Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1878-07-21

with capital sufnclently large, directed TO the
objects declared In this letter, they will
readily discover that not only the specific
bank bonds placed In the market would be an
exceilent-indeed, No. / secunty-but that
the operations of the bank would, in two
fold manner, lift the value of State bonds now
held. They comprehended the nature of the
relief 1t would afford to the people, and its
tendency to inculcate and confirm a healthy
sentiment as against indefinite postponement
OF reasonable adjustment of the public debt,
and they would perceive in the scheme of
such bank an earnest, sensible, practical fis-
cal agency by which the payment of the semi
annual interest on the debt, with a moderate
rate of taxation tolerable to the people, could
be certainly and promptly resumed, and per-
manently maintained, thus restoring the
credit of the State and preparing for a grad
ual extinction OF its debt without oppression
to the people. In my opinion, the establish
ment of SUCH bank would be desired and
promoted by capitalists now interested in
Tennessee securities, and that an efficient
capital can. In the mode proposed, be readily
secured. Tue notes of the State bank pro-
Jected should, of course, be made a legal
tender for all dues to the State, ami it should
be made depository OF all State funds. Thus
founded, it would at once engage the CONT
dence of the people, and, having been organ
lied to escape all political mutations and COM
pications In Its internal features, it would
enter on profitable career of business, and
soon begin to vlndicate its establishment IN
the benefits that would be appreciated on
every hand. The history of the old
State bank, despite some very adverse inf1u
ences under which it labored during the
whole period of its existence, was remarka-
BILE success, and speaks a volume iu behalf of
a favorable consideration of Its re -esta blish-
ment. 1t was born in a period of fierce po-
lItieal division In this State, which was con-
trnued during its whole Efe-parties alternat-
ing in power with almost biennial regularity
and its conduct being made the subject of
malevoent criticism from both contest
ants, as it seemed to be their re-
spective interest. Notwithstanding, IN
der discreet officers, the even tenor of its
business way was pursued, and it always
proved tower of strength in the financial
business of the State and the people. 1t was
the very horn of the citadel, when the State
was called to strip for its part in the unfor-
tunate conflict commencing In 1861. 1t sur
vived the extraordinary vicssitudes of that
long struggle. If better counsels had pre-
vailed in 1865, the remnant of its capital
then amounting to seven hundred Thousand
dollars of gold ccin-would not have been
squandered In great part. The suggestion
was made to the then State administration to
convert this coin into United States bonds,
which would have realized a million dollars
or more at the then rate, and upon this as
national banking act. The proposition was
made ey myself, under the then belief and
positive knowledge now, that by judicious
management of the bank so reconstructed,
the obligations to depositors and its notes
both of the old and new lssue-could have
been redeemed, and all the interest on the
State debt could have been paid promptly
from its profits. In lieu of that. the policy of
winding up" the institution was adopted,
and it is still winding toward the bottom of
q sea of litigation and loss When that sug-
gestion was rejected, the bank to which you
referred in your recently published letter
the Third national CT this city-was organ
lied, and its success, to which you alluded,
was not exaggerated. In this connection
of the old bank. During the twenty years |
was its agent, resident in New Oleans, with
its funds IN the shape of bills of exchange,
and through the fundamentally of its we'll
founded credit, | was enabled semi annually
to remit to New York the means to meet the
interest on all bonds issued by the State. As
further evidence of the proftableness of
sound and judcious banking in Tennessee,
may cite attention to the fact that, while
nearly all the banks in the State were literal
ly extinguished in the commissions of the civil
war, the Union and Planters bank of this
State, before referred to, since the close of the
war, have paid every dollar of their outstand-
millions, and have paid to their stockholders
more than twenty five per cent in cash
of their stock, and this, too, after an entire
suspension of business, and under the bur-
den of the Federal tax on their outstanding
notes. l have not offered to discuss the
bank, but have simply presented
some salient facts in the career of tie
former bank, as light upon what | conceive
would be the substantial benefits of a new
and similar Institution. l AM firmly per-
suaded that it is the true policy of the Fed
eral government to remove all disabling
restrictions upon independent banking by
and In the several States, and believe that it
has no right.ul power to impose such. The
country needs more sound circulating medium
than it possesses now, but there will be
an overcoming division of opinion as to
what this amount should be, induced
by the divers and clashing interests of
its different sections and localities
whether this circulation be a mixed one of
coin ond paper, or of paper exclusively, ex-
cept fractional currency. IL is, and should
be, reserved right of the States to establish
for themselves, or to authorize their citizens
to found banks of issue. So long as any
congress which may meet is subject to be
lobbyed this way and that, In the contraction
or initiation of the volume of currency for the
varying needs of our vast area of territory
with its forty millions of people, so long will
there exist financial uncertainty and instabili-
ty, abrupt fluctuations In property values,
timidity of capital, general depression and
monetary distress. With fixed volume of
national paper currency convertible into
government bonds, let the Federal govern.
ment cease its currency legislation, and per-
NIT a State bank system to furnish whatever
additional circulation the wisdom and the
wants of each section or State may indicate
or appear to require. This is the true system
of American finance. II is, in substance,
that of the fathers for many years, and be-
fore the affairs of the people and the States
began to circle In the eddles of the whirlpool
of centrallzation. l am speaking only from
the important standpoint of matters 6s al,
but for many and cogent reasons of another
character, it will be wise to hold ever in view
the truly federal feature of our institutions,
and preserve all the functions of
separate, and in Just limits, sover-
vitality important than in that power of gov
ernment-the regulation of money-whiC b,
in some sense, adjusts values, and is the n E.
dunn of their exchange. 1t has been said
above that there was necessity for larger
volume OF currency In the country. And is
it not urgentP Contrast the condition of
business affairs now and Immediately after
the close of the war. Then every depart
ment OF industry was active, and real prop
erty commanded good prices and was really
of sale, and thus matters continued until tie
summer of 1867, when Mr.. M'Culloch, as
secretary Of the treasury, commenced the
policy of contraction of the currency. Then
the country had eighteen hundred million
of greenback and national bank Is
sue. Under the understanding screw
set in motion at that time, it now has only a
little more than seven hundred millions, and
what is the condition of business in every
lines What is the status of real estate?
Let the experience and observation of every
man in every condition of life, in every Sec
ton of the land answer these questions. The
Country is sick, and the true diagnosis of its
disease is enfeeblement and prostratIon ia
duced by the want of circulating fluid. To
continue the figure, 1t has been bled to the
point of exhaustion, and nothing will tone 1t
into vigor and healthful life out restoration
of what it has lost The need is a
suffi Gent quantity of sound paper mon. y.
This will revive business, restore con
fdence, and re- establish prosperity. For the
south especially, until the debts and in
Movements consequent remotely on the civil
war are substantially iquidated, a paper cur
rency in ample volume Is an absolute neces-
sity. To talk of this sechon reverting to a
system of money, and of prices and wages
such as held before the war-and this is The
essence of the idea of contracting the pa per
currency and resuming specie payments