Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1872-04-18
TENNESSEE NATIONAL BANK.
Ex-Comptroller Hulburd's Connection
with It-AnsWer to Rutter's Letter.
Reasons Why the Bank was ClOsed-The
Law FulfIled-NO Carriage in the

Secretary of the Treasury, ana not 10 tnt
committee, and Is made on oath before
J. Franklin Bates, Justice of the Peace
at Washington:
In the year 1866, early in the month
of August, George r. RutteT, President
Of the Tennessee National Bank ol
Memphis, --.---r
PAID FOR A oNE-HoRsE CARRIAGE
for which I was negotiating in this city
His doing this. was unexpected by me
and / think unpremeditated by him. II
was very soon after the resignation Of
Freeman Clark, and while the duties o.
I the Office devOlYed on me as Deputy anO
Acting Comptroller. 1 attached no es-
pecial significance to the transaction al
] the time, and only subsequent events
/ gave il any importance whatever. III
the latter part Of August in the same
wear, not very long after the transaction
/ lust stated, / was informed that the af
| fairs of the Tennessee National Banh
of Memphis were not in q good condi
| ton, and sent an examiner to investi
gate the facts. His investigation wa'
made ON the twenty-fourth, twenty-fiftf
and twenty-sixth of the month
! and his report was received at tbs
/ department on the third of Septembel
/ following. A copy Is hereto appended
marked ga y This statement exhibits
| a failure on the part of the bank to com
ply with several important provisions o
! law and --. r=-T--E
A NUMEROUS IRREGUEARITTEs OF MAN
AGEMENT
which required correction. 1t seems tC
A be assumed that ! suppressed this re-
port, and that refused to appoint a re
eeiver TO wind up the affairs of the
bank, and that this failure TO perform
my duty was in consideration of the
present I had received from the Presi.
1 dent of the bank. The charge is -thi,
or il is nothing. Tothis charge l reply
I that e- -a
ibid NOT SUPPRESS THE REPORT,
as the records of my office will show
I and as more fully will appear hereafter
As TO the appointment of a receiver
I a reference to the law is necessary il
order to determine upon what grounds {
receiver may be legally appointed. Sec
ton fifty of the National Currency Ae
| provides for the appointment of a re
ceiver to wind up the affairs of banl
for a failure to redeem its circulating
notes. The language of the law on thi
subject is as follows:
On becoming satisfied, as specified in thi
| circulating notes as therein mentioned, and i
in default, the Comptroller OF the Currenc!
may forthwith appoint a receiver, etc.
This is the only ground specified il
the National Banking law upon whicl
a receiver may be appointed forthwith
There is no allegation in the EXamin
ner's report that the bank had failed, o
refused TO pay its circulating notes. II
fact, the entire circulation of the banl
at that time was only ninety Thousand
dollars, while the Examiner states tn
lawful money in the bank to be ninety
three thousand five hundred and TWEEN
ty-seven dollars, a sum sufficient to
REDEEM EVERY DOLLAR OUTSTANDING
The appointment of a receiver on thi
ground was therefore impossible, anC
the charge of a failure of duty in this re
spect could be made and entertained
only by one essentially ignorant of tn,
provisions of law on the subject.
The lawful money reserve OF the banl
was shown to be deficient in the sum o
twenty-one thousand two hundred ant
eighty-two dollars. The law on the sub
ljeet of reserve is as follows (last clause
lSecJl0n thlrty-oneI:--
And it shall be competent for the ComptrO
Ter of the Currency 20 notify any association
whose lawful money reserve as aforesaid sha
be below the amount 10 be kept ON hand, q
Aforesaid 10 make good such reserve; and
such association shall fan for thirty day
Thereafter 50 to make good its reserve OF lawfJ
money Of the United states, the Comptrolle
may, with the concurrence of the Secretar
/ OF the Treasury, appoint a receiver 10 win
upthe business of such association, as PROV
ded in this aet.
The Examiner states that the capt.,
of the bank has never been fully paid il
a large amount of II being represente
/ by stock notes"
The law upon the subject Of the pay
ment of capital is detailed ia section III
teen of the National Banking act.
