Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1874-08-01
REVIVAL OF THE STATE BANK.
Important Suggestions from Compt-
roller John C. Bureh-A State
Bank with $4,000, 900
How the Suggestion May be Carried
Out---What Such a Bank Would
Do for, and Save to,
the People.
coMprRoLIER,s orrIoE. !

DO Tor, ana Save to,
the People.
| CoMPTRoLLER's OFFICE, l
NAsHvILLR, TENN, July Is, 1874.
Messrs. M. C. Galloway and Marcus j
Wright:
GENTLEMEN-In compliance with
your request, | submit, in writing, the
substance, in brief, of my conversation
with you, when in Memphis, relative
to the re-establishment of the State
bank:
l said that it was my purpose to re-
commend to the next legislature, as a
measure of revenue,
THE RE-EsTABLIsHMENT OF THE
BANK OF TENNESSEE,
with branches 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, is the provision in the
act of congress which imposes pen
atty of ten per cent. on the circulation
of all other than national banks.
That this provision, enacted as a war
measure to sustain the credit of the
Federal government while the War was
fragrant, will now be declared uncon-
stitutiOnal, L cannot doubt. Such a
provision under our constitution and
government cannot be enforced in
time of peace against an individual,
certainly not against a State.
To establish that this would prove a
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 insti-
tuition was 1868, 900 it could make an
annual net profit of $500,000. Then,
too, the Union and Planters bank.
with numerous other State constitutions,
were in existence, having a very large
circulation and business, and necess-
arily limiting the operations and profits
of the State bank The circulation of
the State bank and branches July l,
1861, was only 81 ,966, ,13S.
My plan would be to re-establish
the bank on the same general princi-
pies upon which the old bank was es-
tablished, making its issues receivable
for taxes and all other dues to the
State.
TO PROCURE NECESSARY BANKING
CAPITAL,
issue s., 900, 900 of six per cent. forty
year bonds. To secure a prompt sale
and high price for these bonds, | would
not only pledge the faith, honor and
credit of the State for the prompt pay
ment 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 a
suitable time [ would, from the 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 S4,500,O00 real
lied for banking purposes.
In making this calculation as to the
probable sale of the bonds, / take it
for granted that our next legislature
will not violate the faith, honor and
credit of the State, now pledged for
the payment of the principal and in
terest of its bonded Indebtedness.
Should | be mistaken in this expecta-
ton, | 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 a banking capital of
81, 800, 600, issue circulation of $13,-
100000. In field demanding great
banking facilities, and comparatively
unoccupied, we might safely calculate
upon keeping SIC, ,0O0,00 of this circu-
lation in active employment. i 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 pro6tably en-
ployed.
I quote the following from a report
of Hon. Cave johnson, then president
of the bank, under date of February
%, 1858:
From the first of July, 1853, to the
first of January 1858, the profits of
the bank amounted to 81 ,384, ,072 40,
making over four and one quarter
million of dollars made by the bank
for the use of the State, beyond its ex-
penses. The bank has instructed its
correspondent in New York to pay the
interest on any bonds of the State as
presented, and keeps funds on hand
for that purpose, and pays the check
Of the treasurer without regard to the
amount of his deposits, leaving the
treasury often in arrears with the bank,
as it is on this day to the amount of
S12O,OOO In addition to the aid
thus offorded the treasury it may not
be amiss to state that important facili-
ties have been afforded to the COM
munity by furnishing over fourteen
millions of exchange from the first of
July, 1855, to the first of July, 1859,
and that since the suspension of specie
payments more than a million of dol
lars of exchange has been furnished
the citizens at one per cent. premium.
whilst exchange was selling at from
five to ten per cent. The president
and directors did not think it just or
proper to take advantage of the sus-
pension
TO EXTORT EXTRAORDINARY PRICES
FROM THE PEOPLE.
1.-The examination of the profits of
the bank for the last four years will
form a more reliable test as to the
future operation of the bank than at
any former period. This examination,
when taken in connection with the
report of the comptroller for the same
time, induced the president and direc-
tors to express the opinion to the gen.
eral assembly in October last: Whilst
such number of banks exist and
such heavy liabilities of the State are
to be met, and such arrangement of
the currency, the aid of some banking
institution to sustain the credit Of the
State seems almost indispensable.
Il 1t would not seem safe to