Distress of 1834.

The recharter of the bank being now definitely refused, a number of small banks were organized to take its place. But before they could get into operation the contraction of the bank had time to operate upon the market. Many deputations came up to Congress to complain of distress, and many memorials were sent up. The excitement was great throughout the country. It was asserted, however, on the other side, that all this distress was manufactured by the bank interest, in order to gain a recharter, and that loans were refused to some and granted freely to others, who used them to charge usurious. rates. Benton asserts that two cases were discovered, one in which a broker received $1,100,000 to use in this way, for which he charged 2½ per cent, per month. Prices did fall very slightly in 1834 as compared with 1833, taking them over 80 articles, but some advanced, and the fall on none was great.

The aggregate amount of loans and of circulation in the country increased steadily all these years. I have not been able to find any statement of the loans of 1833, but the circulation, even of the United States Bank, was not contracted in 1834, and, taking the whole number of banks, there was an increase. The business of the country was increasing quite as rapidly, and it is impossible to ascribe the fluctuations of prices to the sole action of the currency. The fears, real or manufactured, of a crisis on the winding up of the national bank, account for the decline which took place.