Farmers & Mechanics Bank

Bank Information

Episode Type: Suspension → Reopening
Bank Type: state
Start Date: January 1, 1823*
Location: Nashville, Tennessee (36.166, -86.784)

Metadata

Model: gpt-5-mini
Short Digest: 96b32eb4

Response Measures

None

Description

Article is a historical overview of Tennessee banking crises. It states that in 1823 the notes of the Farmers' and Mechanics' Bank (Nashville) were worth only 25 cents on the dollar, implying suspension of specie payments / heavy distress during the statewide banking collapse. The article does not describe a depositor run, receivership, or permanent closure for this specific bank. Because the text documents a suspension/acute distress in 1823 but gives no clear evidence of permanent failure, I classify this as a suspension with later resumption (suspension_reopening) conservatively. Date is given as 1823 in the article.

Events (1)

1. January 1, 1823* Suspension

Cause: Macro News
Cause Details: Part of a statewide crisis from excessive state banking and suspension of specie payments across Tennessee (general monetary crisis following 1819-1821).
Newspaper Excerpt: In 1823 the notes of the Fayetteville Bank, and the Farmers' and Mechanics' Bank, at Nashville, were worth only 25 cents in the dollar!
Source: newspapers

Newspaper Articles (1)

1. March 21, 1860 Nashville Union and American Nashville, TN

Article from Nashville Union and American, March 21, 1860

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Article Text

$5,800,000 Fifteen Banks with raised, and the Banks authorized to issue ten millions of dollars in paper for a population of three hundred thousand souls! In 1819 the whole of them that had gone into operation suspended specie payment, with the exception of the Knoxville Bank, of which Judge White was the President. The history of this monetary crisis, although the State was flooded with paper money, shows from public documents, that the notes of those suspended Banks were at a discount of from 30 to 40 per cent; and gold and silver were at 30 per cent premium. Bankruptcy, ruin, and general distress pervaded the whole State, and Gov. McMinn in his message recommended, in order to relieve the distress on the country,-first, The staying of judgaients for two years; orto compeli creditors to take Bank notes. Second, A general redemption law. Third, The exemption of certain property from execution-and lastly, he recommended & valuation law. In 1820, he said that general distress still pervaded the country and was marked with permanence. In 1821, Governor Carroll, in his message to the Legislature, protested and advised against State Banking, and exposed the ruinous policy of the State engaging in the business of banking. To relieve all this distress of 1820, produced by excessive State banking, the Legislature chartered the old Bank of Tennessee with n capital of one million, ($1,000,000,) a branch at Knoxville and a loan agency in each county in the State. Now commenced a splendi and popular scheme of State Banking to relieve the people from the injuries of injudicious banking, and the excessive issues of paper money. Take the period from 1816 to 1826, during this system of State banking, and you will find that "shinplasters" reigned the whole time, and some of these swindling machines cold their gold and silver at a premium of 30 per cent., while their own notes were at 40 per cent. discount! In 1823 the notes of the Fayetteville Bank, and the Farmers' and Mechanics' Bank, at Nashville, were worth only 25 cents in the dollar! In 1829 Gov. Carroll warned the Legislature against the policy of State banking and protested against employing the funds of the State in bank ing. He recommended ar investigation of the Bank. Everything looked well The accounts all balanced -the Bank's liabilities were put down at $1,070,849 841, and its assets the same, $1,070,849 841-311 looked well. The investigation was perfected, and in 1833, when the Bank was wound up, the actual loss to the State stood, as reported by the investiga- gating committee, $252,784 85}--onesingle individual being himself & defaulter to the amount of $49,338 06. The whole of these facts and figures are copied from the public records, and can be found on file in f the State Capitol. The Union and Planters' Banks are stock Banks. They were chartered in 1832. The Sate had stock in botb of these Banks, from which it derived good dividends Twoyeursago the stock was handed over to the State Bank, and will be examined after awhile. In 1837-88 the Legislature chartered the Bank of Tennesses, providing that its capital should be $5,000,000. This amount, however, wasnever procured for the Bank, and the first report made to the General Assembly in 1839, shows & capital of $2,148,706. This amount has been added to from time to time, as I will explain in the sequel, until the capital ought now,to be over $4,000,000. The capital, is October, 1847, made up of one million of State Bonds, the surplus revenue and School funds, amounts as by report to $8,191,215. The operations of the Bank-its liabilities and means, after about ten years of existence, may be seen from the following analysis of the report made up to October, 1847, and to this analysis I direct the attention of the Senate and invite the closest scrutiny: Condition of the Bank of Tenneessee from Report of the President, made upto 1st of July, 1847.