A School History of the United States Part 35

%341. Wildcat State Banks.%--As soon as the reelection of Jackson made it certain that the charter of the Bank of the United States would not be renewed, the same thing happened in 1833 that had occurred in 1811. The legislature of every state was beset with applications for bank charters, and granted them. In 1832 there were but 288 state banks in the country. In 1836 there were 583. Some were established in order to get deposits of the government money. Others were started for the purpose of issuing paper money with which the bank officials might speculate. Others, of course, were founded with an honest purpose. But they all issued paper money, which the people borrowed on very poor security and used in speculation.

%342. The Period of Speculation.%--Never before had the opportunity for speculation been so great. The new way of doing business, the rise of corporations and manufactures, drew people into the cities, which grew in area and afforded a chance for investors to get rich by purchasing city lots and holding them for a rise in price. Railroads and ca.n.a.ls were being projected all over the country. Another favorite way of speculating, therefore, was to buy land along the lines of railroads building or to be built. Suddenly cotton rose a few cents a pound, and thousands of people began to speculate in slaves and cotton land. Others bought land in the West from the government, at $1.25 an acre, and laid it out into town lots,[1] which they sold for $10 and $20 apiece to people in the East. In short, everybody who could was borrowing paper money from the banks and speculating.

[Footnote 1: Sometimes ten such lots would be laid out on an acre]

Under these conditions, any cause which should force the banks to stop loaning money, or to call in that already loaned, would bring on a panic. And this is just what happened.

%343. The Specie Circular.%--Speculation in government land was so general that the annual sales rose from $2,300,000 in 1831, to $24,900,000 in 1836.[2] Finding that these great purchases were paid for not in gold and silver, but in state bank paper money, Jackson became alarmed. Many of the banks were of doubtful soundness, and if they failed, all their money which the government had taken for land would be lost. In 1836, therefore, Jackson issued his "Specie Circular," which commanded all officials authorized to sell government land to receive payment in nothing but gold or silver or land scrip. A great demand for specie and a removal of it from the banks in the East to those in the West followed, which of course hurt the Eastern banks, because it took away some of their money, and that kind of money which they were holding for the purpose of redeeming their paper.

[Footnote 2: Shepard's _Van Buren_, Chap. 8; Sumner's _Jackson_, pp.

322-325]

Another thing which hurt the banks, by forcing them to stop loaning and to call for a settlement of debts, was the distribution of the surplus revenue among the states.

%344. The Surplus Revenue.%--What caused this surplus revenue? Many things.

1. The United States had no debt. The national debt, you remember, was created in 1790 by funding the foreign and Congress debt and a.s.suming those of the states, and amounted to $75,000,000. When Jefferson was elected President in 1801, this debt had risen to $80,000,000; but during his administration it fell to $57,000,000. The war with England raised it to $127,000,000, after which it once more decreased year by year till 1835, when every dollar was paid off, and the United States was out of debt[1].

[Footnote 1: As bonds, etc., to the value of $35,000 were never presented for payment, the United States appears to have always been in debt. This $35,000 probably represents evidences of indebtedness lost by the owners]

2. The expenses of the government were not large.

3. There was a heavy importation of foreign goods, which produced a great revenue under the tariff act.

4. The immense speculation in government lands already described produced a large income to the government[1].

[Footnote 1: The land sales were $4,800,000 in 1834, $14,757,000 in 1835, and $24,877,000 in 1836]

In consequence of these causes, the government on June 1, 1836, had in the banks $41,500,000 more than it needed.

What to do with this useless money sorely puzzled Congress. It could not reduce the tariff, because that was gradually being reduced under the compromise of 1833. Some wanted the money derived from the sale of land distributed. But at last it was decided to take all the surplus the government had on January 1, 1837, subtract $5,000,000 from it, and divide the rest by the number of senators and representatives in Congress, and give each state as many parts as it had senators and representatives[1].

[Footnote 1: One state, New York, was to receive $4,000,000, three states over $2,000,000, six over $1,000,000, and eight over $500,000]

On January 1, 1837, the surplus was $42,468,000, which, after subtracting the $5,000,000, left $37,468,000 to be distributed. It was to be paid in four installments[1]; but only three of them were ever paid, for, when October 1, 1837, came, the whole country was suffering from a panic[2].

[Footnote 1: The days of payment were Jan. 1, April 1, July 1, and Oct.

