Crisis of 1819.

In August, 1819, 20,000 persons were seeking employment in Philadelphia, and there was a similar state of things in New York and Baltimore. Thirty trades which employed 9,672 persons in 1816, at Philadelphia, employed only 2,137 in 1819. Trades which employed 1,960 persons, at Pittsburg, in 1815, employed only 672 in 1819. The papers were filled with advertisements of sheriff's sales.

All this was used as an argument then, and has been so used since, to prove that we needed “ protection to American industry.”

The committee of the Senate of Pennsylvania, already referred to, ascribed the distress to abuses of banking, and a similar committee of the House traced it back to the expansion of banking in 1814. “ In consequence of this most destructive measure, the inclination of a large part of the people, created by past prosperity, to live by speculation and not by labor, was greatly increased. A spirit in all respects akin to gambling prevailed. A fictitious value was given to all kinds of property. Specie was driven from circulation as if by common consent, and all efforts to restore society to its natural condition were treated with undisguised contempt.”

Niles' Register, quoted by Gouge, says of the prevailing extravagance: “ The prodigality and waste of some of these [speculators] were almost beyond belief. We have heard that the furniture of a single parlor possessed (we cannot say owned) by one of these cost $40,000. So it was in all the great cities—dash—dash— dash—vendors of tape and bobbins transformed into persons of high blood, and the sons of respectable citizens converted into knaves of rank— through speculation and the facilities of the abominable paper-money system.”

Land in Pennsylvania was worth on the average, in 1809, $38 per acre; in 1815, $150; in 1819, $35. The note circulation of the country in 1812 was about 45,000,000; in 1817, 100,000,000; in 1819, 45,000,000.

The newspapers of 1819 contain numerous accounts of riots, incendiary fires, frauds, and robberies. The House committee spoke of the “ change of the moral character of many of our citizens by the presence of distress.” The distress extended to New England, but was less severe there than elsewhere. In the West it was intense. In Kentucky stay laws were passed which were distinctly unconstitutional, but, the court having so decided them, a new court was appointed which reversed the decision. Old Court and New Court became political issues. The New Court party carried the State until 1826, when the disorganization and misery occasioned by the laws led to a revulsion, and the laws were set aside. Similar laws were passed in Tennessee, Gen. Jackson vigorously opposing. The banks of the South pretended to pay specie, but Gouge quotes an eye-witness in regard to the proceedings of the Darien Bank, Georgia. One who presented a bill must make oath in the bank before a justice of the peace that the bill was his own, and that he was not an agent for any one. He must also make this oath before the cashier and five directors, and must pay $1.37½ on each bill. The United States Bank protested $500 of the bills of the Bank ol Georgia, and sold them at auction. When specie was demanded, cents were counted out at the rate of $60.00 per day.

Stagnation and distress lasted throughout 1820. Prices were at the lowest ebb and liquidation went slowly on. Wheat was at 20 cts. per bushel in Kentucky. A man in Western Virginia stopped Niles' Register because one barrel of flour used to pay a year's subscription; now three barrels would not. At Pittsburg flour was $1 per barrel, boards 20 cts. per hundred, sheep $1. Imported goods were at old prices. The banks settled down to quiet regularity. Notes were for the most part brokers' merchandise, but others circulated at a discount only equal to the cost of transporting specie from the place of issue to the place of circulation. Money was plentiful in the hands of those who had no debts to pay, where of course it must settle whenever the social machinery comes to a stand-still. They would not lend or invest, though the papers were filled with advertisements. Rent of a given house in Philadelphia fell from $1200 to $450, fuel from $12 to $5.50, flour from $10.00 to $4.50, beef from 25 cents to 8 cents per Ib. Printing was little done. School-books were a drug. Niles says that five years before, stores on Market Street were cut in two and then not enough. Dwelling-houses were in great demand. The stores were now reunited, and houses more than enough. The population of Baltimore decreased 10,000 between 1815 and 1820. Rents on Market Street were $250,000 less in 1820 than in 1815. Wages were low on half time.

In 1820 Virginia forbade notes under $5.

During 1821 the general stagnation continued. Liquidation went on slowly. Investments were only gradually taken up as confidence revived. In April of that year Kentucky notes exchanged for silver 210 for 100. Tennessee notes were at 10 per cent, discount until 1830. Comptroller's warrants were issued in Alabama, which, in order to make them more attractive, were printed on silk paper.

In June an expansion began, and by October there was a well-marked upward movement, but in the fall of 1822 there was a reaction, woollen and cotton goods falling 50 per cent. in a few weeks in December. In 1823 the circulation of the United States Bank was very low—$4,081, 842, but there was a great creation of banks, and insurance and other companies at New York. Later in the year the United States Bank received the notes of all its branches, and began to expand.