to draw on London for L3,000,000 sterling; the difference between 5 to 6
per cent. interest and discount at 2 per cent. produced a very handsome
profit. The cotton merchants prospered as well as the exchange agent,
and Mr. Biddle paid the planters in bank notes which the Bank could
furnish without limit, while he received in Europe hard money for the
cotton; this aroused opposition.

In the second half of 1837 he established in Missouri, Arkansas,
Alabama, Georgia, and Louisiana a number of new banks, to make advances
to the planters, and to sell their products for them in Europe. They
started with very slight capital, they observed no rules in issuing
paper, their bank notes fell 30 per cent. in 1838, and the planters
would not take them.

The Bank of the United States, fearing lest foreign capitalists should
take advantage of the difficulties of the planters by buying this
cotton, cheapened on account of the encumbrances upon the district
producing it, resolved to come to the rescue of the Southern banks, and
to join them in their operations by purchasing their shares and their
long-time paper, having two years to run. It thus put $100,000,000 into
the business, and in 1838 it had loaned them upon their cotton crops not
less than $20,000,000 at 7 per cent. payable in three years.

It had bought the bank shares at 28 per cent. below par; through its help
they had risen again to par; and then it threw them upon the London
market, which absorbed them. In order to explain the immense credit
enjoyed in Europe by the United States and their banks, we must observe
that the extinguishment of the National obligations through surplus
crops threw a false light upon the credit of the States, as well as
particularly upon that of the corporation. For many years American