Confronted with the nation's first great panic, Americans searched widely for the causes of and remedies for their plight. Their search led them to a wide variety of suggestions and controversies, many of which showed keen insight and economic sophistication. Discussion was carried on in the newspapers, in monographs, and in the halls of legislatures. Particularly striking is the high caliber economic thinking of the influential journalists of the day and of many leading political figures. The absence of specialized economists was in a way compensated by the economic knowledge and intelligence of the articulate members of the community, including the leading statesmen. One of the chief centers of attention was the monetary system. The nation's monetary system was highly imperfect; banking on a nationwide scale was new, and the nation suffered from inconvertibility and varying rates of depreciation during the War of 1812 and elimination and then renewal of a Bank of the United States. There had always been men who favored inconvertible paper for purposes of national development and men who opposed it, but lately little attention had been paid to such schemes. The panic caused monetary troubles to intensify and take on a new urgency. Groups of monetary expansionists arose, many of them respectable pillars of their communities, who wished to stop contraction of the money supply and expand the circulating medium instead. Various types of plan were developed and advanced, on both a federal and state level. Most discussion was on the state level, where all banks except the Bank of the United States were chartered. The most moderate wished to bolster the failing banks by permitting them to suspend specie payment temporarily while continuing in operation. Others turned to the creation of wholly state owned banks or loan offices to issue inconvertible currency. Many states adopted measures to bolster or expand the money supply, including attempts to outlaw depreciation of bank notes.
