Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1871-12-07
SIS 100000 WANTED.
A Little Bill In chsEcsry which Concerns
the Creditors Of the Stats-A DOss
for Wall Street.
Chancellor East, Of Nashville, In the Inter
est Of the Late nspOsItOrs Of the
Bank Of TenRessee, eRlUIHs
the State Treasurer.
The Pound Of Flesh Demandsd-The LA
bIIitY of the State for Five kIIIIOns
Eers Insisted Upoa.

hgiN AactoNee ~Fs@a
The Nashville Banner, Of Monday, ssyl
that Messrs. Humphreys n Lindsey, In
behalf of many large dspositors with the
Bank of Tennessee, filed a croSs-biH in the
case Of the stats OF Tennessee Us. the
State bank and its creditors, in the chan
Gerry court yesterday, setting forth the
ground OF their claims to satisfaction out
OF certain securities now in the hands OF
the State officers, as part Of b capital
stock of the bank, snd praying an injanc-
ton commanding them TO hold the said
securities until these rights are sdjudi-
csted.
THE CHANCELLOR GRANTED I'll INJUNc-
TON.
As this bill involves the rights of a large
class OF creditors OF the Bank Of Tennes-
sec, scattered throughout Tennessee, who
are seeking an adjustment Of their rights
through the judicial tribunals of the
State, we give 8 brief summary Of the
points mace In the Dill:
1t charges tina the school fund was de-
clared q perpetual fund by the constitu-
4ion; tina no set OF legislation should d.
vert this fund from the purpose intended
by the constitution; that b legislature
had the power, and it was its duty, to
make the money profitable, az that body
had the right 70 invest in public securities,
STATE Oh NATIONAL,
Loan IL to individuals on bond or mort
gage. or invest il in stock OF State banks,
or create = bank, and make il the basis Of
banking operations; thst the State Of
Tennessee chose the latter alternative,
and created the State Bank in 1888, with q
corporate existence for thirty years; that
the State appointed the directors, had the
disposition of the capital stock by lsW,
and the right to appropriate the proceeds
TO the purpose intended; that the State
gave the directors power to issue notes
receive deposits, and exercise ali the usual
functions OF banks; that its notes should
be receivable by sl public collectors; thEt
the capital Sock should consist of the
whole Of the school fund, the surplus rev.
snUes deposited by
TIE UNITED STATES GOVERNMENT WITH
THE STATE,
and the proceeds of the sale of the bonds
of the State to the amount of two mill
lions and Q half that the funds when
united should make up the sum of five
millions of dollars; that the State should
indemnify creditors of the institution
against any losses that might arise from
the Stste falling to supply said capital
stock OF five millions; that in the execu-
tioR Of thsss provisions the school fund
should be paid Ter TO the president and
directors OF the bank, who should give q
certificate of Indebtedness In the name of
the State 10 the superintendent of public
instruction.; thst the surplus revenue
should be paid over to the president and
directors OF the bank, who should give q
certificate Of
INDEBTEDNESS TO THE COMPTROLLER
for the benefit of the State; that the gov
ernor should hand over bonds of the State
to the smOEuJ Of WI and 6 half millions, |
= - L.-n- It, I
specie funds Is q part OF b capital stock; |
that the whole OF the capital stock of said
bank, tO-wit: the common school fund, |
the revenue and fund raised by the sale |
Of State bonds, should be pledged by the |
State for the several sums Of mOne de-
posted from time to time; that the de-
positors did make their deposits in said
bank on the faith of the funds specifically |
pledged.
1t Is charged hat the legislature Of the
State did undertake and agree, by the
terms of the bank charter, to make up
auv deficiency in the school fund in the /
revenue, or tbs proceeds of the
State honda, and to indemnify the deposi-
tors for all losses arising from any
DEFICIENCY IN THE BONDS,
and that the complsinsnts did deposit /
money in the bank under the said
engagements made with the State of Ten /
n6S8eS, Llhb II WOuAu INDEMNIFY bO6m Il
from any loss by reason Of any loss by |
Of any deficiency in h sum
pledged. Complsinsnts also charged that
the State did not place in the hands Of the
president and directors Of the five mill
ions, but that a isrge deficiency existed at
ali times during the whole period OF the
corporate existence OF the bank. And
that the State did withdraw from the bank
considerable portions Of the bank; thus
Withdrawing the money specifically
pledged for the payment Of the claims Of
depOsitors and other creditors. upon the
assumption that said sums Of
money we're a part Of the
COMMON SCHOOL FUND,
Of being identified and seized a.
such school fund, when in truth no such
Identification of funds could be made, but
that the whole Of the school fund surplus,
revenue and proceeds Of the sale Of the
State bonds wers placed in the bank as a
consolidated fund, pledged for the satis-
faction Of any debt the bank might law
fully create.
The bill further charges that the legisla-
sure. bY set, directed that the court should
20 into liquidation; that an assignment
should be made to q trustee, with instrue
lions TO pay one million five hundred
Thousand dollars to coitain officers as
school funds, and the balance to the cred
tors, thus setting aside the charter Of the
the basis Of the contract on which
compisinsnts deposited their funds In the
ssid bank, n establishing an arbitrary
rule Of distribution as to the assets Of the
bank, in total subversion OF contract with
compliments and OF the supreme law Of
the land.
THIS ASSIGNMENT
-as made and the bill flied by the trustee
n che name Of the State TO execute the
rust, The State, in conformity with the
,bsrtsr, hes taken up a large RmOun of
he notes OF ths bank, sad claims that the
state should b. substituted to the rights
the ~note-holde-s against the effects Of
he bank, and that the trustee should 50
.ct in the distribution Of the funds of the
bank; but complsinsnts insist that the
|. 'Nte having the legal right tothe
NE CAPITAL STOCK OF THE FAX,
"a bs ling appropriated during the en-
ne perio q OF It's existence all tbs profits
= ~ bs,. by the IOaning Of the deposit
49, fnn5s I'd Otherwise, lin the follow
manneT Nwit: one hundred thou
doIIsrs am tally to comnon schools,
5gbtean tbo1ssnd dollars to academies,
M IL haIsnca ~ .'be proe,s TO the ex-
OF theip tsrest on the States
ondsl. he a principal TO the extent OF the
bIizstions OF its charter, So-Wit;
FIVE MILLIONS OF LoLLARs,
is entitled to no rights 10 an dlstrlp,
share 20 any effects until snail
ave discharged the debts OF its ~eorloIate
gent TO az amount sufficient to rep ace
be amount illegally Withdrawn, and 20
upply ths deficiency in the sum OF nYe
sniions pledged fOrthe payment otdebta.
The bill prays for the deed of trust 70
% set aside; That the effects OF the bank
y distributed according TO the charter;
hat the alleged school fund be declared 8
,srt Of tne capital stock Of said bank, and
ubiected 70 the Subtraction of complain
Ints' debts, and that The
LIABILITY CT THE STATE
@ shs extent OF Eve millions be declared.
The above is q brief summary Of the al
Iegsfions of the bill, and viii interest a
srgs number of our readers. Under the
Injunction granted by the chancellor the
OF the state Of Tennessee and
he other State officers are enioIned from
iisposing of hfty thousand dollars IN
United States bonds, and directed TO hold