Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1867-11-23
BANK er rENNEssEE mosEx.


shonld be resorted 10 by any lover Of his
state to relieseit of it's obligations. There
Ia prevailing impression that there is q
moral obligation upon the State, indie
pendent OF the tax clause in the charter OF
the bank, to redeem the circulation of the
Bank Of Tennessee. A statement Of facts
must certainly dispel this impression. The
Bank of Tennessee ia a corporation. char
tered by the State, separate and distinct
from the State. 1t il not a mere agent
OF branch Of the State government for
IL esn sue and be sued, its property can be
attached or levied upon whereas, State
or Its mere agent, cannot be sued and its
property cannot be attached or levied upon.
The Bank of Tennessee is a corporation.
with ali the powers and Liabilities of SINH
lar corporations. Ii is true that the State
is the sole stakeholder, bat this does not
make its liabilities any different or any
grester than the Liabilities of the stock
holders OF other banks. The State has
performed all its obligations as stockhoI-
der. Ii subscribed its money and faithfully
paid it, and has fulfilled all its other duties
as a stakeholder; and if the directors of
the bank have so managed its affairs az to
put IT ont of its power to redeem its circu-
lation, the State is no more liable to the
note holders than Wonld be the stockhol-
ders of the Union and Planters banks
under similar circumstances.
But it is said that the State is bound to
receive the notes of the Bank of Tennessee
in payment of taxes to the State. This is
founded Upon the following clause in the
charter Of the bank: "That the bills or
notes of the said corporation, originally
made payable, or which shall become paw
able on demand in gold or si7yer coin, shall
be receivable for taxes" Is this a con-
tract with the note holders, or is it a con-
tract with the bank alone? We contend
that it is contract with the bank alone.
Suppose property-holder in the CITY of
Nashville should enter into such con-
tract with one Of the national banks, the
bank on its part obligating itself to issue a
currency payable in gold or siluer, and the
property" in consideration of the
same agreeing to take his rents in such
currency, most clearly this would not be a
contract between the property-holder and
his renter, but a contract between the
propertysholder and the bank, which cons
tract they might at any time reseind, and
from which the property holder would
certainly be released whenever the bank
should fail to redeem its currency in gold
and silver. We contend that the obliga-
lions of the State are precisely the same as
would be the obligations of the property
holder in the case above supposed. That
the contract of the State is solely with the
bank that the bank failing in its obliga-
ton to furnish redeemable currency, the
State is relieved from its obligation 10 res
ceiVe its currency in taxes that it has a
right at any time to rescind the contract
with the bank. This contract was reseinded
by our Legislature in the year 1865, and
no person acquiring this currency after
that time can offer il in payment of taxes :;
and such was the decision of our Supreme
Cont upon this latter point, and such is
the very recent decision of the Hon. Judge
Irigg of the Federal Court in this State.
As to the effects of redeeming the notes of
the Bank of Tennessee with the bonds of
the State, y asserts that it would increase
the circulating medium of the State.
The notes of the Bank of Tennessee are
now somewhat in the nature of a circulst-
ing medium, for they readily pay debts
for about one'third Oftheir nominal amount.
If these notes should all be reduced and
cancelled by the State, the notes as a circu-
lating medium would disappear, and CON
sequently the circulating medium would
be greatly diminished, and not increased
as a contends. Another most extraor,
binary position assumed by Y, is that ''the
chance to convert the notes into interest
bearing bonds will increase their value.
will make the State Bank in better condis
ton by enabling it to collect its claims"
That is to say, debter of the bank can
pay his debt more easily when he can buy its
notes at ninety cents on the dollar than
when he can buy them at thirty cents on
the dollar. This is certainly most won
derful discovery of A, but we doubt whether
the debtors of the bank will appreciate
the value oft.
Under the proposition of X-tbat the
State shall redeem all the circulation of
the bank-when this should be accom-,
plished and the notes withdrawn from
the debtors of the bank would have to paw
their debts in greenbacks, dollar for dollar,
whereas they can not pay their debts at
about thirty cents on the dollar in green.
backs. Their Indebtedness would there
fore be increased about three fold. This
would certainly be most disastrous to the
debtors of the bank, and it would be almost
equally disastrous to the bank itself. for
there would be numerous debtors who
could pay their debts in Tennessee money
at its present depreciation, who could not
DO 30, and who would despair of doing go.
if they should be compelled to paw their
debts in greenbacks, or in Tennessee
money that would be increased to nearly
he value of greenbacks. -
Is it just to call upon our Lawmakers to
egislate against this debtor class and in
avor of class whose wealth and shrewd-
less has enabled them to bag up at least
our-htths OF the notes of the Bank ITEM
lessee at an enormous depreciation? Most
urely the true policy of our State ia not TO
egislate between those two classes at all.
'ut to let Tennessee Bank money have it's
roper value in the market. Give the
Iebtors of the bank an opportunity, with
ut interference, to buy up its notes at
heir deprecated rates and pay their
ebts.
This policy will greatly increase the
mount of the notes that wonld he ra-
edeemed by the bank, and after all has been
ccomplshed by this course, if there
hould be any outstanding circulation, and |
should be thought hest for the lawmakers
D legislate upon the subject, they could do |
0 without efecting injuriously or I'M
lstly either the debtors OF creditors of |
he bank.
Can it be possible that X is fully aware
f the extent of his proposition. The out
landing old issues of the Bank of Tennes-
se are at this time little upwards of two
lillion and eight hundred thousand dol.
hrs. 1t iswell known that q large amount
these issues can be redeemed ont of the
ebts due the bank without oppression TO
8 debtors, and yet the State is called upon
} redeem this circulation by the issuance
its bonds. To do this the State would
ave to Issue its bonds to the amount of two
illion eight hundred thousand dollars
hich bonds must all be paid in green.
lcks, and by taxation; and to pay the in
rest on these bonds, the people Of the
late will have to be taxed annually
Sl6s,000,l one hundred and si1ty-eieht
lousand dollars in greenbacks, and the
ate is called upon to issue these bonds
this, the most critical period of its fnan-
al life, and to subject itself to this heavy
ID oppressive annual taxation when the
lrdens of the taxpayer are already too
eat to be borne.
That this should be proposed By foreign
ecrlafors who cannot he afTecfad bz Il