In 1820 the United States had a population of about nine and one- half millions; in 1830, nearly thirteen millions. It was spread out from east to west like a page in the history of society. On the Atlantic seaboard were the centers of American civilization that had grown up in colonial days in close touch with Europe. From this region of commerce and manufacture, the nation, on its march towards the west, changed through successive types of industrial life until in the Rocky Mountains the frontier fur-trader mingled with the Indians. The successive stages of social evolution which at first were exhibited in narrow belts on the Atlantic coast had now spread nearly across the continent. [Footnote: Turner, "Significance of the Frontier," in Am. Hist. Assoc., Report 1893, pp. 200, 206, 208.]

Not only was the country vast in extent, it was rapidly growing. In the decade the nation increased its population by over three million and a quarter inhabitants, an addition which nearly equaled the whole population of any one of the three great sections, the middle states, the south, and the west. As traveler after traveler passed over the routes of his predecessor in this period, reporting the life by the wayside and in the towns, we can almost see American society unfolding with startling rapidity under our gaze; farms become hamlets, hamlets grow into prosperous cities; the Indian and the forests recede; new stretches of wilderness come into view in the farther west, and we see the irresistible tide of settlement flowing towards the solitudes.

Nevertheless, at the opening of our survey the nation was in the gloom of the panic of 1819. This was brought on by the speculative reaction that immediately followed the war, when the long-pent-up crops of cotton found a market at the extraordinary price of nearly thirty cents a pound, and as high as seventy-eight dollars per acre was bid for government land in the offices of the southwest. [Footnote: Annals of Cong., 16 Cong., I Sess., 446.] The policy of the government fostered reckless purchases of public land. In the critical times of the closing years of the war, the treasury agreed to accept the notes of state banks in payment for lands, on condition that these banks should resume specie payment; and then the banks, while taking only nominal steps towards resumption, loaned their paper freely to the settlers and speculators who wished to invest in the public domain.

Under the credit system already mentioned, the pioneer was tempted to exhaust his funds in making his first partial payment, and to rely upon loans from some "wild cat" bank wherewith to complete the purchase of the hundred and sixty acres, the smallest tract offered under the terms of the law; planters, relying equally on the state banks, bought great tracts of land at absurd prices; speculators, tempted by the rapid rise in land values and by the ease of securing loans, purchased large quantities in the hope of selling before it became necessary to complete their payment. On the seaboard, extravagance abounded as a reaction from the economies of war times, imported manufactures found a ready market, and the domestic factories were in distress.

While state banks greatly multiplied and expanded their circulation freely to meet the demands of borrowers, [Footnote: Stunner, Hist, of Banking, I., chaps, iv.-vi.] the United States Bank not only failed to check the movement, but even contributed to it. After a dance of speculation, the bank, in the summer of 1818, was facing ruin, and it took drastic means to save itself. Its measures compelled the state banks to redeem their notes in specie or close their doors. [Footnote: Catterall, Second Bank, chap. iii.; Dewey, Financial Hist, of the U. S., chap, vii.; Babcock, Am. Nationality (Am. Nation. XIII.), chap. xiii.]

By the spring of 1819 the country was in the throes of a panic. State-bank issues were reduced from one hundred million dollars in 1817 to forty-five millions in 1819. Few banks in the south and west were able to redeem their notes in specie before 1822; but they pressed their debtors harshly. Staple productions fell to less than half of their former price; land values declined fifty to seventy per cent.; manufacturers were in distress; laborers were out of work; merchants were ruined. [Footnote: J. Q. Adams, Memoirs, IV., 375; Jefferson, Writings, X., 257; Benton, View, I., 5; Niles' Register, XVI., 114; Hodgson, Travels, II., 128; Sumner, Hist, of Banking, I., chaps, vii., viii.] The conditions are illustrated in the case of Cincinnati. By the foreclosure of mortgages, the national bank came to own a large part of the city-hotels, coffee- houses, warehouses, stables, iron foundries, residences, and vacant lots. "All the flourishing cities of the West," cried Benton, "are mortgaged to this money power. They may be devoured by it at any moment. They are in the jaws of the monster!" Throughout the south and west the bank became familiarly known as The Monster. [Footnote: Catterall, Second Bank, 67.]

Even in the days of its laxity the national bank was obnoxious in many quarters of the country. By the state constitution of 1816 Indiana attempted to prevent the establishment within its limits of any bank not chartered by the state; and Illinois incorporated a similar provision in her constitution of 1818. Between 1817 and 1819 Maryland, Tennessee, Georgia, North Carolina, Kentucky, and Ohio all passed acts taxing the United States Bank. [Footnote: Ibid., 64, 65.] Ohio, defying the decision of the supreme court in The case of McCulloch vs. Maryland, which asserted the constitutionality of the bank and denied to the states the right to tax it, forcibly collected the tax and practically outlawed the bank. [Footnote: See chap. xv., below.]