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Author: 
 
 Tennessee. Laws, 
 statutes, etc. 
 
 Title: 
 
 Charter of the State Bank 
 of Tennessee 
 
 Place: 
 
 Nashville 
 
 Date: 
 
 1837 
 
MASTER NEGATIVE # 
 
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 BIBLIOGRAPHIC MICROFORM TARGET 
 
 ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD 
 
 4^ 
 
 Business 
 733 
 T25 
 
 Tennessee. Lav'fs, statutes, etc. 
 
 Charter of the State bank of Tennessee. Passed 
 January 19th, 1838 tlj Nashville, C. llye and 
 CO. printers; 1837, 
 
 27 p. 22«n. 
 
 "Passed January 25th, 1857": p. 27. 
 
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 CHARTER 
 
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 PASSED JANUARY l»th, 18S8, 
 
 
 
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 •chool of Business Library 
 Coitanibia Uiiivprs?ty 
 
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 DIRECTORS. 
 
 William Nichol, of Nashville^ 
 Oliver B. Hays, do. 
 
 John Shelby, do. 
 
 Henry Ewing, do. 
 
 George W. Campbell, do. 
 Joseph W. Clay, Davidson county. 
 Joseph W. Horton, do. 
 
 Nicholas Perkins, Williamson county, 
 Jonathan Currin, Rutherford county. 
 Samuel R. Anderson, Sumner county, 
 Benjamin T. Motley, Wilson county. 
 Theo. F. Bradford, Bedford county. 
 
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 AN ACT 
 
 To establish a State Eank^ to raise a fund for In- 
 ternal Improvement,, and to aid in the establish' 
 mentofa system dj Education^ 
 
 Section I. Be it enacted by the General Assembly of 
 the State of Ttnnessee, That a Bank shall be and is hereby 
 established, in the name and for the benefit of the State, to 
 be known under the name and style of "The Bank of Ten- 
 nessee," and the faith and credit of the State are hereby 
 pledged for the support of the said Bank, and to supply any 
 deficiency in the funds hereinafter specially pledged, and to 
 give indemnity for all losses arising from such deficiency. 
 
 Sec. 2. Be it enacted. That the capital of said Bank 
 shall be five millions of dollars, to be raised and constituted 
 as follows: the whole of the Common School Fund, whether 
 the same is vested in stock in the present banks in the State, 
 or in the hands of the Superintendent of Public Instruction, 
 or in the hands of the county agents or other persons, ex- 
 cept so much as may have been vested in any works of inter- 
 nal improvement, as well as the proceeds of the Ocoee lands, 
 shall constitute a part of the capital of the Bank of Tennes- 
 see: the surplus revenue on deposit with the State, together 
 with the unexpended interest thereon, shall also constitute a 
 
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 part of the stock of said Bank: and in addition to these 
 amounts a sum shall be raised in specie, or funds convertable 
 into specie at par value, on the faiih of the State, sufficient 
 to make the whole capital five milHons of dollars; provided, 
 thrit if the fourth instalment of the surplus revenue, appor- 
 tioned under the act of Congress, approved 23d June, 1836, 
 should be deposited with this State, the amount received 
 shall be added to and constitute a part of the capital of said 
 Bank, and be an addition to the capital stock of five milhons 
 of dollars above specified; Provided further, that the Stock 
 owned by the State, in the Union Bank, shall not constitute 
 any portion of the capital of the Bank of Tennessee. 
 
 Sec. 3. Be it enacted, That the money belonging to 
 the Common School Fund, which now may be in possession 
 of the Superintendent of Public Instruction, or which may 
 hereafter come into his possession, shall be handed over to 
 the president pnd directors of the Bank of Tennessee, as 
 capital in said Bank, and said president and directors, or a 
 majority of them, shall be authorized and required for and 
 in behalf of the State, and with a pledge of the public faith 
 and ciedit, to issue to the superintendent aforesaid state slock 
 or certificates of debt, for such sum or sums as may be from 
 time to time paid over by the said superintendant to the said 
 president and directors; and the Governor of the State, the 
 Comptroller of the Treasury, and the Superintendent of Pub- 
 lic Instruction, shall dispose of the stock in any and all the 
 Banks of the State, belonging to the common school fund, 
 whenever the same can be sold at par for specie, or funds 
 convertible into specie, at par value, and pay over the pro- 
 ceeds to the president and directors of the Bank, who shall 
 issue certificates of stock to the superintendent of public in- 
 struction as aforesaid; Provided, that any dividends on the 
 same, which shall not be declared at the time of the sale, 
 shall not be sold with the stock, but the same shall be re- 
 ceived by the superintendent and paid over to the president 
 
 5 
 
 and directors of the Bank, and shall constitute a part of the 
 contingent fund, to meet the annual or semi-annual liabilities 
 of the Bank, as shall also the interest and dividends which 
 may hereafter arise on any portion of the capital of the school 
 fund, before said capital is paid over to the president and di- 
 rectors of said Bank; and in like manner the superintendent 
 of public instruction shall pay over the proceeds of the sale 
 of the Ocoee lands as they are received, and take certificates 
 of stock; Provided, that if a system of common schools 
 shall be adopted and put into operation, by the present Gen- 
 eral Assembly, the funds which may accrue after the year 
 1837, for the benefit of common schools, from the bonuses 
 of the present Banks, and bonuses and dividends arising from 
 other incorporate companies, and from privileges, fines, pe- 
 nalties and taxes, shall constitute part of the annual fund for 
 distribution by the superintendent, and shall not be subscrib- 
 ed in stock in the State Bank. But should a system of 
 common schools not be adopted as aforesaid, then said funds 
 to be vested in stock in said Bank, until otherwise directed 
 by the General Assembly. 
 
