FORE:The winter of 1836-7 was marked by great commercial activity, and a strong tendency to over-trading, chiefly on the part of the banks. The result was a reaction, and considerable monetary embarrassment. In the reckless spirit of enterprise which led to these consequences, the American houses took the lead. The American speculators indulged an inordinate thirst for gain by land jobs, and over-trading in British produce. The most remarkable examples of this were afforded by three great American houses in London, called "the three W.'s." From an account of these firms, published in June, 1837, it appeared that the amount of bills payable by them from June to December, was as follows: Wilson and Co.,[411] 936,300; Wigan and Co., 674,700; Wildes and Co., 505,000; total acceptances, 2,116,000. This was upwards of one-sixth of the aggregate circulation of the private and joint-stock banks of England and Wales, and about one-eighth of the average circulation of the Bank of England. The shipments to America by Wigan and Co. amounted to 1,118,900. The number of joint-stock banks that started into existence at this time was remarkable. From 1825 to 1833 only thirty joint-stock banks had been established. In that year the Charter of the Bank of England being renewed, without many of the exclusive privileges it formerly enjoyed, and the spirit of commercial enterprise being active, joint-stock banks began to increase rapidly. There was an average of ten new companies annually, till 1836, when forty-five of these establishments came into existence in the course of ten months. In Ireland there were ten started in the course of two years. The consequence of this greatly increased banking accommodation produced a wild spirit of commercial adventure, which collapsed first in America, where the monetary confusion was unexampledbankers, importers, merchants, traders, and the Government having been all flung into a chaos of bankruptcy and insolvency. This state of things in America had an immediate effect in England. Discounts were abruptly refused to the largest and hitherto most respectable houses of Liverpool and London. Trade, in consequence, became paralysed; prices suddenly dropped from thirty to forty per cent.; and the numerous share bubblesthe railway projects, the insurance companies, the distillery companies, the cemetery companies, the sperm oil, the cotton twist, zoological gardens, and other speculationswhich had floated on the pecuniary tide, all suddenly collapsed, and there was an end to the career of unprincipled adventurers. It is satisfactory, however, to observe that the sound commerce of the country soon recovered the shock thus given; and in less than two years the pecuniary difficulties had passed away. Commerce had resumed its wonted activity, and flowed steadily in legitimate channels. The American banks resumed payment, and the three great American houses, which had involved themselves to such an enormous extent, were enabled to meet all their liabilities.
FORE:Thus this mighty armadaof which such high things were expectedwas dispersed; Rodney, sending part of his fleet to Jamaica, proceeded to join Arbuthnot at New York, with eleven ships of the line and four frigates. The news of his approach reached the French and Americans there, at the same time as that of the return of De Guichen to Europe, and spread the greatest consternation. To consider what was best to do in the circumstances, a meeting was proposed at Hartford, in Connecticut, between Washington and Rochambeau, which took place on the 21st of September. At this moment a discovery took place which had a startling effect on the Americans, and was calculated to inspire the most gloomy views of their condition. General Arnold, who had fought his way up from the humble station of a horse-dealer to that which he now held, had, on all occasions, shown himself an officer of the most daring and enterprising character. Having been appointed military governor of Philadelphia, after its evacuation by General Clinton in 1778, as a post where he might recover from the severe wounds which he had received in the recent campaign, he began a style of living much too magnificent for his finances, for, with all his abilities, Arnold was a vain and extravagant man. He married a beautiful young lady of that city of Royalist origin. Rumours to his disadvantage were soon afloat, originating in this cause, for whatever he did was regarded by the staunch Whigs with an unfavourable eye. Congress was the more ready to listen to charges against him, because, involved himself in debts incurred by his extravagance, he pressed them for large claims upon them, which they had no means to satisfy. Commissioners were selected by them to examine his claims, and these men, appointed for their hard, mean natures, reduced his demands extremely. Arnold uttered his indignation at such treatment in no measured terms, and the consequence was that he was arrested, tried by a court-martial, on various charges of peculation in his different commands, and for extortion on the citizens of Philadelphia. Some of these were declared groundless, but others were pronounced to be proved, and Arnold was condemned to be reprimanded by the Commander-in-Chief. This put the climax to his wrath. Washington, who had, in Arnold's opinion, been as unjustly exalted and favoured for his defeats and delays, as he himself had been envied and repressed for his brilliant exploits, was of all men the one from whom he could not receive with patience a formal condemnation. This sentence was carried into effect in January, 1779, and Arnold, stung to the quick, was prepared to perpetrate some desperate design. The opportunity came when he was placed in command of West Point, on the Hudson, which was the key to all intercourse between the Northern and Southern States.