Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-02-05
Financial.

A Washington dispatch states that the
subcommittee of the Banking and Cur
rency Committee, which was appointed
last week to examine and report upon the
subject Of making the redistribution Of
S25,000,000 in National bank circulation,
provided for in the act Of July II, 1870,
will receive little satisfaction from the
Treasury Department, further than was
contained in the last two reports Of that de-
partment. 1t will be recollected that the
Comptroller of the Currency holds that the
proposed redistribution is impraeticable,
and he recommends that instead of taking
the above amount from the Eastern States
for redistribution among the Western and
Southern States, an additional S~25,OOO,OOO
of circulation be provided, which he pro-
poses should be issued to banking asSOcia-
lions organized in States and Territories
having less than their proportion, this adj
ditional circulation to be issued at the rate
of S 100000 per year for five years.
The Memphis Ardldnche says: Some
question was made last fall among lawyers,
of the soundness of the rulings made by the
Supreme Court in November, at Jackson,
in the case of the Bank of West Tennessee,
for the use of its creditors, against stock
holders who had failed to pay their stock
subscriptions. The principal points ruled
were that shareholders who were in arrears
should pay up the full amount of arrearages
necessary to satisfy the creditors of the
bank; and that payments OF stock, made
after the insolvency of the bank, in funds
not coin or the equivalent of coin, did not
discharge the stockholders as against the
creditors: and that where assignments Of
.to,I- hoI haan una1a asor tho .ncplranau
of the bank, the aSsignOrs were not thereby
discharged of liability to the creditors for
for the unpaid arrears on the stock assigned.
The charter required stock to be paid in
coin or funds deemed by the Directors
equivalent to coin, and the geneeal statute
law of the State prescribed that in the case
of inSOlvent corporations a transfer of stock
shall not relieve the stakeholder from LA
bilities which have attached to him as
such previous 10 the transfer. 1t appears
that the Supreme Court of the United
States has, within a few weeks past, taken
much the same view taken by the Supreme
Court Of Tennessee, of the law of the rights
n liabilities Of creditors and stockholders
of insOlvent corporations. The Federal
Court decides that the capital stock Of a
privat9corpCratiOn insOlvent is charged as
with a trust in favor Of creditors Of the
corporation; and that payment of stock
other than in sound funds and in actual
fact is not a valid payment as against credi-
tors, though it might be a valid payment as
between the corporation itself and the
stockholders; and that a stakeholder who
has made a payment Of his stock other than
in sound funds and in actual fact could not
purchase valid claims against the corpora
ton, and set off tine same against his debt
for unpaid stock, in an action by bill in
chancery by creditors against the stock
holders, for the purpose of subjecting the
debt for unpaid stock to the demands Of
the creditors. The case in the Federal
Court was where 4 stakeholder had paid his
stock in cash to the company, and had i'm
mediately borrowed the same money and
given his promIssory note for the amount
as for borrowed money. The decision
made was upon general principles of equity
and not upon any peculiar features in the
charter or statue law.