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The Union Bank and the Brokers. For the Patriot. It appears from an article in the Knoxville Mercury of a recent date, that citizens of Knoxville are very seriously alarmed, because Memphis Brokers, as they allege, have had the audacity to present at the counter of the branch of the Union Bank at that place, her promises to pay and to demand, as they had the legal and moral right to do, specie for them. Even two grave Judges, McKinney, of the Supreme Bench, and Jones, of what bench your correspondent knows not, and cares less, partook 80 largely of the panic, that they participated in a meeting of the aforesaid citizens called for the purpose of doing something-it does not appear exactly what-to restrain the brokers. It is probably true, as was stated at the meeting, that some $400,000 in specie have been drawn from the vaults of the Union Bank at Knoxville. If so, it was the inevitable result of the policy which the Union Bank has been pursuing. Let us examine a little into the facts of the case: It appears that the Union Bank has either been unable or unwilling to redeem her notes at Memphis, where they are paid out, in exchange as the Planters' Bank, and others have always done, and are still doing, and thatthe brokers, with their small capitals, have been unable to furnish exchange for all the Union Bank notes they receive and then hold these notes until it might suit the convenience or caprice of the Bank to refund the exchange-bence, they have been compelied, in self defence, to draw and ship coin. Now, what is the reason the Union Bank cannot pay herjust debta as other Banks are doing? The true reason can be told in a few words : This Bank has been the largest buyer of cotton bills at Memphis this season, running the circulation up to nearly three millions of dollars. When these cotton bills matured in New Orleans, instead of ordering sight-funds to New York and furnishing her portion of the New York exchange required by the wants of the community, as the Planters' and State Banks have done, the Union Bank (it is. understood) has invested, and now holds three millions of dollars of seventy day bills, drawn at New Orleans on New York, which were bought at 21 to 3 per cent. discount, thus loaning three millions of dollars to parties out of the State and leaving the circulation to take care of itself. Is it very strange then that she cannot discount a note at Knoxville for $500 at sixty days, when she is getting the rate of 18 to 25 per cent. for money at New Orleaus Or is it at all strange that the Memphis Brokers refuse to hold up Union Bank notes, and wait for the Bank to get ready, to pay them when money appears to be so valuable? From this it will be seen that the Union Bank has Invested all her capital, and nearly thirteen hundred thousand dollars besides, in long bills at New Orleans on New York, (loaning nearly double the amount of her capital out of the State) and then cannot discount for her suffering customers at home. Why ? because the Brokers are drawing her coin ! Is this not supremely ridiculous? The last Legislature passed an act requiring all the Banks to make their notes payable at the point where they business; or in other words, that the circulation of any branch bank should not exceed its discounts more than two thousand dollars The Union Bank must have outat least a million and a-balf of notes payable at Knoxville and probably more. Let Judge McKinney, who presided at the Knoxville meeting, examine and seeif the Knoxville Branch has a line of discounts amounting to within $2000 of thesum; and if she has not, require the Bank to comply with the law. I think that if this law was enforced the people of Knoxville would have very extensive Bank accommodations, at any rate they would not be troubled with Memphis Brokers. The citizens of Knoxville instead of hurling anathemas at the brokers, would subserve their own and the interests of the State better if they would place the blame at the proper door, and endeavor to effecta change in the policy of the Union Bank-a policy which seeks to build up the Instition and to feather the nests of the stockholders, but cares little about accommodating the business men of Tennessee.
