Others
followed; such was the mania that the Pennsylvania Legislature was
forced to forbid every corporation to issue notes. Despite this
preventive message the excitement rose so high that companies, formed to
build harbors and canals, also put notes into circulation; in this way
the law was eluded.
From 1782 to 1812 the capital of the banks rose to $77,258,000; upon the
1st of January, 1811, there were already eighty-eight banks in
existence. Until the declaration of war (June, 1812), the issuing of
notes was always made with the intention of redeeming them, but the
over-issue soon became general, and depreciation followed. The
periodical demands for dollar-pieces for the East Indian and Chinese
trade were warnings of the over-speculations on the part of those
companies whose members were not personally liable. Traders, who through
their notes or their deposits had a right to credit with the banks, did
not hesitate to ask for $100,000, whereas, formerly they would have
hesitated to ask for $1,000. The war put a stop to the exportation of
precious metals, which, in the ordinary course of things, limits the
issue and circulation of paper.
Pages:
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55