Monetary Problems.

The period between 1815 and 1850 witnessed a market and transportation revolution resulting in tremendous economic growth. Credit was a desperately needed commodity. Americans relied on paper currency to facilitate commercial exchanges, though many, especially hard-money Democrats, feared the inflationary effects of paper and preferred to use specie (gold and silver money) in transactions. Dependence on paper money was risky. Many local banks issued paper notes in a variety of denominations. Banks were supposed to keep a certain percentage of specie on hand in the event customers wanted to exchange paper for metal, but few banks were able to meet their total paper obligation, and a run on the bank often resulted in the suspension of specie payments. As long as there was a national bank, such as the Second Bank of the United States, to control smaller banks by buying up their...