 Sec. 4. Be it enacted, That it shall be the duty of the 
 comptroller of the treasury to draw from the Union Bank, 
 the Planters Bank, and the Farmers and Merchants Bank, 
 the amount of the surplus federal revenue now on deposite 
 with said Banks, in two yearly instalments; the first instal- 
 ment to be drawn on the 1st day of January, 1839, each in- 
 stalment to be drawn in specie or funds convertible immedi- 
 ately into specie at par value; and as soon as each instal- 
 ment is received, he shall pay over the same to the presi- 
 dent and directors of the State Bank, and receive certificates 
 of stock, which shall be kept by him for the benefit of the 
 Stale; Provided, that if the said Banks, or either of them, 
 shall fail or refuse upon demand made as aforesaid, to pay 
 over the surplus, or any part which may be demanded, at 
 the times aforesaid, then the comptroller shall direct suits to 
 
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 he instituted by the Aitorney General of the State, for the 
 amount so withheld, together with the ten per cent, authoriz- 
 ed by their charters; and until said instalments are demand- 
 ed, the present banks shall hold the surplus at the rate of six 
 per cent, per annum, payable half yearly, and the interest 
 .so accruing; shall constitute part of the sinking fund herein- 
 after designated. 
 
 Sec. 5. Be it enacted, That it shall be the duty of the 
 Governor of the State, on behalf of the State, to execute 
 the bonds of the State, for two and a half millions of dollars, 
 which bonds shall be signed officially by the Governor, and 
 countersigned by the secretary of state, with the seal of the 
 State affixed, and payable thirty years after date to the presi- 
 dent and directors of the Bank of Tennessee, or their as- 
 signs, bearing an interest not exceeding six per centum per 
 annum, which shall be payable semi-annually, at the office 
 of the Treasurer of Tennessee, or at such other place within 
 the limits of the United States, as the president and direc- 
 tors may select, which said bonds shall be delivered to the 
 president and directors of said Bank; Provided, the Gover- 
 nor shall execute said bonds of any amount, not less than one 
 thousand dollars each, and payable in such denomination of 
 money as the president and directors may require; which 
 bonds and also those hereafter diiected to be issued, to pay 
 for stock in internal improvement companies, shall be made 
 payable to, and be sold and disposed of by, the president 
 and directors of said Bank, for specie, or funds convertible 
 into specie without loss, and shall not be sold at a discount. 
 And whenever any State bonds may be issued for the benefit 
 of any internal improvement company, as hereinafter direct- 
 ed, the Governor shall deliver them to the president and di- 
 rectors of the Bank, and the full amount thereof at their 
 nominal value, when the proceeds are received by the Bank, 
 shall be placed to the credit of the company, for whose ben- 
 efit such bonds may have issued, and any premium for which 
 
 5uch bonds may be sold, shall inure to the benefit of the 
 State; Provided, that if at the end of ninety days after any 
 bonds may have been delivered to the Bank; such bonds 
 have not been sold at par as herein provided for, then the 
 president and directors of the Bank shall, on application of 
 the president and directors of the internal improvement com- 
 pany, for which such bonds were issued, ileliver the. same 
 to them upon their receiving them in payment of the State's 
 subscription at their nominal value; or the said president and 
 directors of the Bank may at their election pay such internal 
 improvement company the amount of such bonds, at their 
 nominal vrlue, and retain the same to be kept or disposed of 
 for the benefit of the State. 
 
 Sec 6. Beit enacted, that immediately after the loca- 
 tion of the principal Bank and branches the Governor of 
 the State, shall nominate and appoint twelve persons to act as 
 directers, more than one third of whom, shall in no case be 
 merchants; and which nomination and appointment, shall be 
 subject to confirmation, or rejection, by the General Assem- 
 bly, and the twelve persons so nominated and confirmed, 
 shall constitute the directors — one of whom shall be the presi- 
 dent who are hereby incorporated, and made a body politic 
 and corporate, by the name and style of "The President and 
 Directors of the Bank of Tennessee," and shall so continue 
 until the 1st day of January 1868, and by that name shall sue 
 and be sued, plead and be impleaded, and they are hereby 
 made able and capable in law, to have, receive, purchase, en- 
 joy and retain, to them and their successors, lands, rents, ten- 
 ements, hereditaments, goods, chattels and effects, of what 
 kind, nature or quality soever, and the same to sell, grant de- 
 mise, alien or dispose of; and also to make, have and use a 
 common seal, and the same to break, alter and renew at their 
 pleasure, also to ordain establish and put in execution such 
 by-laws, ordinances, and regulations, as shall seem necessary 
 and convenient for the government of said corporation, not 
 
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 being contrary to the laws and constitution of the State, or of 
 the United States. 
 
 Sec. 7. Be it enacted, That the president and direc- 
 tors as elected, shall continue in office for two years, and un- 
 til their successors are nominated and confirmed as aforesaid. 
 Sec. S. Be it enacted, That of the dividends which 
 shall be declared by the Bank, one hundred thousands dol^ 
 lars, shall be annually set apart for common schools, and the 
 faith of the State is hereby pledged, for an annual 
 appropriation of said amount to common schools, to be ap- 
 pHed as the general assembly may direct. Of the dividends 
 of the Bank remaining, there shall be annually appropriated 
 for thirty years, and no longer, or not so long, if the Bank 
 should not contiue so long in operation, eighteen thousand 
 dollars to county academies, to be applied as the general as* 
 sembly may direct, and the faith of the State is hereby pledg- 
 ed for the annual payment of the said sum; Provided, the 
 trustees of the respective county academies in the several 
 counties of this State, shall relinquish to the State all claims 
 which they have against the State of Tennessee, for the debt 
 due to those institutions from citizens residing south of French 
 Board and Holston, and west of Big Pigeon rivers, and all 
 claims they may have to lands in the Ocoee district, as well as 
 all claims which they have against said citizens, which relin- 
 quishments shall be filed in the office of the Secretary of state, 
 and the proceeds of two half townships of land in the Ocoee 
 district, reserved by the act disposing of said lands for the 
 use of colleges and academies, shall be set apart for and given 
 to the East Tennessee college and Nashville University, upon 
 the trustees of said institutions executing such relinquish- 
 ments, as are herein directed for the academies; and provided 
 further, that such of said institutions as shall rehnquish, as 
 herein provided for, shall be entitled to their rateable propor- 
 tion of the fund herein appropriated, according to the terms 
 of said appropriation, and on such further conditions as the 
 
