Page:Forgotten Man and Other Essays.djvu/391

Rh The arrival in June of a ship in England with one hundred thousand dollars specie sufficed to sustain American credit and to revive American securities. When the credit of a debtor is tainted, nothing revives it like payment.

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