The expenses of the war declared against
Great Britain in June, 1812, were defrayed by notes issued by the banks
of the various States. Six million dollars were obtained from them in
1812, in the following year, 1813, twenty million, and then fifteen
million in exchange for twelve million of Federal stock, issued at the
price of $125 face for every $100 paid in. Until January 1, 1814, in
order to avoid taxation, Treasury bonds were issued in addition to what
was contributed by the banks.
In 1812 ..................... $3,000,000
" 1813 ..................... 6,000,000
" 1814 ..................... 8,000,000
Up to this time no account of their administration had been rendered,
but now Mr. Bland, a Maryland representative, called attention to the
fact that all their operations seemed veiled from the public.
Unfortunately we have been unable to find a statement of the discounts.
The suspension of specie payments differed with the corresponding state
of affairs in England, inasmuch as it was not general, and, since each
State was independent, the depreciation varied. It became very difficult
to circulate paper, and the Government was again obliged to issue
Treasury bonds, bearing 6 per cent.
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