That market correction took a long time and only occurred after years of fraud and large losses by those defrauded by these “banks”. And New England was not the center of the problem with the wildcats. They were most prevalent where there was an undeveloped banking system such as the frontier areas. I believed that is why they were called “wildcats” as in being located where wildcats were common.
The whole episode was another example of an insufficient money supply which always accompanies the so-called gold standard. People had to use their ingenuity to devise other currencies to keep the economy moving. And not all of it was good.
New England was indeed the epicenter of the wildcat banking phenomenon. The wildcat banks were founded in Minnesota in order to make it nearly impossible for New England bankers and merchants to redeem their notes for specie - despite the notes being nominally redeemable. But they were founded by unscrupulous New England bankers and the notes were intended to circulate in New England.
The reason they are called wildcat banks is good story. New Yorkers had resorted to paying their taxes with wildcat notes - getting rid of their least reliable notes which is smart. The New York city treasurer decided to personally go to Minnesota and redeem a wagon load of of notes, but he never returned. Some months later his body was found along with all of the money. It had been predated on and rumors circulated that he had been killed by a wildcat. So the Minnesota banks became known as wildcat banks.
Suffolk published a discount list for every known type of banknote stating what they would pay for the notes. To get a favorable rate a bank had to have gold on deposit at Suffolk bank. A low discount rate meant a bank's customers had to pay higher prices all over town. It worked. The wildcat banks, and many local banks as well, were revealed to be weak or insolvent and went under.
A similar phenomenon to Suffolk Bank happened in New Orleans with Citizens Bank. Citizen's was not founded by merchants though. It was a pre-existing bank that emulated Suffolk's methodology.
BTW the notion that their could ever even be such a thing as an "insufficient money supply" ranks right up there with the Labor Theory of Value on the list of government rationalizations no longer taken seriously.