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 9 
 
 present General Assembly may prescribe, in the event the 
 federal government shall hereafter relinquish to the State of 
 Tennessee, the vacant lands south and west of the congres- 
 sional reservation line, an amount of forty thousand dollars, 
 out of the sale of those lands, shall be set apart as a perpetual 
 fund for the support of a college in the western district ;^pro- 
 vided, that the general government in the act of relinquishment 
 shall grant to the use of such college the^ appropriation herein 
 made. The balance of the dividends shall be set apart as a 
 sinking fund, to be applied to the extmguishmentof the accru- 
 ing interest on the bonds of the State,whether the same have 
 been executed under any former act, or may be executed un- 
 der this act. 
 
 Sec. 9 Be it enacted, That the following powers, rules, 
 conditions, limitations and restrictions, shall be fundamental 
 laws of said Bafik, viz: 
 
 Article 1. The board shall select on of their number 
 to reside over their deliberations, who shall be elected by a ma- 
 jority of the Directors present, of whom not less than five, 
 shall constitute a quorum to do business; and no person not a 
 citizen of this State, or who is a stockholder, or director of 
 any other Bank, or co-partner of any such director in trade 
 and merchandise, shall be eligible as a director; Provided, 
 should It so happen that any director should be appointed, who 
 is a stockholder or director in any other Bank, his seat shall 
 be considered vacant and the place filled by the other directors 
 as in other cases of vacancy; and provided further, if any di- 
 rector appointed as aforesaid shall, during his continuance in 
 office, purchase stock or become a director in any other Bank 
 his seat shall be vacated, which shall befiUed by the directory 
 as in other cases. 
 
 Art 2. The President and Directors for the time be- 
 ing, shall have power to elect and remove the cashier, and 
 they shall also have power to appoint such officers, clerks 
 and servants under them as shall be necessary for executing 
 
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 the business of the said corporation, and allow them such 
 compensation for their services, as may be reasonable. 
 
 Art. 3 No director shall be entitled to any emolument, 
 but the directors for the time being, shall have pov^^er to make 
 such compensation to the president of the Bank, for his ex- 
 traordinary attendance at the Bank and superintending its con- 
 cerns, as shall to them seem reasonable. No discount shall 
 be made when the cashier may be a maker or endorser. 
 
 Art. 4. They shall receive money on deposit, and pay 
 away the same to order, free of expense, deal in bills of ex- 
 change, and buy and sell any of the State stock now issued, or 
 that may hereafter issue, and discount notes at said Bank with 
 two or more good endorsers thereon, at a rate of interest not 
 exceeding six per cent per annum; Provided^ that this article 
 shall not be construed so as to prevent the said Bank from de- 
 manding and receiving a reasonable premium for exchange, in 
 addition to the interest, upon bills or notes payable at a point 
 beyond the limits of this State. Provided also that said Bank 
 or either of said branches, never shall purchase and have 
 running to maturity, or on hand, a greater amount of bills of 
 exchange than the amount of notes under discount. 
 
 Art. 5. The total amount of debts which said corpor- 
 ation shall at any time owe, whether by bond, bill, note or 
 contract shall not exceed twice the amount of the capital stock 
 paid in at the time over and above the moneys on actual de- 
 posit e for safe keeping. Nor shall the entire amount of the 
 risk or investment of securities in what form soever (save and 
 except actual cuirent coin) at any time exceed twice the a- 
 mount of the capital stock paid in. 
 
 Art. 6. In case of excess the directors under whose 
 administration it shall happen, shall be liable for the same in 
 their private capacities, and an action of debt may in such case 
 be brought against them or any of them or their heirs, execu- 
 tors or administrators, in any court of this State, having juris- 
 diction, by any creditor or creditors of the said corporation 
 
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 11 
 
 and may be prosecuted to judgment and execution; any cou 
 dition, covenant and agreement, to the contrary notwithstand- 
 ing. But this shall not be so construed to exempt said Banks, 
 or the lands, tenements, goods or chattels of the same, and on 
 their insufficiency, the State of Tennessee being also liable 
 for, and being chargeable with the said excess; such of the di- 
 rectors who may have been absent when said excess was con- 
 tracted or created, shall be exonerated from individual liability 
 — or who may have dissented from the resolution or act by 
 - which the same was contracted or created, may respectively 
 exonerate themselves from being individually liable, by enter- 
 ing, if present, their dissent on the Books of the Bank, at the 
 time the debt may be so contracted, and forthwith give notice 
 of the same to the comptroller of the State. 
 
 Art. 7. In case of vacancy, occasioned by the death, 
 resignation or removal out of the State or otherwise, of any 
 director, a majority of the directors shall fill such vacancy, 
 and the director so appointed shall hold Ijis office during the 
 unexpired term of the director so vacating; and in case of 
 sickness or necessary absence of the president, the board 
 may appoint a president for the time. 
 
 Art. 8. The directors shall keep fair and regular min- 
 utes of their proceedings, in a well bound book, and on ques- 
 tions where two directors shall request it, the yeas and nays 
 shall be ordered; and on all such questions, every member 
 present shall be required to vote; and these minutes shall at all 
 times be produced on the demand of the Legislature, or any 
 committee legally authorised to require the same. 
 
