Studies in American History 
55 
more than any other failed in the end.”^^ During the War of 
1812, as noted before, it was forced to suspend specie pay- 
ments/® In February, 1815, the legislature increased the cap- 
ital stock of the bank to $3,000,000. At the same time, the 
legislature declared that executions on judgments should be 
stayed twelve months unless the creditor should agree by 
indorsement on the note that paper money issued by the Bank 
of Kentucky, or of any other incorporated bank in the state 
or of the Treasury of the United States, would be received 
as payment; if that condition were granted by the creditor, 
the stay should then be for only three months. Few money- 
lenders could afford to operate at the risk of receiving badly 
depreciated bank currency or wait twelve months after matur- 
ity for their money.^® 
The Bank of Kentucky was allowed thirteen branch banks, 
one for each of the thirteen judicial districts, and, if it had 
been spared from political jockeying, would no doubt have 
been a sound institution. The mother bank at Frankfort and 
its branches had capital stock amounting to $2,726,100. 
Paper money became abundant, and in 1817 the legislature 
legalized an agreement between the mother bank and its 
branches that neither was bound to take the notes of the 
other. This of itself discredited the bank. During the panic 
year of 1819 the charter was extended to 1841, later limited 
to 1829, and finally repealed in 1822. From time to time the 
bank was given by the legislature an extension of its fran- 
chise so that it might continue to collect its assets and pay 
its liabilities, but many of its notes were never paid. The 
Bank of Kentucky had helped to cripple the Kentucky Insur- 
ance Company; it, in turn, was crippled by the creation of 
more paper money banks, and the result spelled failure in 
each instance.^^ 
It has been intimated that the Bank of Kentucky aroused 
jealousy. New, growing communities wanted banks, and 
some of the older towns wanted an increased number of banks. 
Some Lexington business men applied to the legislature in 
Durrett, op. cit., 14. 
^5 Guy Carleton Lee (ed,), 2'he History of North America (Philadelphia, 1903), XII, 
159. 
Samuel M. Wilson, “The Old Court and the New Court Controversy in Kentucky”, 
in Proceedings of the Kentucky State Bar Association, 1913, p. IS. Also published in the 
Lexington Herald, July 11, 1915, 
Durrett, op. cit., 15-17 ; Duke, op. cit., 17-20. 
