bank notes: forgers of paper money became more active. In the midst of
this disorder a National Bank, which should afford a solid basis for the
paper circulation, was considered. Influenced by these difficulties, and
in hopes of remedying them, the Secretary of the Treasury proposed to
Congress, in September, 1814, a few days after suspension, to found a
national bank, in order to re-establish metallic circulation, an end
which the State banks had failed to accomplish.

This project, which lent the national credit to the capital of the bank,
was antagonized by a good many members who exaggerated its consequences;
at the same time that they took more or less important sums in bank
notes, or borrowed from the banks upon the nation's guaranty, in order
to re-establish the public credit and to obtain means for prolonging the
war.

CAUSES OF THE PANIC OF 18l4.--The bank directors laid the blame upon the
blockade of the ports, which, interfering with, indeed even preventing,
the export of products, occasioned the outflow of the metals. The
national loans to carry on the war also had their influence. From the
beginning of hostilities until 1814 they increased to $52,848,000,
distributed as follows: Eastern States, $13,920,000; New York,
Pennsylvania, Maryland, and District of Columbia, $27,792,000; Southern
and Western States, $11,186,000.

Nearly all of this was advanced by the cities of New York, Philadelphia,
and Baltimore. The banks made advances beyond their resources,
augmenting their circulation in consequence. [Footnote: The cause of the
crisis, according to the Committee of the Senate, was the abuse of the
banking system; the great number and bad administration of the banks;
and their speculations designed to advance their stock, and to