 Art. 9. Every president and cashier, before he enters 
 on the execution of his duty, shall give bond with two or 
 more securities, to the satisfaction of the directors, payable 
 to the Governor of the State, in a sum not less than one hun- 
 dred thousand dollars, conditioned for the faithful performance 
 of his duty; and the tellers and clerks shall give like security 
 in a sum not less than twenty thousand dollars, which bonds 
 shall be filed and recorded in the Secretary's office. 
 
 
 
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 Art. 10. The president, directors and cashier, and all 
 other officers of the principal Bank and branches, shall take 
 and subscribe the following oath, on entering on the duties of 
 their respective offices: "I, A. B. do solemnly swear or af- 
 firm, that I will faithfully discharge the trust reposed in me 
 
 as — of the Bank of Tennessee, and that I will not 
 
 wilfully or knowingly violate any direction or provision of the 
 charter thereof. So help me God." 
 
 Art. 11» All bills, bonds and notes of the corporation, 
 shall be signed by the president and countersigned by the 
 cashier thereof, and the fund of the Bank shall in no wise be 
 held responsible therefor, unless the same shall be executed as 
 aforesaid. 
 
 Art. 12. The bills or notes which it shall be lawful for 
 said corporation to issue and circulate, shall not be for a less 
 denomination than five dollars, and after the first day of Jan- 
 uary 1S41, not less than ten dollars. 
 
 Art. 13. The board of directors shall be capable of 
 exercising such other powers and authorities as may be neces- 
 sary for the well governing and ordering the afl^airs of the said 
 corporation, and of promoting its interests and credit. 
 
 Sec. 10. Be it enacted^ That the bills obligatory or of 
 credit, under the seal of said corporation, which shall be made 
 to any person or persons, shall be assignable by endorsement 
 thereupon under the hand or hands of such person or persons, 
 and of his, her or their assignee or assignees, and so as abso- 
 lutely to transfer and vest the property thereof in each and 
 every assignee or assignees successively, and to enable such 
 assignee or assignees, to bring and maintain an action thereup- 
 on in his, her or their name or names and bills or notes which 
 may be assigned by order of the said corporation, signed by 
 the president and countersigned by the cashier thereof, prom- 
 ising the payment of money to any person or persons, his, 
 her or their order, or to bearer, though not under the seal of 
 the said corporation, shall be binding and obligatory upon the 
 
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 .;nme iu like manner and with the like force and effect as upon 
 any private person or persons, if issued by him, her or them, 
 in his her or their privateer naturalcapaci'y or capacities, and 
 shall be assignable and negotiable in like manner as if they were 
 so issued by such private person or person; that is to say,lthose 
 which are or shall be payable to any person or persons, his, 
 her or their order, shall be assignable by endorsement m like 
 manner as foreign bills of exchange now are, and those which 
 are or shall be payable to bearer, shall be negotiable and as- 
 signable by delivery only. 
 
 Skc 11 Be it enacted, That it shall be the duty of the 
 president and directors of the principal Bank and branches, to 
 urnish to the General Assembly, within the first week of every 
 regular session, statements of the amount of the capital stock 
 of said corporation, and of the debts due the same, of the mo- 
 nies deposited therein, of the notes in circulation and of the 
 cash on hand, together with all other property of said Bank, 
 both real and personal and the General Assembly shall have 
 the right to inspect all such accounts in the Bank as relates to 
 the transactions of said principal Bank and branches, and 
 shall, whenever it may be deemed necessary, appoint a joint 
 committee of both houses of the General Assembly for that 
 purpose, with full power to send for persons and papers; and 
 ft shall be the duty of the Comptroller to inspect all accounts 
 in the books of the principal Bank and branches, as often as 
 he may please; and it shall and is hereby declared to be his 
 duty, faithfully to report all and every violation of the funda- 
 mental rules of this corporation to the Legislature. 
 
 Sec 12. Be it enacted, That the bills or notes of the 
 said corporation, originally made payable, or which shall have 
 become payable on demand, in gold or silver coin, sha be 
 receivable at the treasury of this State, and by aU tax collec- 
 tors and other public officers, in all payments for taxes or 
 other monies due to the State. 
 
 Sec. 13. Be it enacted. That a majority of the raem- 
 
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 beis present, at any regular meeting of the directors of llm 
 principal Bank and branches, may suspend any director with 
 a view to his expulsion, and any member may be expelled 
 at a meeting of the board of directors specially convened bj^ 
 the president for that purpose, as soon after such suspension 
 takes place as practicable; but such expulsion shall not 
 be made by a majority of less than two thirds of the whole 
 number of directors. 
 
 Sec. 14. Be it enacted, That it shall be the duty of the 
 comptroller to make a biennial report to the Legislature on 
 the subject of the principal Bank and branches, and if in his 
 opinion the transactions of the principal Bank and branches, 
 or any particular circumstance relating thereto, shall require 
 It, he shall apply to the General Assembly for a select com- 
 mittee, who shall take into consideration any matters relating 
 to the principal Bank and branches, submitted to them by the 
 comptroller, and report thereon, at the discretion of the Le- 
 gislature; and the comptroller shall be furnished by the prin- 
 cipal Bank and branches, with a general statement of their 
 condition once in every month. 
 
 Sec. 8. Be it enacted, That it shall be the duty of the 
 president and directors of the Bank, to publish quarterly in 
 some newspaper, the state and condition of the Bank and its 
 branches. 
 
