Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1869-08-25
WHAT SHALL BE DONE WITH THE
RANK OF TENNESSEE ~

issued by the Bank Of Tennessee by an
act of the Legislature, because it was
Rebel legislature To repudia.e debt
made by . Legislature that an over.
whelming majority of our people had no
voice in electing-made by few white
men and all the negroes-involves de-
gree Of tuTpitude that these loyal repudi-
ators Of bank notes issued by the Bank
Of Tennessee cannot comprehend. They
know what they did with the money;
but that does not relieve the taxpayers
Every man must confess with
shame that the course of the Radical
party in regard to the Bank Of Ten
nessee is a disgrace to the State.
The injury inflicted upon the credit
Of Tennessee by the practical repu-
diation Of the notes of the Bank of
Tennessee, is one among the first
things which the Legislature re-
Gently elected should repair. As
to the States liability to the holders
of the notes of the Bank of Tennes-
see, there can be no question among
citizens who respect law and good
faith. The Bank of Tennessee was
established by the act of the Legis.
lature of Jan. 10, 1888, the first act
ion of which reads as follows:
Section l. Be it enacted by the Gene
raj Assembly of the State Of Tennessee,
That a bank shall be and is hereby
established, in the name and for the
benefit oft State, to be known under
the name and style of "The Bank Of
Tennessee" and the faith and credit
of the State are hereby pledged for the
support of che said bank, and to supply
any deficiency in the funds hereinafter
specifically pledged, and to give indemni-
~ for all losses arising from such de-
ticiency.
This is as explicit as language
can make it. The bank was estab-
lished Gin the name and for the
benefit of the State" land the faith
and credit of the State are hereby
pledged for the support of the said
bank" The benefits and profits
arising from the operations Of the
bank were to and did accrue to the
State, and of course the liabilities Of
the bank attach to the State. By
the second section of the act, it is
provided chat the capital stock of
said bank shall be five millions Of
dollars" But the liability Of the
State is not limited to even that
amount. The State is obliged to
make good any losses arising from
a deficiency in the funds pledged to
the capital of the bank by the word
ing of the section we have quoted.
But the charter is clearer even on
this point. The fifth and sixth ar
ticles of the ninth section provide
as follows:
Art. 5. The total amount of debts
which said corporation shall at any time
owe, whether by bond, bill, note or
contract shall not exceed twice the
amount of the capital stock paid in at
the time over and above the moneys on
actual deposit for safe keeping. Nor
shall the entire amount Of the risk or
investment or securities in what form
soever (save and except actual current
coin) at any time exceed twice the
amount of the capital stock paid in.
Art. 6. In case Of excess the direc-
tors under whose administration it shall
happen, shall be liable for the same
in their private capacities, and an &C
ton of debt may in such case be
brought against them or any of them
or their heirs, executors or admins"
traitors, in any court of this State, hav~
ing jurisdiction, by any creditor or creN
ditors of the said corporation, and
may be prosecuted to judgment and
execution; any condition, covenant
and agreement, to the contrary nOtS
withstanding. But this shall not be
so construed TO exempt said banks, or
the lands, tenements, goods or chattels
of the same, and on their insuthciency,
the State of Tennessee being also liable
for, and being chargeable with the said
excess.
Here we see that the State deter
mined that the holders of the notes
of the Bank of Tennessee, should
not suffer through the mismanage-
ment of any of the agents of that
institution, who were virtually the
agents of the State, by making her
self liable to them for any excess of
liabilities to the extent of over dou-
bic the capital stock, incurred by
the directors of the bank. 1t strikes
us that words could not more ex-
plicitly define the responsibility OF
the State in this matter. She is
bound beyond all question to re"
deem every dollar Of the Outstand-
ing issues of the Bank of Hennes-
see. The intention of those who
framed and enacted the charter Of
the bank, was that the holders of its
notes should lose nothing through
the States responsibility, and that
intention was made to assume the
shape of law. The twelfth section
of the charter of the bank provides
"that the bills or notes of the said
corporation shall be receivable at
the treasury of this State, and by
all tax-collectors and other public
officers, in payment for taxes or
other monies due to the State"
The first Legislature under the re-
organized State government, by the
act of June 10, 1868, repealed this