734. BANKS, Private Fortunes and.—[further continued].
The flood of paper money
had produced an exaggeration of nominal
prices, and at the same time a facility of obtaining
money, which not only encouraged
speculations on fictitious capital, but seduced
those of real capital, even in private life, to
contract debts too freely. Had things continued
in the same course, these might have
been manageable; but the operations of the
United States bank for the demolition of the
State banks obliged these suddenly to call in
more than half their paper, crushed all fictitious
and doubtful capital, and reduced the
prices of property and produce suddenly to
one-third of what they had been.—
To Albert Gallatin.
Ford ed., x, 176.
(M.
Dec. 1820)
