Every one wished to speculate, and every one eagerly ran up
debts. Such was the abundance of paper money that the banks were alarmed
lest they could not always find an investment for what they
manufactured. It thus happened that it was proposed to lend money on
collateral, while the greatest efforts to bring about its redemption
were being made. This state of things lasted till the end of 1815, when
it was recognized that the paper circulation had not enriched the
community, but that metallic money had enhanced.
The intelligent portion of the nation comprehended that even where the
estimated value of property had been highest, the true welfare of
society had diminished. They learned too late the baleful effects of
this circulation of paper money; the greater part of the States and
cities had nothing to show for it.
A new class of speculators then appeared, trying to pass these worthless
bank notes: forgers of paper money became more active. In the midst of
this disorder a National Bank, which should afford a solid basis for the
paper circulation, was considered. Influenced by these difficulties, and
in hopes of remedying them, the Secretary of the Treasury proposed to
Congress, in September, 1814, a few days after suspension, to found a
national bank, in order to re-establish metallic circulation, an end
which the State banks had failed to accomplish.
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