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lic one, derives additional weight from the
fact that the preference has been inflexibly
persisted in, notwithstanding three general
bank suspensions—in 1814, 1837 and 1857—
and the bank failures which occurred at those
periods, and which have now and then occur-
red on other occasions.
This fact shows that, in the settled judg-
ment of the people of the United States,
great as have been the inconveniences and
losses sustained by them in consequence of
occasional bank failures and suspensions, this
inconvenience and these losses have not been
so great, by a good deal, as the hard-money
declaimers would make them out to be—not
so great as to induce the people to abolish
the system, or so great as even to shake their
confidence in its utility.
In regard to the extent and universality of
the injuries inflicted by bank failures, very
erroneous estimates and very incorrect state-
ments are not unfrequently made. Of the
entire population of Tennessee, for instance,
the number is small, relatively speaking, who
ever lost anything by bank failures!
Similar errors prevail in regard to the class
of persons who are the greatest sufferers by
reason of the failures of insolvent banks.
The poor laboring men, it is often said, are
the greatest sufferers. This is as great a
fallacy as ever was uttered. Are the pockets
of the laboring poor ever stuffed with bank
notes? Are they holders of bank stocks? Do
they make deposits in banks? How, then, is
it possible that they should be the greatest
sufferers from bank failures?
But it is said, that the loss of one dollar to
a poor man, being all he has, is relatively as
great as the loss of a thousand dollars is to a
man a thousand times richer. Not so. The
poor man can, by a day's work, make an-
other dollar, but the thousand dollar man
will have to labor long and industriously be-
fore he can replace the thousand dollars he
has lost.
Clearly it is upon the monied classes of
society, or those which from the nature of
their business pursuits are compelled to keep
considerable amounts of money always on
hand, and for daily or frequent use—it is up-
on these classes, which constitute but a small
portion, relatively speaking, of the commun-
ity, that the losses occasioned by the break-
ing of banks chiefly fall.
Money is too valuable to be kept long idle.
You don't find the farmers and planters, as a
general thing, keeping enough on hand ever
to be seriously injured by a bank failure. It
is the merchants and traders, and the monied
men generally, that are the chief sufferers on
these occasions.
It may with truth be asserted, that but a
small portion, compared with the whole pop-
ulation, of the people of Tennessee, have
ever sustained any loss whatever by a bank
failure—that of that small portion, the loss
to the greater part, has not been such as seri-
ously to incommode them—and that the whole
aggregate loss sustained in Tennessee, since
the first bank was chartered, by bank fail-
ures, has been, to the community generally,
insignificant, compared with the vast and in-
calculable benefits which every class of socie-
ty, farmers and planters, manufacturers and
mechanics, merchants and traders, and espe-
cially the poor laboring classes, have derived
from the paper currency, which has been in
use among them—benefits, I mean, over and
above all which a purely metallic currency
could by any possibility have conferred.
If the injuries, and I would not underrate
them, which have been sustained by the coun-
try by reason of the failures of insolvent
banks, be, as I have shown, greatly exag-
gerated by the anti-bank writers and speakers,
much more are the inconvenience and losses
which have resulted from the temporary sus-
pensions of solvent banks. Take, for illus-
tration, the late suspension by the solvent
banks of this State, particularly of the three
old banks of this place, whose issues consti-
tute the bulk of our circulating medium. A
continued drain of gold from Europe had
caused a drain thither from New York and
other importing points on the Atlantic. The
demand for gold for shipment to Europe at
New York, caused a flow of gold from the in-
terior of this country to that city. We were
in debt to New York, and the gold in the
vaults of our banks was wanted at that
period, to be sent to England and France,
from those countries to be sent to others far
away in the East. Now, suppose our banks
had had in their vaults a dollar in specie for
every paper dollar of theirs in circula-
tion, and had gone on to redeem all their
notes by paying in exchange for them all their
specie, what would have been the conse-
quence? Why, the gold thus drawn out of the
banks would not have remained in the coun-
try and taken the place, as a circulating
medium, of the bank notes that had been
previously in circulation. Instead of remain-
ing here, it would have gone out of the State,
and we should have been left literally without
any circulating medium at all—without either
gold or bank notes. And what would have
been the result of that operation? Wide-
spread ruin—the like of which the people of
this State have never seen, and which Heaven
forbid they ever should see.
By suspending, therefore, under the cir-
cumstances which existed, our banks were
enabled, by means of their notes then in cir-
culation, to prevent a great calamity, and to
preserve for the people a circulating medium,
which answered all the domestic purposes of
a medium of exchange—the purposes, that is,
of purchasing property, paying debts, &c.
Except when gold or exchange was wanted
to pay a debt out of the State, the notes of
the State, Planters', and Union banks, during
the suspension, were just as useful, just as
good, as they were before the suspension, or
since the resumption of specie payments.
Their suspension, under the circumstances,
was imperatively demanded by the best in-
terests of the people. It prevented wide-spread
ruin. The inconveniences and losses occa-
sioned by the suspension, when composed
with the disastrous results that would have
followed a refusal to suspend, are not worth a
moment's consideration.
So that, though a general suspension by
the banks of any country be confessedly a
great evil, the governments, the statesmen.
