Brownlow's Knoxville Whig. [volume] (Knoxville, Tenn.) 1866-1869, 1868-01-01
The Bank of Tennessee Question.
NAsHYILLE. d.. I'd. I'd


NASHVILLE, Dec. 20, 1867.
10 the Editor Of the K,orriIIe Whig;
The communication Of Hon L. c. Houk, which
appeared in your paper Of Dec. 4th so far as re
lates 10 the bill introduced by Mr.. Doughty TO pro
vide for the redemption of the issues of the Banl
| Of Tennessee, deserves notice, more on account o
the Importance Of the measure than the manner il
which it is presented. The communication, in if
general tone, is an appeal to prejudice and passion
and not to the reason justice and intelligence of thu
readers of the WBIG
Judge Houk terms the measure great trauC
attempted to be perpetrated for the benefit of rebels
and monied aristocrats." He says a more infamous
fraud was never attempted than the provisions o.
the bill contemplated, and cites as one of the "bare
faced niquities Of the measure the provision thai
the bills or notes of the Bank Of Tennessee must b
presented in sums Of one thousand dollars before
they can be redeemed, and that TO intensity NAM
moth rascality law is to be enacted by which the
rich are to grind the faces of the poor 1t is said
the writor remarks that there are 50 Of this
money represented in Nashville by probably less
than fifty persons, who have purchased these notes
for trife II is easy when measure of gravep pub
JIG concern affecting the credit of the State and the
interest Of the people presented to the Legisla-
ture, TO render it somewhat unpopular by wholesale
Remuneration of the measure, by abusive epithets
and appeals TO passion and prejudice 1t is equally
easy to assume the truth of propositions which are
| utterly unfounded nd build thereon a plausible
set Of objections to what is proposed before those
charged by their constituents with the duty of pro-
posing investigating and passing upon the meas
ure, have had an opportunity Of looking into its
merits. Judge Houk and every other citizon of the
State, has right to crticiae this or any other bill
introduced before the Legislature but his good taste
IN his denunciatory commentary upon the meas ure
may be seriously questioned. And certainly he has
no right to mistake the facts or to bring into public
odium members of the Legislature who may adyo-
cate the BILL by denouncing the measure as a giant
fraud, and by appealing to the prejudices of the
poor, whom he assumes are to be swindled by mon
led aristocrats.
The history Of this Bank Of Tennessee question
is, think, generally understood and in relation to
that branch of it which may not be 50 thoroughly
comprehended by the people of Tennessee. 1 pro-
pose to speak candidiy and fairly addressing my
self to the reason and calm judgment of your read
ers. The writer has not dollar of the notes of the
Bank of Tennessee, and no pecuniary interest what
ever in the question before the General Assembly.
The only interest he has in il arises from the desire
to see his native State prosper her good faith main
tanned, and to prevent if possible in due time Sc
rious results which may affect the present State gov
eminent and its operations. When the Bank was
chartered in 1888, the State furnished the capta of
the Bank placing in that institution the School and
Internal Improvement fund, and became the owner
of the institution which her Legislature had crea.
ted. There was no stock in the institution owned
by any individual or corporation. The trust fund
constituting the capital of the bank was held.by the
bank, and Of course the benefciaries had rights in
the srust fund held by this creature of the State.
The State, when the bank was chartered, with tho
view of giving credit TO the institution provided
that the faith and credit of the State was pledged
for the support Of said bank, and to supply any de-
hcency in the funds therein specially pledged and
to give indemnity for all losses arising from sucb
deficiency In addition TO this pledge Section 18th
was inserted in the charter which is in the follow
ing words "That the bills or notes of said corpor
alton originally made payable, or which shall have
become payable on demand in gold or silver coin.
shall be receivable at the Treasury of this State and
by all tax collectors and other public officers in |
all payments for taxes or other monies due the |
State"
This provision remained in force until the year |
1865, when the 18th section was repealed. During |
he whole Of the period from 1888 to 1856, this 18th
section was in force, and the opinion obtained gen
orally that the State was bound to take the issues of
he bank mentioned in The 9th section Of the char
err in payment Of taxes and other dues TO the State
they we're never rendered to and refused BY the
State for nearly quarter Of q century, because du-
ing that time with the credit given by the positive
pledge Of the State CONSUMED the first section Of
he charter, and the provisions in the 18th section
he notes being at par or within one or two per cent
# par, question, under the 18th section Of the
harer of the bank did or could arise, especially as
he issues we're received at par at the Treasury In
SCI, however, the rebel Legislature voted to issue
Is, 600 900 Of the notes Of the bank, as a part of
heir Inflated scheme Of rebellion, and the bank,
which was under the exclusive control of the State
was with It's coin and movable assets
arTied TO the Southern Confederacy and those as
cts scattered by tie faithles managers of the nst-
ution The remnant Of these assets, including
446, 1870 in coin, were captured in Georgia by
he U. S. forces, brough. to Nashville and placed
q charge Of our Governor and the Comptroller and
treasurer, and held by them until the Legislature
which shortly thereafter assembled, took charge Of
THAT remained of tina. potent political engine
nown as the Bank of Tennessee.
Of course the bona ide Issues OF the bank under
be operation of rebel legislation, which increased
he amount Of the issues S5,o00,0oo, and under the
feet of the squandering process which had been
Ding on during its ourreyings in the Confederacy,
whatever msy have been the confidence Of the peo-
lie in the pledges give1 by the State were at
eavy discount, falling as low as 20 cents on the
ollar, and selling in the market at from 20 to IS
ents on the dollar, and not st from two to thirty
ents, as stated by Judge Houk
The Legislature had taken charge Of the bank,
nd after providing that the proceeds Of the gold
rought from Georgia should be held as part Of
he School Fund, directed that trust assignment
all the assets of the bank should be made, and
le institution wound VI, which is now in process
T being done under tie orders Of the Chsncery
ourt at Nashville, in which Court bill has been
led by the Trustees Of tie bank for that purpose.
Certain merchants Of Nashville, who held the is
les of the Bank Of Tennessee, formally rendered
lem 70 the Clerk Of the County Court Of David
N county, as collector Of the taxes due from said
erchants, in payment 81 the amount due from {
lem 10 the State on their purchases and for the Z
'iviiege OF selling goods and merchandise under
e laws Of the Stste. Tho Clerk refused TO take
u Issues Of the bank then rendered, and thereupon
e parties sued out a mandamus in the Circuit
curt to compel the Clerk 70 receive them under the
tn section Of the charter Of the Bank Of Tennes-