 Sec 16. Be it enacted, That if any president, director, 
 or cashier, or other officers of the said Bank, or any of it^ 
 branches, shall embezzle or fraudulently convert to his or to 
 their own use, any sum of money, bank note, bill of exchange, 
 check, bond, or other security, placed under his care Ld 
 management the person so offending, his aiders, abettors, 
 and counsellors, upon conviction thereof, shall be judged 
 guilty of felony, and be semenced to imprisonment in the 
 btate Penitentiary, for a term not less than three years, nor 
 more than twenty-one years, the term to be fixed at the dis- 
 cretion of the jury trying said offence, and shall forever 
 
 15 
 
 thereafter be disqualified from holding any office of profit or 
 trust in this State, and shall moreover be liable for the sum 
 
 embezzled. , 
 
 Sec 17. Be it enacted. That the sums discounted on 
 notes with two or more sufficient securities, as provided for 
 by this act, shall be apportioned, as far as practicable, among 
 the several counties in this State, annually, in proportion to 
 the qualified voters, and the preside..! and cashier of the 
 Bank or branch, shall give notice in some public paper print- 
 ed in the county in which the Bank or branch may be located, 
 stating the amount that each county may be entitled to bor- 
 row, within ten days after the right to borrow in manner afore- 
 said may arise; and should the sum, or any part thereof, to 
 which any county should be thus entitled, be not applied for 
 within fifteen days after such notice, by the inhabitants there- 
 of by presenting bills or notes for discount, with good en- 
 dorsers, then it maybe discounted as aforesaid, to any person 
 or persons applying for the same. The principal Bank and 
 three branches shall be located in Middle Tennessee, two 
 branches of the said Bank in the Western District, and two 
 branches in East Tennessee. 
 
 Sec 18 Be it enacted. That the lands, tenements, and 
 hereditaments which it may be lawful for said corporation to 
 hold, shall be only such as shall be requisite for its immediate 
 accommodation for the transaction of its business, and such 
 as have been bona fide mortgaged to it by way of security tor, 
 or conveyed to it in satisfaction of debts previously contract- 
 ed in the course of ordinary banking business, or purchased 
 at sales upon judgments or decrees rendered in favor of said 
 
 ^^Ec 19. Be it enacted. That it shall be the duty of the 
 Governor, as soon as the directors are appointed of the prin- 
 cipal Bank and branches, to convene the several boards of 
 the same by advertisement in some newspaper, givmg ten 
 
 M 
 
 
 m 
 
1! 
 
 r 
 
 
 IG 
 
 days notice thereof, at tlie place the Bank or branch may be 
 located, for the purpose of carrying this act into effect 
 
 Sec. 20. Be it enacted. That whenever the president 
 and directors of any co.npany incorporated for the purposes 
 of .nternaJ .mprovement, shall negotiate any bonds execut- 
 ed under the provisions of this act, it shall be their duty to 
 notify the president and directors of the Bank, of the place 
 
 Vu u '^t'"'"""'' °" '"''^ ^°'"^' '' ^'iP"la'ed to be paid, 
 wh,ch sWl be within the limits of the United States, and 
 the president and directors of the Bank shall provide for the 
 payment of the interest aforesaid, out of the dividends of the 
 Bank; Provided, that if there shall be a surplus of the divi- 
 dends, after setting apart the amount appropriated to com- 
 mon schools and academies, and after paying the interest on 
 the bonds of the State, the same shall be held by the Bank as 
 a contingent fund, to be appropriated at any time when there 
 may occur a deficiency in the dividends for the purposes 
 aforesaid; M provided also, that if at any time there shall 
 be a deficiency m the dividends to liquidate the accruing in- 
 
 msuflicient for such purpose, such deficiency shall be made 
 up out of any uninvested dividends that may have been de- 
 c ared on the stock owned by the State, in the several works 
 of internal improvement; and if there should still be a defici- 
 ency the same shall be made up by the individual stockhold- 
 ers of the several roads in which the State has subscribed for 
 stock ,n proportion to the amount for which the State may 
 have issued her bonds in each, the amount so paid by the 
 several companies, to be reimbursed out of the first dividends 
 declared m favor of the State on her stock in said compa- 
 nies. In the event the dividends of the Bank and the pro- 
 fits arising from the stock of the State in internal improve- 
 ments shall prove insufficient to liquidate the interest on the 
 
 ment, .t shall be the duty of the Governor to notify the pre- 
 
 17 
 
 sident and directors of such companies in which the state has 
 subscribed for stock, at leas! three months before the interest 
 will become payable on the state's bonds of the probable de- 
 ficit, and of the amount which will be required of each company 
 to be paid in order to meet the interest on the bonds of the 
 state, and upon receiving such notice from the Governor, it 
 shall be the duty of the president and directors of each and 
 every company thus notified, forthwith to make a call upon 
 the individual stockholders, for an amount equal to the sum 
 claimed by the Governor, in his notice to said companies, 
 which sum or sums of money shall be paid at the time, place, 
 and manner required by the Governor, and upon failure there- 
 of, by any of said companies, to meet the instalment thus 
 required, it shall be deemed and taken to be a forfeiture of 
 the interest of the individual stockholder or stockholders thus 
 failing to pay the instalment called for by the Governor; and 
 Provided further, that no state bonds shall be issued for the 
 payment of state stock, in works of internal improvement, 
 under the provisio<is of this act, until the Bank hereby estab- 
 lished shall go into operation. 
 
 Sec. 21. Be it enacted, That the State of Tennessee 
 shall become a subscriber for one half of the capital stock in 
 all rail roads, McAdamized turnpikes, graded turnpikes and 
 sanded turnpikes, for which acts of incorporation have here- 
 tofore been granted, or for which acts of incorporation may 
 be hereafter granted; Provided, that the subscription on the 
 part of the state shall not exceed an average of three thou- 
 sand dollars per mile in any company for McAdamized turn- 
 pikes, nor shall it exceed one thousand dollars per mile on 
 graded turnpikes, nor seven hundred and fifty dollais'per milein 
 sanded turnpikes; Provided also, the subscription by the state 
 to the Charleston and Cincinnati rail road, and the Hiwassee 
 rail road, shall not exceed one million three hundred thou- 
 sand dollars, to be equally divided between them, and to be 
 expended within the State of Tennessee. 
 
