Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1874-07-19
ADJUSTMENT Ol
OF TENNESSEE,

! WIN DF&lCueS SUITABLY lOcabeu III IQe
/ three different divisions of the State.
Ihe first, and, in my opinion, the only
I objection which can be urged against this
measure, is 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 provi-
sion, enacted as war-measure to sus-
tain the credit of the Federal government
while the war was fragrant, will now be
declared unconstitutional, / cannot
doubt. Such a provision under our con-
stitutiOn and government cannot be en-
forced in times Of peace against an in
dividual, certainly not against q State.
TO establish that this would prove a
wise measure of revenue and greatly re-
lieve the people from the burden Of taxa
ton, il is only necessary for you to refer
TO the operations of the old bank. When
the capital stock of that institution was
s. 679 600 it could make an annual net
profit Of $500, 900. Then, too, the Union
and Planters bank, with numerous
other State institutions, were in exist
ence, having a very large circulation
and business, and necessarily limiting
the operations of profits of the State
Oank. The circulation of the State bank
and branches July l, 1861, was only
81, 966, ,I3S.
My plan would be to re-establish the
bank on the same general principles
upon which the old bank was estab-
lished, making its issues receivable for
taxes and all other dues to the State.
To PROCURE NECESSARY BANKING CAP
ITAL,
issue S., ,0Q0, 900 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
State for the prompt payment of both
principal aud interest-I would also ap-
propriate and set apart the profits of the
the bank, first, for the semi-annual pay
ment 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, I believe,
these bonds might be sold for ninety
cents on the dollar, and the sum Of
S4,500, 600 realized for banking purposes.
In making this calculation as to the
probable sale of the bonds, l 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 interest of its bond
ed Indebtedness. Should l be mistaken
in this expectation, I cannot foretell
how valueless Tennessee bonds and Ten
nessee credit will become. Under the
old and safe banking rule ofissuing three
for one, we could, on a banking capital
Of 81, 500, 600, issue circulation of Sl3,-
500, 200. In a field demanding great
banking facilities, and comparatively
unoccupied, we might safely calculate
upon keeping $40, 900, 600 Of this circula-
tion 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 profitably en-
pIoyed.
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, ,3S4, ,072 As, making
over four and one quarter million of dol
lars made by the bank for the use of the
State, beyond its expenses. 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 il is on this day to the
amount of Sl20,000.n "In addition to
the aid thus afforded the treasury it may
not be amiss to state that i'm
portant facilities have been afforded
TO the community by furnishing
over fourteen millions of exchange from
the first of July, 1855, to the first of
July, 1883, and that since the suspep-
sion of specie payments more than a
million of dollars Of exchange has been
furnished the citizens at one per cent.
premium, whilst exchange was selling
at from five to ten per cent. The presi-
dent 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
fom more reliable test as to the future
operations of the bank than at any
former period. This examination, when |
aiken in connection with the report of
he comptroller for the same time, in !
iuced the president and directors to ex.
press the opinion to the general |
issembly in October last: Whilst |
uch a number of banks exist |
md such heavy liabilities of the State |
ire to be met, and such a arrangement /
# the currency, the aid of some bank
ng institution to sustain the credit of
he State seems almost Indispensable.
1t would not seem safe to dis
'ose Of the Bank of Tennessee and leave
he people exposed to the eOntractiOns
nd expansions in the currency by the
Of other banks. &.
The undersigned still entertain the
pinion expressed by the president and
irectoTs in October last, nor can be see
Ow the constantly increasing liabilities
( the State can be hereafter met with
ut the aid Of some such institution DOS
essing equal means and credit. The
rofits OF the last Two and a half years
how that the bank may be safely relied
n to make between three aud four hum
Ired thousand dollars annually. With
ut such aid the credit Of the State could
Tot be safe without enlarging the
uoJeets OF taxation as well as Increasing
he amount, or by
SACRIFICE OF THE VALUABLE STOCK
low owned by the bank, II il not
leemed out Of place here to state that. in
he opinion OF the undersigned, double the
;apital now in the bank and branches
night be usefully employed by each of
hem, with little or no additional ex-
Dense TO the State, and would not only
greatly add TO the profit Of the bank
out secure TO the people OF the State an
circulation in q currency unon
which they could confidently reiy. and
be the means of enabling the hank 10
afford additional relief to the people dn-
ring the pressure in the money market
such 4. manifestation Of Confidence in
the bNsk, after thorough examination
into its condition by Joint Committee
Of the two houses, and such deternoinsS
ton on the part Of the general assemble
10 meet the liabilities OF the State woDId
secure the confidence Of capitalists. en-
nance the value Of the State securities
md promote the best interests of our in
.ernal improvement companies.D Not
an
ARGUMENT
8 here urged by the honored statesman
and financier, then the president of the
lank, in favor of sustaining that instI-
.ution which does not now apply with
5en-fold force in favor Of re-establisbipg
{.
l do not hesitate to say that, with a
circulation OF Sl3, 800, 600, the Bank OF
and its branches would, at
he end OF the first six months from its
place large sum from
is net profits on loans, discounts, ex-
,hange, ETC., TO the credit OF the treas
lry, and that within two years from its
the net profits, after pay
ng the interest on the bonds issued and
,old to obtain the bank capital, wo, Vi
be sufficiently great TO pay from on ;
lalf 20 two-tnirds of the taxes which
would otherwise have 10 be levied 70
meet the obligations OF the State. do
not think Il extravagant 10 predict that
u.ilI.-.. tan naara TIE nntira ANIMAL In.