Condition of the United States Bank.

In March, 1818, the discounts of the United States Bank were forty-three millions, eleven millions on stock. The notes could not be signed fast enough. It had two millions in specie. Our knowledge of its affairs at this time is derived from the report of Mr. Cheeves, who became its president during this year, and three years afterwards delivered a report stating how he found the bank, and what he did to save it. It now had eighteen branches, but never over $3,000,000 specie in them all. Its operations in the West drew that region into the prevailing mania. Its branches paid out their own notes and held those of the State banks as far as possible. They redeemed their own notes by drafts on the East. They thus obtained the specie of those States, and the States had credits at New York for the value of the same, which they used for enlarged purchases. The West therefore now entered on the “ golden age.” There were forty-three banks in Kentucky, ten in Tennessee, and eight in Ohio in 1818.

The bank now bought seven millions bullion in the West Indies at a cost of $800,000 expenses. It was exported as fast as it was imported. In April, 1818, fifteen months after the bank started, it was doubtful whether it was solvent. Energetic measures of contraction were adopted. It was ordered that discounts be reduced by November 1st, $2,000,000 at Baltimore, $2,000,000 at Philadelphia, $700,000 at Richmond, $500,000 at Norfolk. $4,500,000 contraction was accomplished, but more was urged, as silver was yet at ten per cent. premium.

The parent bank refused the notes of its branches, and they of each other, and called on the State banks to pay balances in specie. It was proposed that the government should issue Treasury notes, and a meeting was held at Philadelphia, Mr. Carey in the chair, which appointed a committee to petition Congress to pass a law forbidding the exportation of specie. The committee refused to serve.

In November, Congress appointed a committee of investigation, which reported a resolution that a scire facias should issue for the forfeiture of the charter of the United States Bank. This was lost, forty members of Congress being stockholders. John Randolph said a man might as well go to Constantinople and preach Christianity, as to go to Congress and preach against banks.

Mr. Cheeves now became President, vice Mr. Wm. Jones. The total contraction this year was six millions, all in the North and East. The issues in the South and West were increasing.

On April 1, 1819, the state of the bank was: specie, $126,745.28; notes, $6,000,000; due other banks, $79,125.99; due government, $500,000; due Barings, $900,000. There were $267,978.09, in the mint, and $250,000 specie on the way from the West. The New York and Boston branches were in worse condition. The Baltimore branch had given $3,000,000 discounts, of which the parent bank had no knowledge, apparently from corrupt motives. $1,671,221, were lost there. The total losses to date were $3,500,000. Dividends for $4,410,000 had been paid, of which $1,348,553 had been gained by interest on public securities. Net loss over $500,-ooo. The bank now took the most energetic measures to save itself, and in seventy days was once more solvent, but it had ruined the community. The “ golden age” was now far in the past, and was seen to be only a gilt-paper age after all. The ruin was almost universal.