This is certainly a melancholy story of the way in which people who enjoy the most exceptional chances of wealth and prosperity can squander them by ignorance of political economy and recklessness in political management. Banks were regarded as means of borrowing capital, not as institutions for lending it. If there was anywhere a group of needy speculators, they secured a bank charter, elected themselves directors, gave their notes for the stock, printed a lot of bank notes, loaned the notes to themselves, and went out and with the notes bought the capital they wanted. Bank after bank failed with an immense circulation afloat and no assets but the notes of its directors, who had failed too. When the United States had thirty or forty millions surplus on hand and these banks could get the custody and handling of it for an indefinite period, because the country had no need for it, it can readily be understood why banks multiplied. The banks were encouraged to lend this deposit freely to the public, which they were by no means loath to do, for that was the only way to gain a profit on it. They lent it, not once but two or three times over. The New York bank commissioners pointed out the danger of a system in which the borrower came directly into contact with the bank which issued the currency. If a man was eager to borrow and pay high interest and the bank had only to print the notes to accommodate him, there was every stimulus to over-issue. If the borrower engaged in any enterprise he raised the price of everything he bought. When he became engaged in his enterprise and wanted more capital, he went back to the bank more eager and more ready to pay high interest than ever, and the operation was repeated. In 1836, on the top of the inflation, the rates for money were twelve and fifteen per cent throughout the year, with a very tight money market. The banks and the business community could not throw the blame on each other. They stimulated each other and went on in their folly hand in hand. The penalties, however, were not fairly distributed. The banks “suspended,” as they called it; that is, when asked to pay their debts, they said they would not; and they enjoyed a complete immunity in this respect, while people outside who could not pay had to fail. I have tried, within the limits to which I am bound, to show how many elements were combined in this period and how they were all interwoven. There are the political elements, the tariff element, the movement of population to the new land, the fiscal operations of the general government, the revolution in the coinage, the mania for public improvements, the reckless creation of state debts, and the war on the United States Bank. Any one of these might have accounted for a financial crisis in an old country, and the fact that the catastrophe produced by all combined was not greater here is a striking proof of the vitality of the country and the wonderful advantages which it was wasting.