actual condition of those who have been supported by the credit of others; but whose insolvent or tottering situation, known to the Bank, has been concealed from the public at large."
March 19, 1812, the receivability of the notes of the Bank for dues to the United States was repealed, the Circuit Court of Virginia having just before decided that those notes were still everywhere a good tender for duties.[1]
As soon as the re-charter was definitely defeated, the Bank applied to the Legislature of Pennsylvania for a charter, to retain all its capital, and to be allowed to do business in such States as might permit it. The application was defeated, but renewed the next year, with an offer to subscribe $500,000 to public works, and to lend the State, at any time during the charter period, the same sum at five per cent.[2]
Charles Biddie, who was then in the State Senate, thought that it would be a great advantage to the State. His son, Nicholas, was in the State House of Representatives, and made a speech in favor of it. The objection which weighed most was that the stock was owned by foreigners.[3]
Between March 1st and September 1st, the Bank paid the public and private deposits, and redeemed $3.5 millions worth of bank notes—in all $9.2 millions, and its specie fell only $335,175. In the first year of liquidation it paid $11.6 millions, and the specie stock increased $1.2 millions.[4] Gallatin said that the public deposits were removed within a week before the expiration of the charter, and no harm was done.[5] He takes no note of the fact that the Bank was a creditor of the Treasury for a sum about equal to the government deposit. In his report on the selected banks, January 8, 1812, he stated that the public deposits were gradually withdrawn and that the account of the Treasury with the Bank was closed, September 2, 1811, except that $70,000 were still at the credit of the disbursing officers at New Orleans. The credits of the disbursing officers always cause ambiguity as to the public deposits. During the existence of this Bank the public deposits were not placed in it exclusively even on the Atlantic coast. The principal disbursing officers were directed by law, in 1809, to keep the public money in their hands, whenever possible, in some incorporated bank to be designated by the President. A treasury report of January 9, 1811, shows that one-third of the public deposits were, at that time, in eleven State banks, of which only three were west of the Alleghanies.
As soon as it was certain that the Bank would not be re-chartered, local banks were selected at the chief ports of entry, in which the collectors were ordered to place the duty bonds for collection. The only condition imposed on the selected banks was, that they should give a preference in discounts to persons who had duty bonds to pay. Within a year, the cash balance in the Treasury was divided in deposits between twenty-one banks.[6] As to the currency receivable for dues to the Treasury, the law of 1789, modified by
