This again causes the debtor class % push their
creditors. all resulting under forced sales to loss
In the price of property amounting in the aggre-
gate to a sum &c. alter than the value of one good
crop, and this too at a time when the country is
struggling under the previously imposed burthea
of partial failure in three successive crops.
The article of cotton is taken simply for the sake
of illustration the same facts obtain with reference
to all the other staples of the State 1t viii be OBJ
served, however, that in every the loss falls on
the producer The buyer, having to sustain loss
of eleven per cent on his sterling exchange in Or
der 10 obtain tire local currency with which to pur
chase, will of course buy and can only afford
to buy at a rate of price proportionately re-
duced. Thus, l agail repeat, the loss falls on
the labor of the county and the products |
of this labor being the true basis of all pecuniary
prosperity, depressed pecunisry condition must |
follow in exact alto with the depression of the |
great industrial basis.
There is still another cause deducible it Is true
from those already given. but which esteem wor
thy Of especial notice. By reference to the Bank
Code, section 9Th il viii De that each and every
Bank in the State is required TO Leep on hand an |
amount of specie fund equal 10 onsHird of its en-
tire liabilities. It further provided that in case
this specie fund shall fall short of this proportion
for forty days then all discounts shall cease until
such proportion is restored. The Bank of Tennes-
see and the Union and Planters Banks had, on the |
Isl inst in round numbers, two millions of specie
funds and their immediate liabilities, in deposits
and circulation, were five millions of dollars. From
this il will be that they entitled to an in
creased circulation had the country been in condi
ton to receive it, of one million Of dollars But
suppose ave hundred thousand dollars of deposits
md circulation returned to the Banks for spe-
lie and specie funds. Then the Banks would hold
lne and half millions of specie and specie funds
md their liabilities in circulation and deposits. by
aw, would necessarily have to be reduced to four
md half millions. For every dOla- thus returned
o the Bank for redemption, the Bank would be COM
leed, in order to keep in line to collect three dol
airs from lts creditors.
You are doubtless aware that all of the Banks of
he State, except the Bank o. Tennessee, Union
Bank, Planters Bank Shelbyvllle Bank, and the
Bank of Middle Ternesse, at Lebanon, deny my
authority to supervise them upon the ground that it
infringement of their vested rights mention
ihs fact account to you for my failure to
efer to the condition of any of the Banks except
hose above enumerated. OF the condition of such |
'anks as do not supervise have no other informa-
ion than their published statements and these facts
eng equally in your possession, respectfully re-
er you to them for information as to their condi-
on, expressly disclaiming, however, the knowledge
{ any fact going to the disrredit of any one of c
lem. I
The following statements of the condition of the
ank of Tennessee, the Union Bank, the Planters c
lank, the Shelbyville Bank, and the Bank of Mid
lie Tennessee, Iregard perfectly reliable having
great extent verified them by actual personal U
Examination
ondion OF the Bank Of Tsanessss aad BraAeGss Nash
ciRe, Ho0e1ater ], 1900 ! O
MEANS. q
accounted Eotss........... ..-.... 8, $50 S03 81
nmestc Bils....-,........ 1898 sos 10
ills and Notes in suit.............. sO3,529 81 4
ate Bonds Dscounted........-..... I56,SO4 u 8
hool Land Notes. 1856 81 AZ
5,O76ye3 40
Ne from Banks out OF the State. e4l,922 81
ne from Banks in the state.- 47y548 ~ 299, 476 IS
fanch Balances 1897 81 II
terest paid State BODds........- 50 81
d. |