2. In not requiring from the purchasers of its stock the payment of the
second and third instalments in cash, and in the Public Debt of the
United States.
3. In paying dividends to purchasers of its stock who had not entirely
paid up.
4. In allowing voting by proxy to a greater extent than the charter
permitted.
Upon receipt of the report the Governor fled, and the shares fell to
$93. In 1818 the speculation was so wild that no one failed on account
of a smaller sum than $100,000. A drawing-room that had cost $40,000,
and a bankrupt's wine-cellar estimated to have cost $7,000, were cited
as instances of the general prodigality. The Senatorial Committee of
Inquiry declared that the panic imposed ruinous losses upon landed
property, which had fallen from a quarter to even a half of its value.
In consequence forced sales, bankruptcies, scarcity of money, and a
stoppage of work occurred. House-rents fell from $1,200, to $450; the
Federal stock alone held its own at 103 to 104.
On the 13th of December, 1819, a Committee of the House of
Representatives reported that the panic extended from the greatest to
the smallest capitalists. It concluded by demanding the intervention of
the legislative power to restrain the corporation, which, spreading its
branches throughout the Union had inundated it with nearly $100,000,000,
of new circulating medium. Those who unfortunately owed money lost all
the fruit of long work, and skilled laborers were obliged to exchange
the shelter of their old homes for the inhospitable western forests.
Forced sales of provisions, merchandise, and implements were made,
greatly below their purchase price. Many families were obliged to limit
their most necessary wants. Money and credit were so scarce that it
became impossible to obtain a loan upon lands with the securest titles;
work ceased with its pay, and the most skilful workman was brought to
misery; trade restricted itself to the narrowest wants of life;
machinery and manufactories lay idle; the debtor's prison overflowed;
the courts of justice were not able to look after their cases, and the
wealthiest families could hardly obtain enough money for their daily
wants.
The Committee appointed by the Senate of Pennsylvania reported on the
29th of January, 1820, that, to prevent a bad administration of the
banks, it was necessary: