The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1874-07-24
CoMPTRoLLER's OFFICE
Nashville July Is 1874.

| GENTLEMEN-ln compliance with
YOUR request, submit, in writing, the
substance, in brief, OF my conversation
with YOU, when in Memphis. relative to
1.-The re. establishment OF the state bank !:
! | said that IL was my purpose to re-
lcommend TO the next legislature. as a
measure of revenue the re-establisment
Of the Bank of Tennessee. with branch
es suitably located in the three different
divisions of the State. The first, and,
in my opinion, the only objection which
can be urged against this measure
lis the provision in the act of Congress
which imposes a penalty of ten per
| cent. on the circulation of all other than
national banks. That This provision,
enacted a war-measure TO sustain the
credit or the Federal government while
: -. vas Migrant, will nov be declared
unconstitutional, | cannot doubt
Such provision under our oonstitu-
ton ant government cannot be enforc-
ed in time of peace against an indiyidu-
al, certainly not against State.
To establish that this would prove q
wise measure OF revenue and greatly
relieve the people from the burden Of
taxation it is only necessary for YOU TO
refer to the operations of the old bank
When the capital stock Of that institu-
ton was S3,679.0O0 it could make an
annual net profit Of S5O0O00. Then,
too. the Uion and Planter banks, with
numerous other State institutions, were
IN existence, having a very large crcu-
lalion and business, and necessarily
hn of IF A
State bank. The circulation of the
State bank and branches July |, 1861,
was only Sl,966,l3S.
NV plan would be to re.establish the
bank on the same general principles
npon which the old bank was establish
ed, making its issues receivable for tax.
cs and all other dues to the State.
To procure necessary banking capital,
issue So 100000 Of six per cent. forty
year bonds. TO secure prompt sale
and high price for these bonds. | would
not only pledge the faith. honor and
credit of the Stale FOR prompt payment
Of both principal and Interest," would
also appropriate and set apart the profits
Of the bank, first, for the semi-annual
payment Of the interest on the bonds,
and after the lapse Of suitable time |
would, from same source, provide an
annual sinking fund for the payment of
the principal Of the bonds. Thus, |
believe, these bonds might be sold for
ninety cents on the dollar, and the sum
Of $4500000 realized for banking pur-
poses.
In making this calculation as to the
probable sale of the bonds, | take 1t for
granted that our next Legislature will
not violate the faith and credit of the
State, now Pledged for the payment of
the principal and interest Of its bonded
indebtedness. Should | be mistaken
in this expectation, ! cannot foretell
how valueless Tennessee bonds and
Tennessee credit will become. Under
the old and safe banking rule of issuing
three for one. we could on banking
capital Of S4500000, issue circulation
of Sl3500,000 In field demanding
great banking facilities, and compare
lively unoccupied. we nigh safely cal
cuate upon Keeping S1000G0O0 OF this
circulation in active employment.
think it probable that at the reasonable
rate OF six per cent. interest, and It
should not be higher, every dollar Of
the circulation could be constantly and
probably employed.
do not hesitate to say that, with n
circulation Of Sl3500,000 tie Bank of
Tennessee and its branches would at
the end Of the first six mouths from
its establishment, place large sum
from its net profits on loans, discounts,
exchange etc, TO the credit Of the trea-
sury, and that within two years from
its establishment the net profits. after
paving the interest on the bonds issued
aud sold 20 obtain the bauk capital,
would be sufficiently great TO pay from
one-half to two.thirds OF the taxes WEIGH
would otherwise have to be levied TO
meet the obligations Of the State. |
do moi Think il eXtravagant to predict
that within ten years the entire annual
| indebtedness of the State would be paid
from the net profits Of the bank.
| In the foregoing, | have said nothing
Of the great advantages which the peo-
pie Of the State, which its mining, manu-
featuring agricultural, indeed all indus.
trial interests would derive from the re-
establishment of the bank and its
branches. have said nothing OF the
great political advantages that would
accrue in building up in every State
powerful antagonist to the present ma
tional bank monopoly, which will Ill
timalely prove the greatest power in
support of central despotism, rs the
State bank system would prove n pow
erIul opponent TO Capitalization and q
powerful influence in favor of the con-
s.itutional doctrine of self government,
To discuss these points would require
more time than can spare TO day. |
suggest them for your consideration,
with the simple remark, that in his con-
test with the old United States bank,
General Jackson found potent allies in
the banks organized under State au.
thority. Respectfully,
JNo. G. BURcH, Comptroller.