On the 9th of January, 1832, Mr. Dallas petitioned for a re-charter which was referred to a committee and favorably reported on. After protracted discussions on the subject, however, the President refused his signature to the bill, assigning the following reasons: - "That the act was unconstitutional because the law creating this bank is not one of the necessary and proper means vested in Congress to carry into effect the powers expressly granted; that the bill granted exclusive privileges and was a dangerous 'monopoly;' that it was not subject to State taxation; and that it was ill-timed, inexpedient, and unnecessary for the public service." To this veto message Daniel Webster replied on the 11th of July, 1832, when he said that the objections of the President "go against the whole substance of the law originally creating the Bank. They deny in effect that the Bank is constitutional; they deny that it is expedient; they deny that it is necessary for the public service." Elaborate arguments in favour of rechartering were, however, of no avail. In the autumn of 1832, General Jackson was re-elected President, which settled the question that the second United States Bank must, like its predecessor, go into liquidation. On the 18th of September, 1833, a peremptory order was issued for the removal of the Government deposits which were transferred from the United States Bank to the "State deposit Banks." The amount thus transferred was about eleven millions of dollars, and the ending of the services of this national bank to the Government was the beginning of the inflation of credit upon a scale which must have caused the President to question the expediency of the course he had adopted. In June, 1836, an act was passed authorizing the distribution to the several States of the supposed surplus funds belonging to the United States Treasury in proportion to their respective representation in the Congress, and it was supposed some forty or fifty millions of dollars were so distributed. The result of this spreading out of the public balances we will give in Mr. Spaulding's words.

"By the successive acts and proceedings just narrated a train was skilfully laid for a general crash in the financial affairs of the government, the Banks, and the people. The natural result of what had taken place during the last six years led inevitably to a general smash-up. The Bank, which President Madison, in his first annual message after approving its charter, declared was " essential for the interests of the community at large, as well as for the purposes of the Treasury," was killed by the veto of President Jackson and forced to wind up its affairs as a national institution; the government deposits were illegally removed to a great number of State deposit banks; the State Banks were increased, upon fictitious capitals, to an alarming extent; bank credits were extended in the form of paper currency and improper loans upon inadequate and unconvertible security; high prices, overtrading and extravagance in living followed as a natural consequence. The catastrophe resulting from this unnatural and reckless state of things could not long be delayed.

"The specie circular issued by President Jackson showed distrust of the state Bank currency; gold and silver was demanded. Failures became frequent in the latter part of 1836, and the early part of 1837. State bank currency, in many cases, was not redeemed in coin when presented for that purpose, and very soon became uncur-rent money. The Wild Cat and Red Dog Banks at the West first broke down; the Safety Fund of New York received a blow from which it never recovered, and finally went out of existence.

"Each day developed some new case of insolvency on the part of banks and individuals. Finally, the distrust extended to all classes of business; credit was destroyed; the panic became general, when in May, 1837, all the banks in the country suspended specie payments, and the "deposits" in the "Pet Banks" to the credit of the Treasurer of the United States became unavailable. The demoralization was complete and general in all private as well as governmental transactions. It was difficult for the Secretary of the Treasury to manage the fiscal affairs of the government; but we doubt if either he or the country derived much consolation from the letter which General Jackson wrote from his retirement at the Hermitage, to the effect that "the history of the world never has recorded such base treachery and perfidy as had been committed by the deposit banks against the government." With reference to the free Banking Law of New York we are told that "on April 18th, 1838, the monopoly of banking under special charters was brought to a close in the State of New York, by the passage of the act 'to authorize the business of Banking,' Under this law associations for banking purposes and individual bankers were authorized to carry on the business of banking, by establishing offices of deposit, discount, and circulation. Subsequently a separate department was organized at Albany, called 'The Bank Department,' with a superintendent who was charged with the supervision of all the banks in the State. Under this law institutions could be organized simply as banks of 'discount and deposit,' and might also add the issuing of a paper currency to circulate as money. At first the law provided that State and United States stocks for one half, and bonds and mortgages for the other half, might be deposited as security for the circulating notes to be issued by banks and individual bankers. Upon a fair trial, however, it was found that when a bank failed, and the Bank Department was called upon to redeem the circulating notes of such bank, the mortgages could not be made available in time to meet the demand. The mortgages when brought to the test of raising ready money proved to be unavailable, and by an amendment of the law the receiving of mortgages as security for circulating notes was discontinued, "This law, with the various amendments that have been made, has proved to be a valuable and useful mode of carrying on the business of banking, and ultimately a very large majority of the banks in New York came under its provisions in the transaction of their business. Among them I may name a few of the most prominent.