estate had shrunk forty millions; in two months two hundred and fifty firms had failed, and stocks had shrunk twenty millions; merchandise had fallen thirty per cent, and within a few weeks twenty thousand persons had been thrown out of employment.
Early in May three banks at Buffalo failed. On May 8, the Dry Dock Bank (New York) failed. On the tenth all the New York City banks suspended. The militia were under arms and there were fears of a riot. On the eleventh the Philadelphia banks suspended, because the New York banks had, and because, although they had plenty of specie for themselves, they had not enough for the whole "Atlantic seaboard." They said, however, that they were debtors, on balance, to New York. As the news spread through the country, the banks, with few exceptions, suspended. It was one of the notions born of the bank war that the United States Bank was guilty of oppression when it called on state banks for their balances, and the state banks had practiced "leniency" towards each other. Bank statements of the period show enormous sums as due to and from other banks. This was what carried them all down together, for one could not stand alone unless its debits and credits were with the same banks.
During the summer the governors of several states called extra sessions of the legislatures. The President had refused to recall the specie circular, or to call an extra session of Congress, but the embarrassments of the Treasury forced him to do the latter. The collection of duty bonds was deferred and the revenue thereby cut off. The public money was in the suspended banks, and the Treasury, nominally possessed of forty millions, at the very time when part of this sum was being paid to the states, had to drag along from day to day by the use of drafts on its collectors for the small sums received or by chance left over in their hands since the suspension. As notes under
