Year: 1859

=,
and others, at any time, to exceed the
specie in the vaults more than three for
one.


The experience of the financial world
has demonstrated, beyond controversy,
that the convertibility of n paper cur
rency cannot be maintained, at all times,
when the disproportion between their
specie and liabilities runs higher than
this


Ihird.-That no bank be permitted to
issue any note of less denomination than
twenty dollars. This will secure a specie
currency for all the smaller business trans
actions of the country and at least par
tial exemption from losses by bank fail
ures and deprecated currency, of that
class of the community who are least
benefited by bank accommodations, and
yet are generally the most serious sufferers
by their failures or depreciation. And
the large amount of specie necessarily re-
tanned in the country in constant crcu-
lation under this policy, would go far to
relieve, it it did not prevent the CONNER
cial revulsions and financial arrangements
which have been of but too frequent re-
currencc.


Fouth.-That no bank or branch bank
in the State shall issue or put i'm circula-
tion any note or bill that is not payable in
specie at the counter where the same is
issued or put in circulation.


The issue by each bank of nothing but
its counter notes, would coniine the cir
lation of each bank to the legitimate
wants of the community, upon whose
trade it is predicated. 1t would tend to
secure sound currency in each and ev-
cry neighborhood in which a bank NAV
be located by atfording to all an oppor-
tunity OF converting into coin, without
expense, whatever paper might not be
needed as a mere matter of convenience
for our internal trade.


The facility for returning notes thus is
sued upon the bank for redemption,
would serve as IA constant check upon the
banks, and would do much towards keep
ing them within safe limits. 1t would
put an end TO that system of flooding the
country with the depreciated or doubtful
issues of our own or foreign institutions.


FVM.-The individual property of each
stockholder to be liable for the debts of
the bank, but as between themselves,
their liability to be in proportion to the
amount of stock taken by each, and this
liability to the creditors of the bank to
continue for the term of four months af-
ter public notice Of any transfer of stock,
SO tildu tIt CTeultOT pToceeu against
the original stakeholder, if he prefers do
ing so to relying upon the solvency or
management of the purchaser of the
stock. This will prevent solvent stock
holders from relieving themselves from
liabilities to creditors by transferring their
stock to insolvent parties.


Stockholders establish banks and invest
their capital in them for their own pecu-
mary benefit; they have the management
and control of them: if profits accrue
they are the beneficiarics if losses are
sustained, they are bound, by every con-
sideration of honesty and fair dealing, to
bear them: but without some provision
making them individually liable, the
stockholders will pocket the profits, and
when, through their mismanagemtnt or
fraud, the bank fails or its paper depre-
ciates, the note holders are forced to sus-
tain the losses. Banking is purely the
speculation of the stockholders, and they
must incur its hazards if they would re-
alze its profits.


Indeed, where the managers of bank
are disposed to act iradulently, they may
enrich themselves, by getting in circula-
ton the largest amount of their paper
possible, suspend payment, discredit the
paper, and buy it up at mere nominal
rates, or pocket the assets and leave their
creditors to look to the empty vaults of
the corporation for satisfaction of their
claims. Make them individually liable
to the creditors, and they will have no
motive to discredit their own paper, for
they will be bound to make it good to
the holder, and you will thus secure a
much more prudent and safe manage
ment of these institutions, than we have
! ri unlnr tho r,rnsapt svStan


Srth.-Require the registration and
counter,signing of every note to be issued
by bank, by the Secretary of State, or
some other officer of the government, by
which means the public can, at all times,
know the maximum circulation of every
bank in the State, and it would go far to
prevent over issues.


SeuenH-The creation of a Board of
Supervisors, consisting of three compc-
tent men, who shall have the power to
enter and examine the condition of every
bank in the State, at any time, and
whose duty 1t shall be to do so at least
quarterly, and report through the columns
of some newspaper at Nashville, their
true condition, so that the public may
know the real condition of the various
banks, and to what extent they are worthy
of confidence.


The only information the public have
as to the condition of banks, under the
present SYSTEM is through the reports of
their officers, who are interested in ma
king the most favorable report possible,
and whilst, in a great majority Of cases,
these reports are honestly and fairly
made, yet, in some they are not; and the
people are deeply interested in, and have
a right to know, the true condition Of
every bank in the State.


EighM-Make the suspension of specie
payment for the term of twenty days, or
the violation Of any provision of the act
of incorporation forfeiture of charter,
and give the supervisors the power, when
they shall be satisfied by full examina-
ton that any bank has thus suspended or
violated its charter, and that the security
of the public interest demands it, to at
tach the assets of the bank for the bene
fit of creditors, and to proceed at once to
prosecute the bank to a judgment of for
feiture. Make it also their duty to re-
port to each session of the Legislature,
and to recommend such reforms as they
may deem necessary to the perfection OF
the system.


Minth.-Such penalties and forfeitures
as will insure strict observance of, and
conformity to, all of the above, and such
other restrictions as you may see proper
to impose.


With these restrictions imposed upon
the banking system of the State, our cur
rency must become much more uniform,
sound, and reliable, than it has been
heretofore under the present banking
system, and, under these restrictions,
stockholders have an ample margin for
legitimate and highly remunerative prof
its.


While it is indispensably necessary to
the security of the public, that the people