Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-12-03
BANK OF TENNESSEE.
Important judicial proceedings.

COurt-Fifty Thousand Dollars Uni,
ted States Bonds Enjoined In the
Hands of the Treasurer of the State
Of Tennessee.
Some thirty or forty OF the largest depos
tors of the late Bank of Tennessee, by theil
attorneys, Messrs. Humphreys and Lindsey
presented in open Court, yesterday morn
! ing, their cross-bill, in the case of the state
of Tennessee VS.. the Bank of Tennessee, et
ais. The object of The cross-bill is to en-
force the collection of the claims of the &c
positorS out of the assets of the
Bank, and to hold the State liza
BILE for any deficiency in the same
and particularly to secure a lien in favor Of
the compliments, for the satisfaction of their
claims, amounting to about one hundred
and twenty thousand dollars, on certain
portion of the alleged capital stock of the
Bank of Tennessee, now In the hands Of the
Treasurer and Comptroller of the State and
which, the cross-bill alleges, never was in
the hands Of the Receiver and Trustee OF
the Bank.
Chancellor East granted the injunction
prayed for in the cross bill, and enioined
the Governor, Treasurer and Comptroller,
from disposing Of the funds, directing the
officers to hold them subject to the orders
of the Court.
We publish the bill in full, as part of
the financial history of the State for the past
thirty years, and as exhibiting the claims
of this class of creditors with much clearness
and force to the Legislature and Judiciary
OF the State. We unit the caption and
formal parts Of the cross bill, and give only
its allegations and prayer for relief. 1t will
! Inuhflasc ha l.
| citizens throughout the State. The follow
ing is the BILL
Your complainants further state TO your
honor that the Constitution of the State of
! Tennessee, as amended in 1884, provided
that the fund commonly called the School
| Fund, and all the lands and proceeds there
OF, dividends, stocks and other property of
every description whatever, heretofore an.
propriated by the General Assembly of
the State for the use Of common schools,
and all such as should thereafter be arprO-
| priated, should remain perpetual fund,
| the principal of which should never be d.
minished by legislative appropriations; and
| the interest thereof should be inyioably
appropriated to the support and encourage
| ment of common schools throughout the
| State, and for the equal benefit of all the
| people thereof; and that no law should be
made authorizing said fund, or any part
| thereof, to be devoted to any other use
Than the support or encouragement of COM
| mon schools. The constitution also pro-
vided that the Legislature should
appoint a Board of Commissioners, who
should have the superintendent of the
same, and make report of the condition
OF the same from time to time This pro-
vision Of the constitution, while it Sc
cured the principal from legislative appro-
priatiOn and diversion from the object in
tended, provided in effect that the Legisla-
ture should loan out the fund, or invest il,
so as to make il available for the support of
common schools throughout the State, and
Tor the equal benefit of the whole people.
The Legislature had the power to invest it
In the stock of other banks, in public secu-
rites OF the State or Of the United States,
or TO loan the same on bond and mortgage
TO private individuals, or TO create, as they
believed, bank of the State and invest the
fund in the same. They chose the latter as
mode most available and profitable, and,
in 1888, they chartered bank, i'll the name
and for the benefit of the State, to be known
under the name and style of the Bank of
Tennessee. 1t was provided by the act or
charter that the Governor ofthe State should |
nominate twelve Directors of the Bank one
Of whom should be President, subject to the
ratification Of the General Assembly, who, /
under the name and style of the President |
and Directors of the Bank of Tennessee, !
should have capacity to sue and be sued as
body corporate; and have power
to acquire and hold property of
any description necessary for carrying on /
banking operations; and dispose of the /
same; and that it should have a continued |
corporate existence till the year 1868. The /
act further provides, that the President and (
Directors should continue in office for the |
term of two years from the date of their 4
confirmation, and until their successors |
should be appointed; with fun power to APP /
point such officers as were necessary for the /
management of the business of the corpor- /
alton, under the regulations of the charter. |
The act provided that they should have au-
thority to issue bills, notes and bonds,
signed by the President, and countersgned
by the cashier; that they should have au-
thority TO receive money on deposit, and
pay away the same TO order without charge;
deal in bills of exchange, and buy and sell
stocks, and that the notes and bills of the
bank, payable on demand or order, should
be receivable at the Treasury of the State,
by all the collectors, and all other public Of
hcers, on all payments for taxes aud other
moneys due the State.
The act provided that the capital stock of
the bank should be five millions of dollars,
to be constitutes and raised as follows, to-
wit the Whole Of the common school fund,
whether the same was invested in stock in
the existing banks of the State, or in the
hands of the Superintendent of Public In
or In the hands of county agents,
or other persons, except so much as may
have been invested in internal improve
mentS: as well as the proceeds of the
Ocoee lands should constitute a part of
the capital stock of the Bank Of Tennessee.
1t was declared that the surplus revenue on
deposit with the State, together with the
interest thereon, should also
part of the capital stock OF said
bank; and that, in addition to these !
a sum i'll specie should be raised,
on the faith of the State, sufficient to make
Ibis whole fund five million of dollars. The
act also provided, that if the fourth install
nent of the surplus revenue, appOrtioned
under the act of Congress approved June %, I
1926, should be deposited with the State, /
hat amount should be added to, and {
a part of, the capital stock '
IF the bank; and be in addition {
o the capital stock of five millions. This
lct further provided that the faith and credit Z
If the State were pledged for the support of {
he Bank, and to supply any deficiency in {
he funds specifically pledged, and to give
indemnity from all losses arising from said
deficiency.
The Legislature having thus priced the l
,apital stock at five million of dollars, and I
pound the State Government to those who Z
should become the creditors of the institu- {
ion to supply any deficiency in the five {
Millions, and to indemnify such creditors |
rom all losses arising from said Deficiencies, a
proceeded to establish and declare the prac-
al mode of putting said President and Di-
ectOrs of the Bank in possession of the a
aid five million of dollars. In pursuance
II this object, the Legislature declared that S
he common school funds in the hands of '
he Superintendent, or which should after t
wards come to his hands, should be handed 5
,yer to the President and Directors of said t
Bank, as capital in said Bank. And the I
President and Directors were authorized and a
equired, for and on behalf of the State, ?
md with the pledge of the public faith and +
,redit, to issue to the Superintendent State 5
took, or certificates of indebtedness, for t
uch sums OF money as should he paid over a
o the President and Directors by the Su- a
that the Governor, Comp a