The discount line of the Bank of the United States was thus greatly
increased; it grew from $3,000,000 on the 27th of February to
$20,000,000 on the 30th of April; to $25,000,000 on July 29th, and to
$33,000,000 on the 31st of October. The Bank imported much metallic
money, redeemed its notes and those of its branches without distinction;
the notes of its Eastern and Southern branches were returned as soon as
those of the North had paid them, and they were newly issued;
consequently eighteen months after this practice began the cash boxes of
the North were drained of their capital, the length of discount was
reduced, and 5 per cent. was charged for sixty days. On April 1, 1819,
only $126,000, cash remained on hand, on the 12th only $7l,000,
remained, $196,000, was owed to the city banks.
Scarcely had the Directors of the National Bank succeeded in replacing
the paper issued but not redeemed by their bank-note circulation, being
fully aware from their own experience that the circulation could only
reach a limited amount, than they inundated the market with it, and in a
few months all reductions vanished. In this way the market price shortly
resumed its former quotation, and all the difficulties reappeared.
Pages:
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69