The extra session of Congress met on September 4. The fourth installment of the State Deposit Fund was postponed until January 1, 1839, but it was locked up in the suspended banks and, as the former installments had been drawn from the better banks, the balance due was all in the worst banks of the country, those of the southwestern states. As they had loaned it to their customers, it was, in fact, amongst the people of those states. A law was passed to institute suit against these banks unless they paid on demand, or gave bonds to do so in three installments before July 1, 1839. There were only six deposit banks then paying specie; one was new, four had not suspended, and one had resumed. Power to call on the states for the funds “deposited” with them was taken from the Secretary of the Treasury and held by Congress. Interest-bearing Treasury notes were provided for one year, to meet expenses, and an extension of nine months was given on duty bonds. At this session the sub-treasury system was brought forward as an administration measure. It split the party. The “bank democrats” (state bank interest which joined the Jackson party in 1832 to break down the United States Bank) went into opposition. The advocates of the “credit system” said the sub-treasury scheme, by giving the government control of the specie in the country, would give it control of all credit. Meanwhile Benton said that the eighty million specie in the country was its bulwark against adversity, and the Locofocos said that any one who exported specie was a British hireling. So that there was a fine confusion of financial notions. In the fall the English money market became much easier, and the same tendency appeared here. Specie at New York was at about seven per cent premium, but steadily declining. Prices of breadstuffs remained very high (flour nine dollars to nine dollars and a half at New York) and the stagnation of industry was complete. Migration to the West was large. On August 18 the New York banks called a convention of banks to deliberate on resumption. The Philadelphia banks frustrated the proposition by refusing. A convention met in October but adjourned without action until April. On the 7th of April the New York banks had assets two and a half times their liabilities, excluding real estate, and were creditors of the Philadelphia banks for $1,200,000. They had reduced their liabilities from $25,400,000 on January 1, 1837 to $12,900,000 on January 1, 1838, and the foreign exchanges were favorable.