 3 
 
 
 Ml' 
 
 V 
 
T- i 
 
 18 
 
 Sec. 22. Be it enacted^ That whenever the Governor 
 shall be notified in writing by the president and directors of 
 any company, for the construction of rail roads, McAdam- 
 ized turnpikes, graded turnpikes, or sanded turnpikes, that 
 one half of the capital stock of said company has been sub- 
 scribed for, thereupon the Governor shall appoint a number 
 of directors, not to be stockholders, equal to the number 
 elected by individual stockholders, and if in the opinion of 
 two thirds of said entire board, the payment is well secured 
 by the individual stockholders, or that the individual stock- 
 holders are good and solvent persons, and fully able to pay 
 the amount of stock subscribed for by each of them, and that 
 they have paid ten per cent, upon the stock, the Governor of 
 the state is hereby authorized and empowered, and required 
 to subscribe on behalf of the state for the amount provided 
 for in the foregoing section; and from the date of the sub- 
 scription by the Governor, the state shall have a lien upon 
 the property of each individual stockholder, to the amount of 
 the stock owned by each, and upon the failure of any stock- 
 holder to pay any subsequent instalment after the first, such 
 failure shall not operate as a forfeiture of the stock, unless 
 the president and directors shall so agree, but payment shall 
 be enforced by the president and directors, and no transfer 
 or assignment of stock shall defeat the said lien; provided, 
 that said lien shall cease after the individual stockholders shall 
 have paid in one half their stock. 
 
 Sec. 23. Be it enacted, That whenever the individual 
 stockholders of any of the said companies in which the State 
 has become a stockholder under this act, shall have paid five 
 per cent, in addition to the ten per cent, heretofore provided to 
 be paid, making fifteen per cent, upon the amount of their stock, 
 and the president and directors of such company shall notify the 
 Governor of that fact, he is hereby authorized and required 
 to issue the bonds of the State, signed officially by him and 
 countersigned by the Secretary of State, with the seal of the 
 
 ■ 
 1 
 
 19 
 
 Stale, payable thirty years after execution, and bearing an in- 
 terest of five per cent, per annum, payable semi-annually at the 
 office of the Treasurer of Tennessee, or such other places 
 as the president and directors negotiating the same may de- 
 signate, for an amount equal to fifteen per cent, of the stock 
 subscribed by the State in said company, and deliver said 
 bonds to the president and directors of said company, in 
 full payment of fifteen per cent of the State subscription. 
 And upon the further payment of fifteen per cent, upon the 
 stock of individual stockholders in any of said companies, the 
 Governor shall issue the bonds of the State for fifteen per cent, 
 of more of the stock of the State, in the same manner and un- 
 der the same rules, regulations and restrictions as herein before 
 provided; and upon the further payment of five per cent, or 
 more upon the stock of individual stockholders, the Governor 
 is authorized and required to issue the bonds of the State for 
 the like proportion of the stock due by the State, under the 
 same rules, regulations and restrictions as before . And in like 
 manner the amounts paid by individuals and the State, at the 
 several subsequent calls shall be equal, until the whole amount 
 required to complete the work is paid in; and from time to 
 time he shall take the receipts of the president and directors 
 for the several sums as paid. So soon as the president and di- 
 rectors of the Louisville, Cincinnatti and Charleston Rail Road 
 Company, shall certify to the Governor of the State, that the 
 stockholders of said company have paid in five per cent, of 
 their stock, the Governor of the State shall subscribe on be- 
 half of the State, six hundred and fifty thousand dollars in 
 stock in said company, and shall issue bonds of the State to 
 said company for five per cent, on the State stock so subscrib- 
 ed, subject nevertheless to theconditions herein after provided. 
 And as soon as the president and directors of the Louisville, 
 Cincinnatti and Charleston Rail Road Company, or a board 
 of directors appointed by said company, to construct that 
 part of the road lying within the limits of Tennessee, shall 
 
 :I 
 
 I 
 
 I* 
 
I*" 
 
 t>0 
 
 certify to the Governor that a sum has been paid in for the 
 constrHction of said road within the hmits> of Tennessee, by 
 individual stockholders upon their stock, equal in amount to 
 fifteen per cent, upon the amount to be subscribed by the State, 
 the Governor shall execute the bonds of the State to said 
 company for the amount of fifteen per cent, of (he six hundred 
 and fifty thousand dollars of stock to be subscribed by the 
 State. And whenever individual stockholders in said road 
 shall have paid in a further sum upon their stock, equal in a- 
 mount to fifteen per cent, upon the stock subscribed by the 
 State, the Governor shall issue the bonds of the State for fif- 
 teen per cent, of the remaining stock of the State: and upon 
 the further payment by individual stockholders of an amount 
 equal to five per cent. or more on stock subscribed by the State, 
 the Governor shall issue bonds for five per cent, or more of the 
 State stock, and so on in like proportion until the whole a* 
 mount is issued, all of which is to be laid out within the lim- 
 its of the State. And whenever the president and directors 
 of the Hiwassee Rail Road Company shall notify the Gover- 
 nor in writing, of the amount of stock subscribed by individ- 
 uals in said company, the Governor shall subscribe for an 
 equal amount of State stock; Providvd, such amount does not 
 exceed six hundred and fifty thousand dollars, subject to the 
 same rules as to issuing the bonds of the State as is pointed 
 out by this act for the government of other rail roads and Mc- 
 Adamized turnpike companies: Provided, that if the six 
 hundred and fifty thousand dollars should not be subscribed by 
 individuals for stock in said company, and a certificate of that 
 fact made out to the Governor on or before the first day of 
 October next, agreeably to the provisions of this act, so as to 
 authorize the Governor to subscribe for the full amount of the 
 six hundred and fifty thousand dollars in said company, the 
 Governor shall subscribe for an equal amount of stock in said 
 road, as is or shall be subscribed by individuals, and certified 
 as is directed by the 21st and 22nd sections of this act, and 
 
