The panic caused by the capture of Washington, August 24, obliged the tottering banks of Philadelphia and Baltimore to suspend specie payments. The banks of Philadelphia formally announced their suspension, August 31, by a circular explaining the causes and necessity of their decision.[315] The banks of New York immediately followed, September 1; and thenceforward no bank between New Orleans and Albany paid its obligations except in notes. Only the banks of New England maintained specie payments, with the exception of those in least credit, which took the opportunity to pay or not pay as they pleased. The suspension was admitted to be permanent. Until the blockade should be raised and domestic produce could find a foreign market, the course of exchange was fixed, and specie payments could not be resumed. The British navy and the Boston Federalists held the country firmly bound, and peace alone could bring relief. Suspension mattered little, and had the National Bank been in existence the failure might have been an advantage to the government; but without a central authority the currency instantly fell into confusion. No medium of exchange existed outside of New England. Boston gave the specie standard, and soon the exchanges showed wide differences. New York money stood at twenty per cent discount, Philadelphia at twenty-four per cent, Baltimore at thirty per cent. Treasury notes were sold in Boston at twenty-five per cent discount, and United States six-per-cents stood at sixty in coin.[316] The Treasury had no means of transferring its bank deposits from one part of the country to another. Unless it paid its debts in Treasury notes, it was unable to pay them at all. No other money than the notes of suspended banks came into the Treasury. Even in New England, taxes, customs-duties, and loans were paid in Treasury notes, and rarely in local currency. Thus, while the government collected in the Middle and Southern States millions in bank-notes, it was obliged to leave them in deposit at the local banks where the collection was made, while its debts in Boston and New York remained unpaid. The source of revenue was destroyed. The whole South and West, and the Middle States as far north as New York, could contribute in no considerable degree to the support of government. The situation was unusual. The government might possess immense resources in one State and be totally bankrupt in another; it might levy taxes to the amount of the whole circulating medium, and yet have only its own notes available for payment of debt; it might borrow hundreds of millions and be none the better for the loan. All the private bank-notes of Pennsylvania and the Southern country were useless in New York and New England where they must chiefly be used. An attempt to transfer such deposits in any quantity would have made them quite worthless. The Treasury already admitted bankruptcy. The interest on the national obligations could not be paid.