Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1861-01-11
COMMUNICATION.


he DeAt tuttIeblt 81 Inc Wnoto Community Qc-
naBded tAat cur banks Should have suspended spe-
Gle payments WHEN they did, and they now demand
that they should remain in a suspended condition
until st least the Ist Of Jaiy, 1862 In proof o.
these positions we win stsie few facts.
First. Thea of Che necessity for suspension Of.
specie payments.
Tennessee hes had. two failurss Of CROPS 10 suosa
cession without corresponding failure, -even
falling of Ofimpofls Of foreign merohAndiss. This
has thrown the balance of trade largely against u.s.
and consequently kosEr [coin or its equivaleat)
has had to be exported 10 pay ibis balance. In
der that il may be understood then, what we mean
by exporting money, and to show the effect this has
upon the circulating medium of the country we will
show the prscsicsl workings ofimports and exports
BY illustrating them thus: Suppose A. B. PLAN.
Ter of Rutherford county, Tennessee, raised for
market last year. one hundred bales Of cotton,
worth, when sold, four thousand dollars (S4000),
and that bis expenditures al for articles mported
amounted to jus! that sum. Hs would be able to
liquidaie his whole Indebtedness when his cotton
was sold, wiihOu. disturbing lesseniug the qusn
tity of money thea 10 circulation. And. again,
suppose this year ne Oaly raised fifty bales
expenditures 10 two thousaud--he could again
iquidste the whole of his indebte insss cut OF the
proceeds crop and SO not disturb or lessen the
quAnty Of money il circulation Bot nov let us
suppose The crop of the sane PLANTER is reduced
this year to Fly b1.es worth tvs thousand fS2000)
dollars, while his ex osnditures the sams they
were last year namely four Thousand S40O0) dol
lara. This wouli leave g balance agsinst him aud
in favor Of foreign country Of two thousand
($2Ooo) dollars To pay this balance he would be
forced on the money market in some shape or other
either By borrowing money from those who had it,
collecting debts due him, The sale or some 9th
er species Of property. Ia either he would be
9 cOmpstitos for moaey, and the money when obtain
ed would be svet oul Of the couairy This opera,
tion would just reduce the circulating medium Of
the country two thousand $4,000 dollars. Now
let suppose this latter condition Of one planter
b., to be that Of the country gsusr ally just al this
time. Would no. such demand for money soon ab-H
sOrb the most of the circulating medium ofhe cOun-
try! Every dollar that fsllinto the hands Of those
who owed fsrsign debt would reduce the money Of
the oountry jusi that much. Z Anlt who owed
saly hundreds OF dollars, and yet owned thousands
Of dollars in llnd negroes 81, could no. pay ID cir
debts because they cOald net get the money o.
ing TO the referred TO- and similar ones this
expectation Of money had bees going on here until
the circulating me ium Of the country vas in Nov
vember last, reduced greatly below the actual
requirements Of he people Ju,t at that time the
result ofthe Presidential election caused apoIiiica
panic WhichsO completely destroys nfasDce in all
credits, that large number Of those who had de-
posts in cur bapks,or hsId their notes drew the
coin and boarded it. Every dollar ofeoin SO drawn
and boarded was an actual withdrawal sf just 50
much money from the legitimate channels of trade,
without paying any Of the Indebtedness OF the
country Besides this it made It necessary for the
banks to withhold all discounts, and to call up
on those indebted to them 70 pay up. TIE code
under which the banks we're doing buginess required
them to keep in their vaults one dollar Of coin fer
every four go dollars Of their notes in circulation
As these proportions we're disturbed by the With
drawsl of con, they had to be squalizsd, either BY
an importation Of more coin or a eurlaiiment In
discounts. The banks could not have imported the
csin unless the people could hsve paid their bills
which furnish the banks with their coin Nor
could the people have responded TO the call from
the banks. necessary to keep spthe proportions of
coin and circulation required By the Bank Code,
because the money not in circulation to BIS had
st any price To show tAc utter impo,sibility of
this, will state the thus; say the coin of the
banks WIS reduc d TO six hundred thousand $780,
000) dolrs and the circulation 10 twesty -four hun
dred thousand 50 400 OO0) dollars, then for every
hundred III susand ($10O,0O0) dollars of coin with
drawn from the banks their debtors would be called
upon to pay Up three huDdred Thousand 1890 0OO)
dollars Of their Indebtedness to the banks which, if
they couId have done would have been the retiring
from circulation that amount Of the bank notes,
and this added to the hundred thousand $500 O0O)
dollars of bank notes returned for the coin, wonld
have made four hundred thousand $500 00O)
dollars of bank notes withdrawn from cir
oulatien. Such a contraction as this the country
was not in q coalition to stand, and if the banks
had continued to pay specie the result would have
been that they would have lost their coin, which
would hsva been bearded the eountry would |
have been deprived Of what little circulation it had
and the debtors Of the banks would hare been pro-
tested. The coun'ry cannot get along without
circua' ing medium 1T must have something 10 can
eel debts WITH something which has 6Tei and |
universal vslGe attached to il. And this is found in
sble to pay debts with property when TIE circu- |
latiug medium or mosey of the country hiss been |
exhausted, from the fact that does not know that
ne caa pas b al the price that be received it
fran At. Besides this, there is also the difficulty,
not TO say impossibiliy Of transferring subdividng,
&c. may be indebted TO B $l00, and B may be |
indebted to c $50 AMI to D $5e, A offers horse |
for $780, which is worth the money but B refuses
to receive tSe horse bscsu.e he csnAot divide him
between and D; but il A will ofsr D Q 500 note |
on bank that is considered good, will readily I
enough take that and exchange it for two $50 bank
notes. and With them he viii pay AID d. D took |
this 500 bank bill from because he knew that C |
and d would take il frsm him at the same. New, |
when tie banks suspended, the oouatry retained the
notes thea in circulation, and these who then held
them would use them in paying debts, buying prof.
erty or loanng it TO others, making it active. Be-
sides this, the banks could indulge those indebted
to them, loan hsir notes 10 dealers in produce dis
count gooI notes, Sc 80 and in that way keep up
or increase the circulating medium Of the eoustry.
Suppose ,w.d So 900, 10 various persons, that he
was known t, BE both wealthy and prompt, but owing
to failure of bis crop he could net pay Che s., 900
without borrswisg the money, aud Furthermore, sur
psse these to whom was indebted swed others,
ADD they 10 turn owed sthes, until the wbse Of the
Indebtedness dependant the pay nent ofthe $1,000
frsm A, amounted up to ten theusssd dollars w,uld
not loan to Of the $1,000 benefit all the parties
colsernsd fully much, nay, mere, than If each
had received loan, Of their proportion from the
bsRk? Asd IL, on the other hand, the banks had
been compelled to press their debtors, Wsuld not
the debtors Of the banks press those indebted 10
them and Sc on until tie whole country would have
fe I the pressure II the banks hsd esntiaued TO
pay specie they would have bee. compelled to press
o9ectiens and as the eoaary had bat little in the
way of Surplus pro luce TO pay WITH it is impossible
to tel what tbs depreciation in property would
hav. been. The real question 10 be canvsssei BY
thu baaks, in determining to suspend or MT 'us
pend, was Uhsther toe country should have circu-
lang medium, with which it eoild pay its debts, or
have ne circustng medium at all.
EEAsoNs WHY TIE TENNESSEE RANKS, HAVING ONCE
unrTD N n |