Under the National Banking System:

A. There were frequent widespread suspensions of 'National Banks' bank note liabilities but not of their deposit liabilities.
B. There were frequent widespread suspensions of 'National Banks' deposit liabilities, but not of their banknote liabilities.
C. There were frequent widespread suspensions of both 'National Banks' bank note and deposit liabilities.
D. Suspensions of any of 'National Banks' liabilities were very rare and isolated.
E. National Banks had no bank note liabilities, but their deposit liabilities underwent frequent widespread suspensions.

The correct answer is D: suspensions of any of 'National Banks' liabilities were very rare and isolated. The banking system after the War of 1812 was designed with measures to provide security and prevent collapse, including regulations on the issuance of money and deposit insurance from the FDIC.

Explanation:

Answering your question about the National Banking system, the most accurate option is D - suspensions of any of 'National Banks' liabilities were very rare and isolated. Under this banking system, established after the War of 1812, both banknote and deposit liabilities were generally secure, barring extraordinary circumstances like bank runs triggered by widespread panic. The system indeed had potential issues, as banks often issued paper money exceeding the amount of specie (gold or silver) they possessed, leading to potential instability if large quantities of people demanded specie back for their paper money.

However, the system was designed to provide a level of security to prevent total collapse. The Federal government, acting through institutions like the newly proposed central bank, sought to manage and regulate the banking sector, particularly focusing on the prudent issuance of money. The enactment of deposit insurance by the Federal Deposit Insurance Corporation (FDIC) further emphasized this attempt to provide financial security. This insurance system assured that depositors would not lose their money even if the bank goes bankrupt.

While the money and banking system did carry risks and potential dangers, such as problems that could arise if banks were not functioning well or were under financial stress, widespread suspensions of both 'National Banks' bank note and deposit liabilities was a rare occurrence.

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