In such fashion was the country hastened toward the period of bankruptcy. Yet the people in general still continued to demand more "money." The worse the curse, the greater the floods of it called for by the body of the public. "Like a dropsical man calling out for water, water, our deluded citizens are clamoring for more banks.... We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth," wrote Jefferson when the financial madness was becoming too apparent to all thoughtful men.[495]
Practically no restrictions were placed upon these financial freebooters,[496] while such flimsy regulations as their charters provided were disregarded at will.[497] There was practically no publicity as to the management and condition of even the best of these banks;[498] most of them denied the right of any authority to inquire into their affairs and scorned to furnish information as to their assets or methods.[499] For years the Legislatures of many States were controlled by these institutions; bank charters were secured by the worst methods of legislative manipulation; lobbyists thronged the State Capitols when the General Assemblies were in session; few, if any, lawmaking bodies of the States were without officers, directors, or agents of local banks among their membership.[500]
Thus bank charters were granted by wholesale and they were often little better than permits to plunder the public. During the session of the Virginia Legislature of 1816-17, twenty-two applications for bank charters were made.[501] At nearly the same time twenty-one banks were chartered in the newly admitted and thinly peopled State of Ohio.[502] The following year forty-three new banks were authorized in Kentucky.[503] In December, 1818, James Flint found in Kentucky, Ohio, and Tennessee a "vast host of fabricators, and venders of base money."[504] All sorts of "companies" went into the banking business. Bridge companies, turnpike companies, manufacturing companies, mercantile companies, were authorized to issue their bills, and this flood of paper became the "money" of the people; even towns and villages emitted "currency" in the form of municipal notes. The City of Richmond, Virginia, in 1815, issued "small paper bills for change, to the amount of $29,948."[505] Often bills were put in circulation of denominations as low as six and one fourth cents.[506] Rapidly the property of the people became encumbered to secure their indebtedness to the banks.
A careful and accurate Scotch traveler thus describes their methods: "By lending, and otherwise emitting their engravings, they have contrived to mortgage and buy much of the property of their neighbours, and to appropriate to themselves the labour of less moneyed citizens.... Bankers gave in exchange for their paper, that of other banks, equally good with their own.... The holder of the paper may comply in the barter, or keep the notes ...; but he finds it too late to be delivered from the snare. The people committed the lapsus, when they accepted of the gew-gaws clean from the press.... The deluded multitude have been basely duped."[507] Yet, says Flint, "every one is afraid of bursting the bubble."[508]
As settlers penetrated the Ohio and Indiana forests and spread over the Illinois prairies, the banks went with them and "levied their contributions on the first stroke of the axe."[509] Kentucky was comparatively well settled and furnished many emigrants to the newer regions north of the Ohio River. Rough log cabins were the abodes of nearly all of the people[510] who, for the most part, lived roughly,[511] drank heavily,[512] were poorly educated.[513] They were, however, hospitable, generous, and brave; but most of them preferred to speculate rather than to work.[514] Illness was general, sound health rare.[515] "I hate the prairies.... I would not have any of them of a gift, if I must be compelled to live on them," avowed an English emigrant.[516]
In short, the settlers reproduced most of the features of the same movement in the preceding generation.[517] There was the same squalor, suspicion, credulity, and the same combativeness,[518] the same assertion of superiority over every other people on earth,[519] the same impatience of control, particularly from a source so remote as the National Government.[520] "The people speak and seem as if they were without a government, and name it only as a bugbear," wrote William Faux.[521]
Moreover, the inhabitants of one section knew little or nothing of what those in another were doing. "We are as ignorant of the temper prevailing in the Eastern States as the people of New Holland can be," testifies John Randolph in 1812.[522] Even a generation after Randolph made this statement, Frederick Marryat records that "the United States ... comprehend an immense extent of territory, with a population running from a state of refinement down to one of positive barbarism.... The inhabitants of the cities ... know as little of what is passing in Arkansas and Alabama as a cockney does of the manners and customs of ... the Isle of Man."[523] Communities were still almost as segregated as were those of a half-century earlier.[524] Marryat observes, a few years later, that "to write upon America as a nation would be absurd, for nation ... it is not."[525] Again, he notes in his journal that "the mass of the citizens of the United States have ... a very great dislike to all law except ... the decision of the majority."[526]
These qualities furnished rich soil for cultivation by demagogues, and small was the husbandry required to produce a sturdy and bellicose sentiment of Localism. Although the bills of the Bank of the United States were sought for,[527] the hostility to that National institution was increased rather than diminished by the superiority of its notes over those of the local money mills. No town was too small for a bank. The fact that specie payments were not exacted "indicated every village in the United States, where there was a 'church, a tavern and a blacksmith's shop,' as a suitable site for a bank, and justified any persons in establishing one who could raise enough to pay the paper maker and engraver."[528]
Not only did these chartered manufactories of currency multiply, but private banks sprang up and did business without any restraint whatever. Niles was entirely within the truth when he declared that nothing more was necessary to start a banking business than plates, presses, and paper.[529] Often the notes of the banks, private or incorporated, circulated only in the region where they were issued.[530] In 1818 the "currency" of the local banks of Cincinnati was "mere waste paper ... out of the city."[531] The people had to take this local "money" or go without any medium of exchange. When the notes of distant banks were to be had, the people did not know the value of them. "Notes current in one part, are either refused, or taken at a large discount, in another," wrote Flint in 1818.[532]
In the cities firms dealing with bank bills printed lists of them with the market values, which changed from day to day.[533] Sometimes the county courts fixed rates of exchange; for instance, the County Court of Norfolk County, Virginia, in March, 1816, decreed that the notes of the Bank of Virginia and the Bank of South Carolina were worth their face value, while the bills of Baltimore and Philadelphia and the District of Columbia were below par.[534] Merchants had to keep lists on which was estimated the value of bank bills and to take chances on the constant fluctuations of them.[535] "Of upwards of a hundred banks that lately figured in Indiana, Ohio, Kentucky, and Tennessee, the money of two is now only received in the land-office, in payment for public lands," testifies Flint, writing from Jeffersonville, Indiana, in March, 1820. "Discount," he adds, "varies from thirty to one hundred per cent."[536] By September, 1818, two thirds of the bank bills sent to Niles in payment for the Register could not "be passed for money."[537]