Secretary of the Treasury, to propose to Congress in 1790 the founding
of a National Bank. After some doubts as to the power of Congress, it
was authorized. It began operations in 1794, under the title of "Bank of
the United States," with a capital of ten millions, eight millions being
subscribed by private individuals, and two millions by the Government.
Two millions of the first sum were to be paid in metallic money, and six
millions in 6 per cent. State bonds; the charter was to run till March
4, 1811. It seemed to be a good thing for the public and the
stockholders, for during twenty-one years it paid an average of 8 per
cent. dividends. In 1819 the question of renewing its privileges came
up, the situation being as follows:

ASSETS. LIABILITIES.
6 per cent. Paper $ 2,230,000 Capital Stock $10,000,000
Loans and Discounts 15,000,000 Deposits 8,500,000
Cash 10,000,000 Circulation 4,500,000


The profits from the Bank, the prosperous state of the country, and the
increase of productions led people to think that the issuing of paper
money caused it all; seduced by this alluring theory the "Farmers' Bank"
was founded in Lancaster in 1810, with a capital of $300,000. Others
followed; such was the mania that the Pennsylvania Legislature was
forced to forbid every corporation to issue notes. Despite this
preventive message the excitement rose so high that companies, formed to
build harbors and canals, also put notes into circulation; in this way
the law was eluded.

From 1782 to 1812 the capital of the banks rose to $77,258,000; upon the
1st of January, 1811, there were already eighty-eight banks in