Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1874-12-04
An OVerhauling that Reveals Some
Queer Financial Operations
Suggestive Figures and
Facts
Where the Peoples aoaey Has Gene
TO-HoW the Funds Of the Bank
Have Been Swallowed Up
ia Settlement.
A mother Rich Treasure OF Experience
for the People Of Tennessee Fur
ther Investigation IA Trans
Ferred 70 a ChaReery
CaHrt.

The Nashville papers OF Wednesday
publish the following report of the joint
investigating committee appointed by
the last Legislature TO inquire into the
management OF the affairs OF the State
bank, in process OF liquidation under
Trustee Watson. 1t is document wOr-
thy the times; smother straw TO help
break the taxpayers back and enforce
the conviction that economy and re-
! trenchment are absolutely essential to
the life and growth Of the State:
! PULASKI, TENN, NOvember26, 1874
/ Governor John c. Brown, Nashville. Tennes-
see
Enclosed please find report on the
{ bank Of Tennessee, which 3 majority of
] the committee direct me to file at once,
/ and without amendment or alteration.
| 1t is now public, and you may let the
papers have as much Of it as they want,
should they be naughty enough to want
any of il. Please transfer il to the gen
eral assembly with q message. Yours,
ETC., n. sDTTTHsON.
In making the report the committee
| include the joint resolution adopted by
| the thirty-eighth general assembly, au-
| thOriZing them to "make settlement
with the trustees Of the bank Of Tennes-
see,r and "to fully investigate the cause
/ of the delay and the litigation mem
| toned, and to fully ascertain the man
| ner in which the trustee has discharged
| the trust committed TO him, and report
| the same to the next session Of the gen.
| eral assembly for the consideration Of
I the sameu The resolution also gives
| the committee power to send for persons
| and papers, and shall have power to adj
minister oaths to aid them in their in
vestigatiOns. They then start out with
| the
HISTORY OF TIE BANK OF TENNESSEE.
The Bank of Tennessee was chartered
/ by act of the general assembly OF Ten
nessee passed January Is, 1888. The act
of incorporation, among other things,
/ provided that said bank should be es-
| tablished, in the name and for the bene-
| fit Of the State; and that the faith and
credit of the State were pledged for the
support of said bank, and to supply any
deficiency in the funds hereinafter spe-
elf ally pledged, and to give indemnify
for all losses arising from such deticien-
cy. IL further provided (sectiOn 2 that
the capital stock of said bank should be
IS. 900 600, to be raised and constituted
as follows: the whole OF the common
school fund and the proceeds of the |
Ocoe lands, and the surplus revenue |
then in the State treasury, were to con- |
stitute a part of its capital; and in addi- |
ton thereto the State was to raise a SUI |
ficieIrt sum Of specie to make the capital |
IS, OO0, 600. 1t further provided (sectiOn |
81 that the governor should appoint /
twelve directors of said bank, sub |
iect to confirmation or rejection |
by the general assembly lone of
whom should be presidentl TO continue in
Office two years, or until their succ essOrs |
were nominated and confirmed. Said |
act further provided section S that
Sis 900 of the dividends of said bank
should be appropriated to the benefit of
schools and academies, and the remain
der Of its dividends applied to the pay
uent of interest on the State bonds AS
sinking fund. 1t was provided section
~ that the notes OF said bank should be
"a receivable at the treasury OF the State,
and by ali tax-collectOrs ami other pub
lie officers in all payments for taxes or
other moneys due the State" An act
Of the general assembly Of Tennessee, |
supplementary to the above act, passed |
January %, 1888, provided, among other |
things, that the president and directors
OF the bank Of Tennessee should appoint 1
twelve directors for esch of the branches /
Of said bank, and that the capital of said /
bank should be divided among the bank /
and branches in q manner therein speci-
fed; and that the dividends of the /
branches should be paid into the principal /
nTsF of
general assembly, passed -, 1888, |
entitled "An act to provide for the re- /
duction Of the State debt, y, the capital |
Of said bank was reduced to -, 500, 900, |
and so remained so far as the law was
concerned; but according TO the books
of the bank the actual capital of the
bank never reached 50, 500, 900, though .
il was st times nOmiDally more than
this. Reports of the president Of the
bank OF Tennessee show that it did a
very prosperous business previous TO the
late war. From 1899 to 1888 its profits
upon its capital stock were over eight
per cent. per annum. The assets Of the
bank on the first day OF January, 1861,
were =, Oh, 2S3 80, Is per exhibit "a"
to this report, Of which sum S6Sl 1873 ~
were ~ gold and silver. The assets of
the bank in May, 1866, according TO its
books, were Sl4, 902, 3l2 Il, as per eX-
hibit "B' to this report. OF this amount
So, 2SO, 4S7 were in Confederate bonds,
and about 81, 256, 2l0 y in Tennessee
war bonds, and claims against the mill
tary board and state treasurer for funds
checked out by the board and treas
urer. The assets Of the bank, together
with its books and papers, were removed
from Nashville about the middle of
February, 1862, by Cashier Fisher,
President TOrbet and Others, and the
officers Of most Of the branches Joined
the officers Of the principal bank IN the
south with their books, papers and as
sets. The statement OF b. L. Claiborne |
shows that the bank was first removed /
nom Nashville to Memphis, thence to |
Chattanooga, and aiterward to Atlanta, |
Griffin, Greensboro, Macon, Raleigh |
and Augusta, and that the assets were |
seized at Augusta. The assets were /
seized by General Upton, Of the United |
States army, and returned to the State |
under guard, being accompanied by |
Jesse f. Brown, cashier OF the Trenton /
branch. The assets, BOOKS and papers
Of the bank were delivered TO Governor /
BrownloW about the first Of June, 1866,
and appear to have been examined by
legislative committee, appointed for
that purpose, but their schedule was
so indefinite and uncertain as to
be worthless. It wholly failed to
itemize any OF the assets, and wholly
emitted many valuable Sssetss The
legislature on the sixteenth day Of Feb
ruary, 1866, passed an act entitled IAN
set to wind up and settle the business Of
the bank Of Tennessee" whereby it was
provided that the president and board
Of directors Of said bank should make
an assignment Of the assets OF the bank
Ia trust, etc., and that said bank go into
liquidation. The president and board
Of directors Of the bank, on the fourth
day OF May, 1865, in pursuance Of said
act, did execute deed Of trust, by the
terms Of which, they assigned 10 Sam
usI Watson all the assets OF the bank in /
trust fOF the settlement Of its affairs.
said Watson accepted the trgsteeship,
but did not give bonds IS trustee, for the /
alleged reason that the bOad required |
bv law was too large. He hled his bill in /
tie ehAnceTy court at Nashville, for the |
execution OF the trust, and was appoint I
ed receiver, under the orders Of said 1
court. He bias bad possession and con- /
troll Of ID assets and affairs OF the bank /
since May "A, 1895, on which day be ex-
ecuted bond in the penal suns Of $780,
400. AZ trustes and receiver. He was
also elected president OF the bank boon