Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1859-04-07
Writtsn for the FayettsdiHs Observer.
BANKS AND BANKING.
(Gntinued.).

r =
calcuiable losses, by the frequent
aspension Of specie payments, aud
be constant breaking Of banks.
The history Of banking in this
country, furnishes sad evidence Of
the truth of this proposition.
Who can estimate the losses oc-
casioned by the suspensions of 1887
and 1851 In the latter year, when
the country was in The most prosper
Gus condition it had been for many
years, and in a time Of profound
peace, the people were overwhelmed
with ruin, inflicted upon them by Il
universal suspension of specie pay
ments; and had it not been for the
golden food which poured in upon
US from California, the country would
not have been able to have recovered
from the dreadful blow in many
years 10 come. E
The banks themselves are not TO
blame for these commissions the
fault is not in them, but in the sys-
tenn. They are liable to suspend at
any moment; and more particularly,
when the country is in the most
prosperous condition; for then their
circulation is expanded to its utmost
limits, and the least circumstance
will cause the people to lose conf
dence in them-a panic ensues-
their depositors, who reside in the
vicinity Of the banks, rush TO theil
counters and demand the specie: and
, the banks 10 order TO save themselves
: from inevitable ruin are compelled
to suspend. This will appear evil
dent from the following consideration
:, The banks in 1857 had specie IL
, their vaults to the amount of Sos
9 millions, and owed depositors $3.50
millions, nearly four dollars to one
! Now, it must be evident, that when
ever depositors make run upor
!. them, they are bound to suspend
q for if they pay out all Of their spe
: Gle to depositors, they will have moth
ing left TO redeem their notes. Blu
banks are not only liable to be com
PEELED to suspend at any moment
but like individuals who trade on fic
titious capital, are liable to become
iDsolvent; and like individuals man,
of them do become insolvent ant
break; and the innocent note holder
throughout the country are th'
chief sufferers. The people Of Ten
nessee have abundant evidence il
their pockets that banks are liabl
to become insolyent anG break, and i
is useless TO multiply arguments up
on the subject.
9th. 1t cannot be relied upon b.
the business community.
The banks profess to be able t
supply the country with money; an
a great many people are FOOLS
enough 10 believe them: but Cal
. they always be relied upon TO furnis
the amount needed by the bushes
community? Let US suppose case
j, a merchant commences business i
. prosperous times, and money bein
II plenty, be purchases an extensiv
9 stock Of goods, which he bring
among Us and sells on a credit
The banks, about the time be ez
!. poets to get bis money for the good
T which be has sold, to pay his East
g ern creditors, stop accommodation
], and contract their circulation. Thor
G who have expected to get none,
from the banks, have failed to do Sc
1.-THE merchant, therefore, cannot max
collections, and his high expectation
9 are blasted. But such could moi
1 be the case under a gold an
silver currency, because the amour
. in circulation would always be uni
form; for the causes which compe
the banks to stop their loans coul,
never affect individual lenders. In
4 l., .rl.G 49,, L..