 21 
 
 the remainder of the six hundred and fifty thousand dollars 
 shall be subscribed by the Governor to any McAdamized, 
 sanded or graded turnpike road company in East Tennessee 
 that shall bring themselves within the provisions of this act. 
 And the Governor is hereby authorized from time to time, to 
 constitute and appoint proxies to vote for directors in said 
 Louisville, Cincinnati and Charleston Rail Road Company, 
 and such proxies shall give other votes he may be authorized to 
 do by virtue of such appointment agreeable to the provisions of 
 said charter. Jlnd provided Jurther, that if the Louisville, Cin- 
 cinnati and Charleston Rail Road Company, or the Hiwassee 
 Rail Road Company, or either of them, shall fail to obtain 
 the subscription on the part of the State on or before the first 
 day of January, 1839, then and in that case, it shall be the 
 duty of the Governor to subscribe for stock in such turnpike 
 roads in East Tennessee as may bring themselves within the 
 general provisions of this act. 
 
 Sec. 24. Be it enacted ^ That the State of Tennessee 
 shall have a lien on the entire works of said companies respec- 
 tively, for the amount so paid in by the State. And in all, the 
 profits, rents and tolls of said companies shall inure to the 
 benefit of the State, until individual slockholders shall have 
 paid in their entire stock in said companies respectively; Pro- 
 vided^ the right and lien on the part of the State to the entire 
 profits, rents and tolls of the said several works, shall not inure 
 until twelve months after the execution of the bonds of the 
 State, for the last instalment on her stock as aforesaid, and 
 then only to the extent of that portion of the individual stock- 
 holders who have not paid up the entire amount of their stock, 
 and to remain no longer than said defaulting stockholders fail 
 to pay the same. 
 
 Sec.25. Be it enacted, That the stock to be taken by the 
 State in the several improvements, shall not exceed four mil- , 
 lions of dollars, to wit: one milHon four hundred thousand dol- 
 lars in East Tennessee, one miUion six hundred thousand dol- 
 
 I 
 
 »m 
 
•>o 
 
 K> 
 
 f 
 
 lars in Middle Tennessee, and one million of dollars in the 
 Western District; Provided, that one hundred thousand dol- 
 lars shall be raised upon the bonds of the State, and be ex- 
 pended as a portion of the fund allotted to East Tennessee 
 upon the rivers in East Tennessee, as the General Assembly 
 may hereafter direct; and provided also, that one hundred 
 thousand dollars of the fund allotted to the Western District 
 of Tennessee, be expended upon the rivers in that part of the 
 State, as the General Assembly may hereafter direct; and 
 provided, that one hundred thousand dollars of the fund al- 
 lotted to Middle Tennessee shall be appropriated to the rivers 
 of Middle Tennessee. 
 
 Sec. 26. Beit enacted, That the profit arising upon the 
 stock ov^med by the State in the several works of internal im- 
 provement, shall constitute a fund to be applied to the re- 
 demption of the bonds of the State executed and to be execu- 
 ted for raising the Bank capital herein provided for, and the 
 internal improvement bonds of the State. 
 
 JOHN COCKE, 
 Speaker of the House of Representatives, 
 TERRY H. CAHAL, 
 
 _ , _ Speaker of the Senate, 
 
 Passed January 19th, 1838, 
 
 SUPPLEMENTAL BILL. 
 
 Section 1. Be it enacted by the General Assembly of 
 the State of Tennessee, That the president and directors of 
 the principal Bank shall locate the branches and appoint 
 twelve directors for each branch of the Bank of Tennessee, 
 of vs^honi one shall be from each of the counties adjoining the 
 one in which the branch is located; Provided, that it shall not 
 reduce the number in the county in which the branch is located 
 to less than seven, who shall remain in office for twelve 
 months, and until their successors are appointed and qualified 
 in the way, possess the qualifications, be subject to the dis- 
 qualifications and liabilities, and shall have the powers and per- 
 form the duties so far as the same apply, as the directors of 
 the principal Bank. And the board of directors of the branch- 
 es respectively shall be under the same rules and regulations as 
 the board of directors of the principal Bank; but the board 
 of directors of the branches may make necessary by-laws for 
 their government, not inconsistent with this act and the act to 
 which this a supplement, and not inconsistent with the con- 
 trolling power given to the principal bank over said branches; 
 vacancies in the board of directors at the branches shall be 
 filled by the boards at the branches respectively; the officers 
 and servants of the branches shall be appointed by the board 
 of directors at the branches; officers and servants of the 
 branches shall be qualified, and be subject to the same penal- 
 ties as officers and servants of the principal bank. 
 
21 
 
 Sec. 2. Be it enacted, That when the five millions of the 
 capital stock shall be paid in, (he president and directors of 
 the principal Bank shall pay over to the several branches of 
 said Bank, at least four hundred thousand dollars as the capi- 
 tal respectively of said branches; Provided, it shall be the duty 
 the president and directors of the principal Bank, to employ 
 three millions two hundred and fifty thousand dollars of the 
 capital stock at the different branches, when the whole is paid 
 in, and if upon the report of the president and directors of 
 any branch or branches, authorised to be located by this act, or 
 the act to which this is a supplement, the sum of four hundred 
 thousand dollars cannot be employed at any of such branches, 
 so as to yield, after defraying all expenses, a nett profit of 
 eight per cent, it shall in such case, be the duty of the presi- 
 dent and directors of the principal bank to withdraw so much 
 thereof as cannot be profitably used, and to transfer the same 
 to such other branch or branches where it can be used best 
 for the intest of the bank and the people, subject to be with- 
 drawn and employed and transferred to any other branch or 
 branches where the same can be used most profitably; Provi- 
 ded also, the president and directors of the principal bank shall 
 not employ more than one milhon seven hundred thousand and 
 fifty thousand dollars at the principal bank, unless it shall ap- 
 pear from the reports of the branches that the amount beyond 
 the said sum cannot be employed at a nett profit of at least 
 eight per cent, at any or all of the branches; and Provided 
 that the president and directors shall not reduce the amount of 
 capital of either of the branches to a less sum than three hun- 
 dred thousand dollars. The first distribution of capital shall 
 be made to the branches when the principal Bank shall go into 
 operation, and of the first distribution of capital derived from 
 the sale of the state bonds, at least two hundred thousand dol- 
 lars shall be paid over to each branch; and not more than sev- 
 en hundred and fifty thousand dollars shall be retained by the 
 principal bank for banking purposes. 
 
