But the secretary and the country soon found that they were on dangerous ground.

In December, 1837, the same secretary, alarmed at his responsibility, said to Congress, in warning words, "We are without any national debt to absorb and regulate surpluses, or any adequate supply of banking institutions which provide a sound currency for general purposes by paying specie on demand, or which are in a situation fully to command confidence for keeping, disbursing, and transferring the public funds in a satisfactory manner." The Bank of the United States, on the expiration of its charter in March, 1836, accepted a charter from the State of Pennsylvania; but, though its influence continued to be as great, its direction was no longer the same.

Abandoning its legitimate business, it speculated in merchandise, and even kept an agent in New Orleans to compete with the Barings in purchases of the cotton crop as a basis for exchange.
Precisely as in 1811, after the withdrawal of the control of the Bank of the United States, the state banks ran a wild career of speculation.
From 1830 to 1837 three hundred new banks sprang up with an additional capital of one hundred and forty-five millions, doubling, as twenty years before, the banking capital of the country.

This volume the deposits of the Treasury continued to swell.

Mr.Woodbury was the first to take alarm.