Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1868-03-10

A Gard from Mr.. II. M. Avery,
~ 1a. Late Cashier.


It is due to to the people Of Memphis,
and especially to those who have honored
me with their confidence and friendship,
that I should state briefly the causes
which led to the suspension Of the Gay
oso Savings Institution, and my connec.
ton with those causes.
The Gayoso Savings Institution was
chartered by the Legislature on the 29lh
day Of February, 1856; was organized In
December Of the same year, and COM
menced active business in January, 1857.
Connected with the institution from the
FIRST, we're gentlemen Of means, eharac-
ter and integrity; and reputation for
fair and honorable dealing was soon es-
tablished, and large and profitable
business was secured and retained up to
the great depreciation in values in the
spring of 1867. By its charter, the insti-
tuition was authorized to pay interest
upon deposits at the rate of six per cent
per annum. This feature invited large
deposits, but am now satisfied it was an
element Of weakness and contributed
largely to our final overthrow.
This institution, holding large
amount of the peoples money, felt con-
strained to contribute what it could
toward the relief of the community in
the way of judicious discounts, especially
to old friends and dealers, to merchants
builders and others who had enterprises
on hand which could not be abandoned
without serious loss, and who we're en-
titled to accommodations from the bank
by reason of their standing in the COM
muniiy and their previous honorable
and satisfactory dealings as its Gus
toners.
In the month of April, 1867, no little
excitement was caused by the suspension
of one of the banks on Jefferson street.
The community became alarmed for the
safety of their deposits, and many Of the
strongest banks had for some days to
sustain very considerable drafts upon
their resources. This note of warning
was not suffered to pass unheeded by the
officers of the Gayoso, but system of
curtailment was Immediately entered
upon and prosecuted with vigor and
determination. The attempt was made
to call in our loans as fast as they
matured, in order that we might be pre-
pared to meet the calls of depositors,
which we were confident would be made
upon US by the necessities of the times
and the higher rates of interest offered
by good and responsible men for money
accommodations.
We were not disappointed in sup
posing that calls would be made upon us
by depositors, but the drain from this
source was not made good by the calling
in of loans, as we found it utterly impos-
sible to realize upon any considerable
portion of our bills receivable, and con-
slant renewals was the order of the day.
The depletion continued through the
fall months of 1867, and in order to sus-
tain tn Q institution and save the commu-
nifty from loss, we were compelled from
time to time to force upon the market
securities which had been bought at
prices far above what was realized for
them. In this way heavy losses were
sustained upon city scrip, uncurrent
money and other assets, but all to no
purpose; our certificates of deposit
bearing interest and payable on demand
continued to be presented at the counter
and were all promptly paid until the
fatal 9Th of February, when, after ex-
hausting all available means and after
having paid back to our customers
more than four hundred thousand dol
lars, we were compelled to close our
doors for lack of means to satisfy the
legitimate claims upon US.
The institution still holds bills receiv-
able amounting to more than two hun
dred thousand dollars, and loans secured
upon the best real estate in the city, for
over one hundred thousand dollars; be-
sides, its paid up capital is one hundred
and twenty-five thousand dollars-not to
mention large quantities of land In Ar
kansas and Texas, railroad bonds and
stocks, and other assets. s
have been identified with the Institu-
ton from the beginning, and have given
it my undivided and faithful attention.
While it was successful there were others
willing to share with me the honor and
emoluments of success but now that it
has been unfortunate, and its career is
brought to sudden and deplorable end,
all its bad debts are of my contraction,
and l am held responsible for anything
of mismsuagement with which its affairs
have been administered. Yves always
at my post, and il is true had much to do
with the taking of bills, discounting of
| notes, and the general work and business
of the bank. Being subject to the same
frailties as other men, may have com
mitted errors of judgment, but they were
errors of judgment only.