 rvx^v: 
 
 25 
 
 Sec. 3. Be it enacted, That each of said branches shall 
 make semi-annual dividends of the nett profits, which shall 
 forthwith be paid to the principal Bank, who shall provide for 
 the payment of the interest on the state bonds, and the annual 
 dividends for the support of academies and common schools, 
 as provided for by the act to which this is a supplement. 
 
 Sec 4. Be it enacted, That wbenever in the opinion of 
 the president and directors of the principal Bank, a change of 
 policy in the management of any particular branch or of the 
 whole is required for the general benefit of the institution, they 
 shall have power to call a convention of delegates from all 
 the branches, to be composed of one member from each 
 board of the branches, and the president and directors of the 
 principal Bank, to consult and advise in relation to the same, 
 and whatever may be determined upon by a majority of said 
 convention, the same shall be the governing poHcy of the in- 
 stitution. 
 
 Sec. 5. Be it enacted, That within thirty days after the 
 apointment of the directors of the different branches, it shall 
 be the duty of the president of the principal Bank to call a 
 convention of delegates from the branches to be composed of 
 the president of each of the said branches, and the president 
 and directors of the principal Bank, whose duty it shall be to 
 adopt the necessary rules for the intercourse between said 
 principal Bank and branches. The proceedings of said con- 
 vention shall be entered of record at the principal Bank by 
 ayes and noes. 
 
 Sec. 6. Be it enacted, That in all cases the funds re- 
 ceived as capital by the president and directors ol the princi- 
 pal Bank, from time to time, shall be distributed in the afore- 
 said proportions, in kind and value to the respective branches; 
 and in like manner when the principal Bank shall negotiate any 
 bonds for internal improvement purposes, the funds procured 
 shall be distributed in the same proportion in kind and value 
 to the branches, upon their placing the proper amount to the 
 
Wi'. 
 
 ^' 
 
 ;l 
 
 
 26 
 
 Bank of T 7 '^' ^'"" *' "°'«= '° be issued by the 
 
 Bank of Tennessee for circulation, shall be siened by h! 
 presulent and countersigned by the cashier of Te prbcipa 
 Bank, and the same may be made payable a. such pTe o 
 
 'et^rof t o • "It r ^'^^'^^'"^ ^^ 'he boa^ ^ 
 rectors of the pnnopal Bank. The notes of the Bank or 
 
 branches shall be received in payment of debts to he prL; 
 pal Bank or branches; Proved, that if at any time the ores- 
 -dent and directors of the principal Bank shall deem it to tie 
 mterest of the institution, they may authorise l" p e id ' 
 
 any or all of the notes to be ,ssued for circulation by such 
 Bank or branches; Provided further, that in furnishlL "he 
 branches w.th notes to be issued for circulation, the p esM « 
 and d,rectors of the principal Bank shall distribu?e to'each an 
 amount of notes equal to double the amount of capaWe aslt 
 ed to the branches respectively. . '^ ^ 
 
 Sec. 8. Be it enacted. That the bonds of the State for 
 
 ^^^ 01 sa.d Banks to be applied as provided by 
 
 -.L!Jt Slid *"•"*"''■"''■«" " "•• ■«•■ 
 
 27 
 
 protest at any of said banks; and if any such director remains 
 under protest for the space of thirty days, he shall forfeit his 
 directorship. No director shall act as attorney at law for said 
 Bank ar branches. 
 
 Sec. 11. Be it enacted, That the bonds of the State to 
 be issued under the provisions of the act to which this is a sup- 
 plement, shall be engravedunderthe direction and superintend- 
 ence af the Governor and Secretary of State; and the comp- 
 troller of the treasury is hereby required to issue his warrants 
 upon the treasury from time to time, for such an amount as 
 may be necessary to defray the expences of such engraving. 
 
 Sec. 12. Be it enacted, That the provisions of the law 
 passed at the present session of the General Assembly, au- 
 thorising the Governor to subscribe one half of the stock in 
 works of internal improvement, shall be so construed as to ap- 
 ply to M'Adamized roads, and Memphis, Somerville and La- 
 grange rail road, when part of the stock has been subscribed 
 by individuals, and the Governor has subscribed the one-third 
 of the stock so taken, but which is not sufficient to construct 
 the said roads. In such cases the Governor shall, agreeably 
 to the provisions of the act to which this is a supplement, 
 subscribe the one half of the capital stock of said companies 
 or a sum equal to the whole stock taken by individuals in said 
 roads. 
 
 Sec 13. Be it enacted, That the principal Bank of the 
 btate shall be located at Nashville. 
 
 JOHN COCKE, 
 Speaker of the House of Representatives 
 TERRY H. CAHAL, 
 
 o J T Speaker of the Senate 
 
 Passed January 25th 1837. ^^ ^^nate. 
 
If 
 
 j 1 
 
 \ 
 
 i 
 
 1 1 
 
 COLUMBIA UNIVERSITY 
 
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