Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-05-18
BANK OF TENNESSEE
NOTES.

Remarks of Maj. John c. TsOmPsOl
| Maj. John c. Thompson, of this city
yesterday addressed the Joint Finance
Committee Of the Legislature ia favor OF
an act authorizing the appointment o.
suitable commissioners, whose duty il
should be to destroy by burning, the ole
issue of the Bank of Tennessee as fast as
it was paid into the Treasury. Maj.
Thompson, after appropriate preliminary
remarks, submitted his reasons for burn
ing in preference to reissuance of the
oldissue, in the form of a series of propo-
sitions which were substantially as fol-
lows:
l. The present practice Of paying out
or receiving Cor of attempting to pay out
| or receiYe) those notes by the fiscal Off
GERS of the State necessarily has the effect
to keep down their value below the value
OF treasury warrants, because issued thus
In lieu of treasury warrants they reflect
the present conditions of the treasury
without, at the same time, expressing
the real or the Fictitious hOpefulness of
its future condition as treasury warrants
do. In this it is manifest that the injury
to the warrants and TO the notes is recip-
rocal, for the condition of the treasury
already bad enough, is rendered still
worse by this constant exposure
warrants having no quotable value as have
the uncurrent bank notes.
2. The potentiality of paying taxes
and other debts due to the State may be
said to be capital, which alone gives value
to the old issue of the Bank of Tenues-
see. Necessarily then the most signal eff
feet on the foreign credit of the State
would follow rapid and persistent adj
vance in the value of those notes.
3. Their one element of value being the
Potentially of paying debts due the State,
it follows that so fast as they are absorbed
and extinguished, viii the decreasing out
standing balance ratably approach to par
This admits of demonstration; for, of
course, when the last payment comes to
be made, they viii have an equal value
with national bank currency, for the rya-
son that the exact same amount of legal
tender notes would be required to pay the
debt then about to be paid with the rem
nant of outstanding issue of the Bank of |
Tennessee.
4. Apart from the benefit to the States |
foreign credit, it is absolutely true and
capable of demonstration that every adj |
vance in the market value of those notes
is as much addition to the taxable wealth |
of the State. For example, if there are
outstanding notes for one million dollars, |
having at present market value of seven |
hundred thousand dollars only, let their |
value be raised to par and the holders in |
the aggregate have gained three hundred
thousand dollars. And this without loss
but, on the contrary, decided
gain to the State in her financial credit.
B. Lastly, and as corollary to the |
foregoing, it may be added that while |
there would be this accretion in the private
wealth of the people, no loss therefrom
could possibly accrue to the State, for the |
reason that the State is compelled to re- |
ceive the old issue at par without regard |
to its quotable value. On the other hand, |
the pernicious policy of reissuing those
uncurrent notes in lieu of Treasury war
rants, can have no effect but to drag
down the market value of Treasury war
rants to the QuOtable value of those uncur- |
rent notes. Treasury warrants are pay
able with the first money IN the Treasury |
not otherwise appropriated, so that, for
the State to offer as an equivalent there
for, this issue which is confessedly never
to be paid In money at all, is confession |
of weakness that can result in unmitigatcd |
evil only.
These views which, it is hoped and be
lieyed, are in harmony with your own,
arc respectfully submitted to the Consid-
Grafton of your honorable committee