Q)
REPORT
OF THE
SELECT COMMITTEE
ON THE
UNION BANK
OF THE
STATE OF TENNESSEE.
HOUSE OF REPRESENTATIVES, JVovembtr 16, 1838:
Read, and ordered to be printed,
ALLEN A. If ALL, PRINTER TO THE HOUSE.
1833.
REPORT.
The select Committee appointed to examine into the
condition of the Union Bank of the State of Tennes¬
see, have discharged that duty, and
REPORT:
From an examination of the books of the bank, the
committee find, that on the 10th of October, the capital
paid in, amounted to $1,242,647 47
That the President and Directors had
discounted notes to the amount of $513,691 71
Domestic bills of exchange* to the
amount of 1,211,187 60
Making the sum of 1,724,879 31
The amount of bank notes in circulation 751,355 00
Payable at the following points:
At Nashville, 138,130 00
At Jackson, 22,420 00
At Philadelphia, 60,230 00
At Baltimore, 530,575 00 .
Total, 751,355 00
4
The liabilities and means of the Union Bank, up to
the period aforesaid, are as follows:
LIABILITIES.
Including the capital paid in, 2,266,635 05
MEANS,
To meet these liabilities, . 2,397,754 81
Showing that the Union Bank had made
from the time it went into operation, to wit,
4th March to 10th October, 131,119 00
The committee have thought proper to
extend the examination down to the 18th
inst. and find that the bank at that period
had in circulation, 1,056,865 00
That there were notes discounted, 510,347 00
Bills of Exchange, 1,698,249 08
And that the bank had made up to the
latter period, 145,000 00
Provided the bank had made no bad debts, and it is
believed by its officers to have made none.
The committee entertain no doubt of the soundness
of the condition of the Union Bank, and that it has
ample means to meet all its engagements.
The polipy upon which the institution has been con¬
ducted, was well calculated to enhance its profits, and
has been conducted with an eye single to the interest of
the stockholders,
From the time the bank commenced doing business,
up to the 5th of June, seven per centum per annum,
was charged and taken upon notes that had but ninety
days to run, until due and payable, and two per cent.
exchange, in addition to the interest charged on bills,
without regard to time. The directory at that period,
changed the rate of interest and exchange, and have
5
since charged and taken six per centum per annum
upon ninety days notes, according to the true intent
and meaning of the Charter, and the following rate of
interest and exchange on domestic bills:
On bills having six months and under, to ma¬
ture, one per cent, exchange, and six per
cent, per annum interest, 7 per cent.
Over six months to eight months inclusive,
exchange and interest, 8
Over eight months, to ten months inclusive, 91-2
Over ten months, to twelve months inclusive, 10
In addition to the interest and exchange, the bank in¬
variably requires an acceptor of the bill, before it is dis¬
counted, which is an additional charge of two and one
half per cent, paid to the acceptor, making from 12 to
12 1-2 per cent. Hence the great disparity in the
amount of notes discounted, 510,317 00
And bills of exchange, 1,G98,249 08*
The committee concede that the dealing in exchange
is far more profitable to the bank, than in discounting
of notes, and is believed to be as safe to the bank; yet
the great body of the people, have not the facilities
necessary for the successful drawing of bills, obtaining
an acceptance, and have them discounted in bank; con¬
sequently the commercial part of the community, are
to a very great extent, the debtors of the bank, and in
many instances to large amounts.
The committee entertain no doubt that the object the
legislature had in view, when the right was given the
Union Bank, of charging 6, 7, and 8 per cent, in dis¬
counting notes according to the time they had to ma¬
ture, was, that an opportunity would be given the people,
upon well endorsed notes, to borrow money from the
bank upon eight and twelve months credit—a sufficient
6
time for the former's crop to mature and be brought to
market—and that the bank would not withhold its funds,
which would enable him to anticipate his crop, and re¬
lieve himself from his present wants, unless he should
present a bill, drawn by an individual known to the
commercial world, on some foreign commercial house,
and accepted, and that at a cost from 12 to 12 1-2 per
cent, per annum
All which is respectfully submitted.
JO. C. GUILD,
Chairman of the Select Committee.