1, 1837]

[Footnote 2: Bourne's _History of the Surplus Revenue of 1837_]

%345. The Panic of 1837.%--Now, when the banks in which the government surplus was kept were suddenly called on to give it up in order that it might be distributed among the states, (as they had loaned this surplus) they were all forced to call it in. More than that, they would make no new loans. This made credit hard to get. As a consequence, mills and factories shut down, all buying and selling stopped, and thousands of workmen were thrown out of employment. As everybody wanted money, it followed that houses, lands, property of every sort, was offered for sale at ridiculously low prices. But there were no buyers. In New York the distress was so great that bread riots occurred. The merchants, unable to pay their debts, began to fail, and to make matters worse the banks all over the country suspended specie payment; that is, refused to give gold and silver in exchange for their paper bills. Then the panic set in, and for a while the people, the states, and the government were bankrupt[1].

[Footnote 1: Shepard's _Van Buren_, Chap. 8.]

%346. Election of Martin Van Buren; Eighth President.%--In accordance with the well-established custom that no President shall have more than two terms, Jackson [Ill.u.s.tration: Martin Van Buren] would not accept a renomination in 1836. So the Democratic national convention nominated Martin Van Buren and R.M. Johnson. The Whigs, as the National Republicans called themselves after 1834, did not hold a national nominating convention, but agreed to support William Henry Harrison. Van Buren was elected, and inaugurated March. 4, 1837[1].

[Footnote 1: _Ibid_., Chap. 7.]

%347 The New National Debt; the Independent Treasury.%--But scarcely had he taken the oath of office when the panic swept over the country, and his whole term was one of financial distress or hard times. The suspension of specie payment and the failures of many banks and merchants left the government without money, and forced Van Buren to call an extra session of Congress in September, 1837. Before adjourning, Congress ordered the fourth or October installment of the distributed revenue to be suspended. It has never been given to the states.

Congress also authorized the Secretary of the Treasury to issue $10,000,000 in treasury notes, and so laid the foundation for the second national debt, which one cause or another has continued ever since.

The experience the government had thus twice pa.s.sed through (1814 and 1837) led the people to believe it ought not to keep its money in state banks. But just where the money should be kept was a disputed party question. The Whigs insisted on a third National Bank like the old one Jackson had destroyed. Van Buren wanted what was called an "Independent Treasury," and after four attempts the act establishing it was pa.s.sed in 1840.

The law created four "receivers general" (one each at Boston, New York, Charleston, and St. Louis), to whom all money collected by the United States officials should be turned over, and directed that "rooms, vaults, and safes" should be provided for the safe keeping of the money.[1]

[Footnote 1: Shepard's _Van Buren,_ Chap. 9.]

As might be expected, the people laid all the blame for the hard times on Van Buren and his party. The Democrats, they said, had destroyed the National Bank; they had then removed the United States money, and given it to "pet" state banks; they had then distributed the surplus, and by taking the surplus from the state banks had brought on the panic.

Whether this was true or not, the people believed it, and were determined to "turn out little Van."

The campaign of 1840 was the most novel, exciting, and memorable that had yet taken place. Three parties had candidates in the field. The Antislavery party put forward James Gillespie Birney and Thomas Earle.

The Democrats in their convention renominated Van Buren, but no Vice President. The Whigs nominated W.H. Harrison, and John Tyler of Virginia. The mention of the Antislavery party makes it necessary to account for its origin.

%348. The Antislavery Movement%.--The appearance of the Antislavery or Liberty party marks the beginning in national affairs of an antislavery movement which had long been going on in the states. When the Missouri Compromise was made in 1820, many people believed that the troublesome matter of slavery was settled. This was a mistake, and the compromise really made matters worse. In the first place, it encouraged the men in Illinois who favored slavery to attempt to make it a slave state by amending the state const.i.tution, an attempt which failed in 1824 after a long struggle. In the second place, it aroused certain men who had been agitating for freeing the slaves to redoubled energy. Among these were Benjamin Lundy, James Gillespie Birney, and William Lloyd Garrison, who in 1831 established an abolition newspaper called the _Liberator_, which became very famous. In the third place, it led to the formation all over the North, and in many places in the South, of new abolition societies, and stirred up the old ones and made them more active.[1]

[Footnote 1: _James G. Birney and his Times_, Chap. 12.]

For a time these societies carried on their work, each independent of the others. But in 1833, a convention of delegates from them met at Philadelphia, and formed a national society called the American Antislavery Society.[1]

[Footnote 1: Its const.i.tution declared (1) that each state has exclusive right to regulate slavery within it; (2) that the society will endeavor to persuade Congress to stop the interstate slave trade, to abolish slavery in the territories and in the District of Columbia, and to admit no more slave states into the Union.]

