ency at
their discretion, and were authorized to levy an annual tax upon the
country, nearly equivalent to the interest on $200,000,000 of deposits
and circulation. On top of these acts, the Legislature passed various
acts compelling the public authorities in New York City to deposit
public money with the Manhattan Company. This company, although, as we
have seen, expressly chartered to supply pure water to the city of New
York, utterly failed to do so; at one stage the city tried to have its
charter revoked on the ground of failure to carry out its chartered
function, but the courts decided in the company's favor.[124]

At the outbreak of the panic of 1837, the New York banks held more than
$5,500,000 of public money. When called upon to pay only about a million
of that sum, or the premium on it, they refused. But far worse was the
experience of the general public. When they frantically besieged the
banks for their money, the bank officials filled the banks with heavily
armed guards and plug-uglies with orders to fire on the crowd in case a
rush was attempted.[125]

In every State conditions were the same. In May, 1837, not less than
eight hundred banks in the United States suspended payment, refusing a
single dollar to the Government whose deposits of $30,000,000 they held,
and to the people in general who held $120,000,000 of their notes. No
specie whatever was in circulation. The country was deluged with small
notes, colloquially termed shinplasters. Of every form and every
denomination from the alleged value of five cents to that of five
dollars, they were issued by every business individual or corporation
for the purpose of paying them off as wages to their employees. The
worker was forced to take them for his labor or starve. Moreover, the
shinplasters were so badly printed that it was not hard to counterfeit
them. The counterfeiting of them quickly became a regular business;
immense quantities of the stuff were issued. The worker never knew
whether the bills paid him for his work were genuine or counterfeit,
although essentially there was not any great difference in basic value
between the two.[126]

THE RESULTING WIDESPREAD DESTITUTION.

Now the storm broke. Everywhere was impoverishment, ruination and
beggary. Every bank official in New York City was subject to arrest for
the most serious frauds and other crimes, but the authorities took no
action. On the contrary, so complete was the dominance of the ba