Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-07-31
A STATE BANK.
Letter from Hon. Geo. w. Jones.
He Opposes the Plan, but Wants the
National Banks Wiped Out, Green
backs with specie Resumption, and
Fee Banks without Circulation.
Memphis appeal.

| National Banks Wiped Out, Green.
hacks with specie Resumption, and
Free Banks without Circulation.
Memphis Appeal.
FAYETTvILI.E, Tenn, July -, 1ST4.-
MeSsrS. NJ. G. Galloway and Marcus J..
| Wright. Gentlemen: In the Nashville
| UNION AND AMERICAN of yesterday there
was republiShed from the Memphis ApDed
an open letter from Comptroller John G.
| Bunch, addressed 10 YOU, and informing
| you that he cOntemplateS recommending to
the next Legislature to establish a State
bank with five million dollars capital as a
revenue measure, the capital for the pro-
posed bank to be raised by the sale of
State bonds, as the writer states in his let
ter, viz:
MY plan would be to re-establish the
bank on the same general principles upon
which the old bank was established, max
ing its issues receivable for taxes and all
other dues of the State. To procure neces-
sary banking capital, issue S5,O00,OOO ofG
per cent forty-year bonds. To secure a
prompt sale and high price for these
| bonds, l would hot only pledge the
| faith, honor, and credit of the State for
| the prompt payment Of both principal
and interest, but would also appropriate
and set apart the profits Of the bank: first.
for the semi annual payment of the inter
| est on the bonds, and after the lapse of a
suitable time l 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 S4,5O0,OO0 realized for banking purpo-
ses. In making this calculation as 10 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 interest of its bonded indebt-
edness. Should be mistaken in this ex-
pectatiOn, cannot fOretell how valueless
Tennessee bonds and Tennessee credit will
become. Under the old and safe barking
rule Of Issuing three for one. we
could, on q banking capital Of S4,j00.OO0
issue a circulation Of Sl3,500,000. /
In field demanding great banking facili-
ties, and comparatively unoccupied, we
might safely calculate upon keeping S10,-
100000 of this circulation in active en-
ployment. L think it probable that at the
reasonable rate Of sixpeT cent. interest, and |
it should not be higher, every dollar of the |
circulation could be constantly and prOfita- |
bly, employed"
\ rather grand scheme and bold recon-
mendatiOn. 10 come from the financial |
agent and guardian Of the peoples interest |
that people already groaning under the |
burden Of a funded and refunded bonded |
debt, with inevitable ruin and poverty Ger |
tain in the no. distant future. if the paw |
ment Of the unjust debt is forced upon the |
productive labor Of the people of the State |
From the same copy Of the NASHVILLE |
UNION AND AMERICAN which contains the |
COmptrOlleTS letter. and from which the |
above is taken, is the following extract, /
taken from the financial article in that |
paper:
Tennessee bonds are quoted in New |
y ork at a. asked for those carrying $3.50 |
accrued interest, while sales are reported Of |
the funded series at "a"
That is. a Tennessee State bond for one /
thousand dollars, bearing six per cent. in
terest per annum. and with $50 unpaid in /
terest due on each bond, only seventy-eigbt !
cents on the dollar is asked. and sales Of |
the late funded series are reported at fifty |
four cents on the dollar; rather an unfavOr-
able time 10 put Sj,OO0,OO0 Of State bonds |
on the marzet. But, like all other schemes |
for mouCaging the property and cnslaving
the people Of the State, it may look well |
on paper. The railroad schemes under /
which the people are now being ground as
between the upper and neither millStOneS.
looked well on paper, and the people, or
rather members of the Legislature, were
duped, and the people CENTRALIZED. The
following IS an extract from the Comp
troller's letter:
Il 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 tie prOvi-
sion in the act Of Congress which imposes
a penalty Of ten per cent. on the circula-
ton Of all other than national banks.
That this provision, enacted as a war
measure to sustain the credit of the FEEDER
al government while the war was fla.rant,
will now be- declared unconstitutional,
cannot doubt. Such provision, under our
and government, cannot be Ell
forced in times Of peace, against an indiyid-
not against a State
And the following is an extract from a
lengthy editorial in the UNION AND AMER
ICAN, containing the COmptroller's letter:
There is but one apparent obstacle TO
llt ltNlNdl Oh our olu NLdlt Udllh. IL II Il !
section Of a Federal revenue law, which
enacts that every national banking asSOci-
alton, State bank or State banking aSsOcia-
ton, shall pay a tax Of ten percentum on
the amount Of notes of any State bank or
State banking association, paid out by
them
This enactment IS a mere nullity. 1t
has never been tested in the courts, and
could not stand a moment. IL occurs in |
an act 80 provide internal revenue to sup
port the government and pay interest on
the public debt As a matter of fact no
revenue is received from this source. Ii is
not a productive tax, but a prOhibitOry one. ]
The comptroller thinks the ten per cent.
tax upon State bank notes was enacted by
Congress rs a war measure, to sustain | !
The credit Of the Federal government, !
when the var was fragrant, will !
now be declared unconstitutional, can
not be dOnbted. The editors of the |
| MON AND AMERICAN say: "ThiS en-
actment Is a mere mllity. Ii has never |
been tested in the courts, and could not |
stand moment" Now. TO the law and | [
the testimony. Act of Congress July u,
1866. provides that every National Bank Z
inc Association. State Bank. or State Bank
ing Association, shall pay tax Of ten per .
cent on The amount oil notes Of any person,
State Bank or State Banking Association /
used for circulation and paid ont by them. {
after the first day Of August. 1866; and [
such tax shall be assessed and paid in such S
manner as shall be prescribed by the Com
missioner Of Internal Retenue.~ This act I
was not passed as war measure to sustain
the credit of the Federal Government: il
was passed more than a year after the close
~ tI,a vrar This act was baf,ra flt., T-r;t.3 !,
States Supreme Count al its December 4
ern, 1869. (See s WallsCe's Reports. / Il
pages 533-JGG, ina the case Of Nedzie bank 5
IS. FennO.) Chief Justice Chase delivered Il
he opinion of the court, in which he said: q
l. - IL l !.