%349. Antislavery Doc.u.ments shut out of the Mails.%--Thus organized, the society went to work at once and flooded the South with newspapers, pamphlets, pictures, and handbills, all intended to arouse a sentiment for instant abolition or emanc.i.p.ation of slaves. The South declared that these were inflammatory, insurrectionary, and likely to incite the slaves to revolt, and called on the North to suppress abolition societies and stop the spread of abolition papers. To do such a thing by legal means was impossible; so an attempt was made to do it by illegal means. In the Northern cities such as Philadelphia, Utica, Boston, Haverhill, mobs broke up meetings of abolitionists, and dragged the leaders about the streets. In the South, the postmasters, as at Charleston, seized antislavery tracts and pamphlets going through the mails, and the people burned them. In New York city such matter was taken from the mails and destroyed by the postmaster. When these outrages were reported to Amos Kendall, the Postmaster-General, he approved of them; and when Congress met, Jackson asked for a law that would prohibit the circulation "in the Southern States, through the mails, of incendiary publications intended to instigate the slaves to insurrection." From the legislatures of five Southern states came resolutions calling on the people of the North to suppress the abolitionists.[1] Congress and the legislatures of New York and Rhode Island responded; but the bills introduced did not pa.s.s.[2]

[Footnote 1: South Carolina, North Carolina, Alabama, Virginia, and Georgia.]

[Footnote 2: _James G. Birney and his Times_, pp. 184-194.]

This attempt having failed, the mobs again took up the work, and began to smash and destroy the presses of antislavery newspapers. One paper, twice treated in this manner in 1836, was the _Philanthropist_ published at Cincinnati by James Gillespie Birney. Another was the _Observer_, published at Alton by Elijah Lovejoy, who was murdered in defending his property.[1] The _Pennsylvania Freeman_ was a third.

[Footnote 1: Wilson's _Rise and Fall of the Slave Power in America_, Vol.

II., Chap. 27; _James G. Birney and his Times_, pp. 204-219, 241-255.]

%350. The Gag Rule%.--Not content with attacking the liberty of the press, the proslavery men attacked the right of pet.i.tion. The Const.i.tution provides that "Congress shall make no law ... abridging ...

the right of the people ... to pet.i.tion the government for a redress of grievances." Under this right the antislavery people had long been pet.i.tioning Congress to abolish slavery in the District of Columbia, and the pet.i.tions had been received; but of course not granted. Now, in 1836, when John Quincy Adams presented one to the House of Representatives, a member moved that it be not received. A fierce debate followed, and out of it grew a rule which forbade any pet.i.tion, resolution, or paper relating in any way to slavery, or the abolition of slavery, to be received. This famous "Gag Rule" was adopted by Congress after Congress until 1844.[1]

[Footnote 1: Morse's _Life of John Quincy Adams, _pp. 249-253, 306-308.]

%351. The Liberty Party formed%.--The effect of these extreme measures was greatly to increase the antislavery sentiment. But the men who held these sentiments were largely members of the Whig and Democratic parties. In the hope of drawing them from their parties, and inducing them to act together, the antislavery conventions about 1838 began to urge the formation of an antislavery party, which was finally accomplished at Albany, N.Y., in April, 1840, where James G. Birney was nominated for President, and Thomas Earle for Vice President. No name was given to the new organization till 1844, when it was christened "Liberty party."

%352. The Log Cabin, Hard Cider Campaign%.--The candidate of the Democrats (Martin Van Buren) was a shrewd and skillful politician. The candidate of the Whigs (Harrison) was the ideal of a popular favorite.

To defeat him at such a time, when the people were angry with the Democrats, would have been hard, but they made it harder still by ridiculing his honorable poverty and his Western surroundings. At the very outset of the campaign a Democratic newspaper declared that Harrison would be more at home "in a log cabin, drinking hard cider and skinning c.o.o.ns, than living in the White House as President." The Whigs instantly took up the sneer and made the log cabin the emblem of their party. All over the country log cabins (erected at some crossroads, or on the village common, or on some vacant city lot) became the Whig headquarters. On the door was a c.o.o.n skin; a leather latch string was always hanging out as a sign of hospitality, and beside the door stood a barrel of hard cider. Every Whig wore a Harrison and Tyler badge, and knew by heart all the songs in the _Log Cabin Songster_. Immense ma.s.s meetings were held, at which 50,000, and even 80,000, people attended.

Weeks were spent in getting ready for them. In the West, where railroads were few, the people came in covered wagons with provisions, and camped on the ground days before the meeting. At the monster meeting at Dayton, O., 100,000 people were present, covering ten acres of ground.[1]

[Footnote 1: Shepard's _Van Buren_, pp. 323-335.]

[Ill.u.s.tration: William H. Harrison]

%353. William Henry Harrison, Ninth President; John Tyler, Tenth President%.--Harrison was triumphantly elected, and inaugurated March 4, 1841. But his career was short, for on April 4 he died,[2] and John Tyler took his place. Tyler had never been a Whig. He had always been a Democrat. Nevertheless, the Whigs, confident of his aid, tried to carry out certain reform measures.