was only made up by the fortunate
receipt of the French remittances. In 1808 the specie in the vaults of
the treasury reached fourteen millions of dollars, but during the
operation of the Embargo Act, the banks of New England had gradually
accumulated a specie reserve, and that of Richmond, Virginia, pursued
the same policy. Together they held one third of the entire specie
reserve of the banks. The amount of specie in the Bank of the United
States, January 1, 1811, had fallen to $5,800,000, which soon found its
way abroad.

The notes of the Bank of the United States, payable on demand in gold
and silver at the counters of the bank, or any of its branches, were,
by its charter, receivable in all payments to the United States; but
this quality was also stripped from them on March 19, 1812, by a repeal
of the act according it. To these disturbances of the financial
equilibrium of the country was added the necessary withdrawal of fifteen
millions of bank credit and its transfer to other institutions. This
gave an extraordinary impulse to the establishment of local banks, each
eager for a share of the profits. The capital of the country, instead of
being concentrated, was dissipated. Between January 1, 1811, and 1815,
one hundred and twenty new banks were chartered, and forty millions of
dollars were added to the banking capital. To realize profits, the
issues of paper were pushed to the extreme of possible circulation.
Meanwhile New England kept aloof from the nation. The specie in the
vaults of the banks of Massachusetts rose from $1,706,000 on June 1,
1811, to $7,326,000 on June 1, 1814. This was a consequence of the New
England policy of opposition. Mr. Gallatin estimated that the proceeds
of loans, exclusive of treasury notes and temporary loans, paid into the
treasury from the commencement of the war to the end of the year 1814
were $41,010,000: of which sum the Eastern States lent $2,900,000; the
Middle States, $35,790,000; Southwestern States, $2,320,000.

The floating debt of the United States, consisting of treasury notes
and temporary loans unpaid, amounted, January 1, 1815, to $11,250,000,
of which nearly four fifths were loaned by the cities of New York,
Philadelphia, and Baltimore, and the District of Columbia. The
suspension of the banks was precipitated by the capture of Washington.
It began in Baltimore, which was threatened by the British, and was at
once followed in Philadelphia and New York. Before the