Troubles and strains, however, began to pile up as the boom continued. The
resumption of specie payments by the banks was increasingly more nominal than
real. Obstacles and intimidation were the lot of those who attempted to press the
banks for payment in specie.46
The consequent loss of confidence in the banks was demonstrated by the
emergence of a premium for specie on the market. The discount on bank notes
made it more difficult for the banks maintaining specie payment to retain specie
in their vaults, since people could redeem their notes for specie, and sell it for
bank notes at a discount..........
http://mises.org/rothbard/panic1819.pdf
the above excerpts are from the panic of 1819 pdf
the first excerpt says specie payments becam more nominal than real? can anyone describe what that even means?
secondly, if a boom was taking place as stated in the text ...why the increased demand for specie with paper providing increasing economic output?
As to the first, the banks officially resumed specie payments, i.e. they declared themselves ready to redeem anyone's notes in specie on demand. However, Rothbard says here, that the banks have increasingly tried to put obstacles and intimidate those who attempted to press the banks for payment in specie. Hence the 'more nominal than real'.
In the second point, Rothbard speaks of a loss of confidence. Even in regular times, some people would demand specie, and the more the banks expanded their notes, the more specie from their reserves would be requested, putting them on a shakier ground. Their unwillingness to produce the specie despite official guarantees could alone inspire a certain lack of confidence, hence the premium for specie in the market.
Mises Wiki | Economic Resources and Books (search engine)
http://butnowyouknow.wordpress.com/those-who-fail-to-learn-from-history/history-of-economic-downturns-in-the-us/
I'm behind a firewall, ergo cannot access it to copy here, but there's a lot of info about economic depressions in the US, there.
Hmmm... there could certainly be more, and it seems according to them most panics were caused by a lack of currency in one form or another...
There are two Mises Dailies about the Panic of 1819:
1819: America's First Housing Bubble
The Panic of 1819