IL will be observed that while this sex
ton makes it the duty of the bank I
take certain measures 20 secure the fu
= payment Of lbs capital stock, il impose
no penalty for a. Failure to do so, an
gives the Comptroller no power TO con
pel the bank 10 the action contemplated
only IT, in pursuance of these provisions
the capital stock shall be reduced belO'
4 the minimum required by law, and
III THE BANK FAILS TO INCREASE IT
5 to the requirements of the act with
= thirty days, a receiver may be aPpoin
ed. All the Comptroller could do the
, in such case as the one presented by q
e TenDessee National Bank would be
:. call upon the managers of the bank
comply with the pTOVisiOns of the Law
. And 80 with all the other irregalariti,
complained of. 1t was the Comptroller
= DUTY to notify the bank of its shOr
p conings, and insist upon q faithfl
y compliance with all the requirements
IS the act. .-.--..
To show how this was performed, an
e to furnish conclusive evidence that Il
report was not suppressed, the fohowin
= copy of the letter,
, ADDRESSED TO THE BANK,
a after a careful examination of the fac
e presented by the xaminer-taken fro
o the records of this effiee-7is presented ;
V TREASURY DEPARTMENT
" . OFFICE OF COAPrROlIsER OF CU RftENCY,
I'll WAsHINGTOS, Septemberl5 10, 1866
SIR-In ths report OF the Examiner of n
4 tionaI Banks upon the condition of the TIE
4 nessee National Bank Of Memphis, aS toul
e By him IN his e1anqi nation made on q
, twenty fourth ultimo, the following irregnla
y ities appear, according 20 the showing OF q
y books q s tlss , eo1ty thousand seven uiidr
!. dollar 81 fhe capital stock has been paid /
l. while the law reap Tres fifty thousand dollars
Ie have been paid in on the oath OF May, 1853.
,Fi Second-ihe remainder Qf the capital sto'
7, of ne bapk consists of notes given by stOc
~ holders fof the payment of their stock
IS does NOT appear that tfhese notes are being
70 si,s Ar dfterig % With the spirit Of {
h. eTbird-The reserve fnnd Is aatlclept by oN
"a twenty thousand dollars.
- : FonHth-The loan 70 the National Bank
n tha Netropolis in This city, seems TO be !
of called Tor by the bnsiiRss Of your bank, al
I'D uhler e5;s,3rg circumstances Is especially
Tx Fifth@The amount Of over 9r4fts q eype
II i've 10 an unprecedented degree, beiug IA
ie thirty Ger cent. cf the nominal capital
IN over seventy-t~f. per cent OF the paid
III capital Of the bank.
tOl Sixth4Cash items are .eShil3itea - hitS G
IN th6Iis,sl three hundted and ~ On Tour q
~, lars, not mofs tliaa 0se-h4n 81 which app.
ne 10 be entitled 10 be legltiinsiels 70 Consider
Iat seVenth-The records OF the bank are "
:. tmDerfect and far from being in aecnrdaI
y xitb The instructions laid down on pages II
.ly suesssti5ns u oss oel, ,ptrolier Of the Curr
- Ssfiah e FeEofds ID MOI dshow that
slI have any alIestess e III Fe siae s9 81 IN
= by b the books of me bank 70 possess the REQ
sita amount of stock. lrril 80 Glh
FEi8ihrlSa portion of The earnings OF
esaks s5ad ~ TS. prevloas IS 10 fsakies iyidene
pls hSeiI ih ssction twenty -iIfed " Tis
aod lad as the showing Is, the bank upon
ss1,ss,,iif7sfioa aDpears to be In even worse cor
Oh go than rs foWE bpoks indicate. Tber
further on die, m thls tss s5ieas tne : =. .
site SSrorn 10 by four diTeetorst setIlnR 20
tbst cn tll6 s8eAty fSarth ef May, looe,
hundred thoqsspa a9lefs o. the caRitsl 81. 81
ay 49, s9l, como ftfon OF the DanEI tqaqe IHHrff
"a. YaiV' ls16. the cashier syears that Mere Is
he F'irst~capital stock paid IN, ten thoas' ss
ne dolssts, sisc,,d suarsius fisad. dHe thonSahd
of hundred and eleven dollars,
yas Thsse affidayits OF the airee iols end q
- cashier eeeIn 10 be Whoily atNaiiahce v
5as II a not the desire Of this once 70
ear harshly or spmmarilY yltR. All4 Il htle Az
~ Banking AssooiatlDn 4,at Al5 eeen" ~ ~
of renders il impeFafty ; 81 tlle tD1P ptzeileT
cir sfsts lpon Immediate reform In the analI
tbs henF n, tt,e mi lowing uaTla ou taEs-- 70