Studies in American History 
71 
clamor instead of to reason, yielded easily.®^ Those who ex- 
pressed the opinion that this new banking scheme would pre- 
vent speculation or help the general economic situation were 
soon disillusioned.®^ 
The stay on execution of notes for twelve months, which 
had been granted in February, 1820, stopped payments on 
many notes, but by February, 1821, these same notes were 
again due. In the single county of Franklin, where Frankfort 
is located, the Bank of Kentucky in two days began 275 suits 
for the collection of $887,154, which was about $400 per 
capita in that county.®® In the Bank of Kentucky, as before 
noted, half the capital was owned by the state, and the legisla- 
ture had the right to choose half the directors. The old direc- 
tors were now turned out on the charge of meddling in pol- 
itics, and more pliant men were put in their places.®® The 
new president and board of directors stood pledged before 
their election to accept the paper of the Bank of the Common- 
wealth in payment of debts due the Bank of Kentucky.®^ The 
legislature took the stock, money, and business away from 
the Bank of Kentucky as rapidly as possible and put all into 
the Bank of the Commonwealth. It seems that the state had 
a childish idea that its action would bolster up the already 
depreciated notes and stock of the old bank, and at the same 
time help to keep Bank of the Commonwealth notes at par. 
Neither of these things happened. The Bank of the Common- 
wealth in one year after its origin had lent $2,400,000 and 
had issued more than $2,300,000 in paper notes. ®2 It was 
doing business without real money and, after nearly two years 
of operation, it had only $2,633.25 in specie.®® As to the grad- 
ual winding up of the affairs of the Bank of Kentucky, the 
legislature gave it seven years to make all its settlements. It 
was to do this by uniform and regular calls on its debtors 
not exceeding two per cent per month.®^ Early in 1824 the 
paper notes of this bank were called in at the rate of one per 
cent per month.®® 
George Robertson, Scrap Book on Laiv, Politics, Men, and Times (Lexington, Ky., 
1885), 48. 
National Intelligencer, November 28, 1820. 
89 Kerr (ed.). History of Kentucky (quoting from Niles' Register, XX, 85), II, 613, 
Shaler, Kentucky a Pioneer Commonwealth, 178, 
Smith, History of Kenhicky, 509. 
Niles' Register, XXI, 178. 
XXIII, 181. 
National Gazette, Philadelphia, December 17, 1822. 
Niles' Register, XXV, 368. 
