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The response to the Panic was largely local and state, as the federal government lead by the Jeffersonian were reluctant to intervene in the crisis. The Second Great Awakening would have roots in this response, as troubled men turn towards their faith for guidance out of the abyss. The concept of a federal government was ill-defined in those days due to the fact that the new deal wont occur for a century, left the model of relief increasing into private hands as local government spasm in the face of the panic. This would have a grave effect on the country, as the middle classes would form their own identity and will repress the poor on the value of laziness and decried the rich for its excess. The idea of seeing debts as limited to the weak and the dubious would be shattered as all classes fall into insolvency and as a result, there were pushes in the state legislature to enacted debtor protection laws.
Congress during this time, passed into law, a proposal that dates back to 1810, that the sale of public land would solely be based on cash, not on credit. Furthermore, to alleviate the sorrows of the debtors, the minimum requirements of the purchase of land was lowered. Walker, an Alabama senator, supported Kentucky Johnson’s proposal of a plan to forgive debt by allowing the debtor to surrender their claims to lands they cant pay while retaining the land they did pay for. The relinquishment law was passed into law despite New England’s protection. The Jeffersonian executive branch under Monroe, veto bills that would expand federal authority such as imposing a tariff (New England) or internal improvement projects (Western). Crawford’s report on currency would nail the coffin of federal intervention, where he stated that the government specie reserves were too low to support a hard currency. This signal to the states that the federal job in managing the crisis is over and its time for them to assume the mandate of governance.
Due to the massive insolvency in the west, there was a fracture in the state politics. Debtors’ demand for relief, lead to single-issue parties revolving around debt forgiveness and relief (both for and against), which culminated in the ushering of the Jacksonian Democracy, a monstrous offspring of Jeffersonian ideology. Relief and Anti-Relief party sprung up in Tennessee and their popularity was divided among state boundaries. Middle Tennessee was favored by the relief party as this was the cotton-based part of the state while the Eastern part of the state opposed the relief. Newspapers in middle Tennessee counter this with the Courier writing that a fall in foreign markets, and the domestic scarcity of a circulating medium(Browning, 2019, p. 230),
Felix Grundy was elected to the Tennessee legislature on a platform of debt reliefs and won passage of the Endorsement Law. This law protects the debtor and the bank by delaying judgment of debt for two years if the creditor accepted the note of the state-charted bank at face value. Running on this success, he further exposed a loan office to issue nonredeemable currency at 6% and a law that require creditors to accept these notes or wait for 2 years for execution. This was vehemently opposed by Jackson, where this plan would threaten his financial gains. The state legislature called him offensive and tabled his proposal.
The Kentucky model was exported to other states where they began to divide the country apart. The establishment agreed on the sanctity of contracts and look down on the state banks. However, common people pointed fingers at the BUS for being responsible for the crisis. The Relief party was divided too, with one side wanted hard currency and the other soft currency. The Jeffersonian united in their opposition to any state-sponsored expansion of currency. This, however, didnt stem the tide of the accession of relief parties in the states, where soon Kentucky adapted their policies and all states west to the Application (except Mississippi and Louisiana).
These laws give debtor greater access to credit but didnt solve the underlying issue of how to the debt the debtor already has. Debt relief laws in response to these swept the country and include a provision such as requiring a minimum value for a property to be foreclosed and a delay of judgment on debtors. New England and the southern states soon followed these proposals. These laws were often subjected to governor veto and court overturn. The death of the relief party is attributed to the court cases that blunter their reforms and the rise of Jackson into the White House, where many former pro-relief parties abandoned their platform to receive political favors. Kentucky abounded support of Henry Clay, who supported the relief movement, due to his association with the BUS.
In the east (north and south), there was more opposition to the relief program as the government was more conservative. Maryland was the only exception to this due to the high losses it suffered during the panic and as such, they adopted progressive laws such as banning debtor prison and create an exemption from foreclosure. In the north, they were some attempts to adopt this but the law passed was insignificant and often vetoed. The opposition to this was mainly on the concern that these laws can interfere with the recovery of credit of confidence in the financial system.
In New England, the response to the panic was mostly private as the state government doesnt want to intervene. With no national figure wanting to endorse the debt-relief laws and Jackson opposed to it, the legislation movement quickly fizzled out. The poor because of the panic, in America, was increased viewed as lacking in moral discipline and soon the public become opposed to helping the poor. This view was not exclusive to just one political party, on the contrary it was inclusive to all political parties from the Whigs to the democrats. The Whig characterized them as leaches while the Democrat illustrated them as drunkards.
As a result, the amount of taxes revenue to the social net went down by 20% in a span of 5 years (this was during the panic and after it), and the burden of supporting the poor went onto private charities. This cut was justified as the hard working taxpayer shouldnt support the living of an idleness person. The resurgence of Puritan values lead to the religious argument that poverty was a punishment for moral deficiency. From the north, where the New York American published, our conviction that all purely charitable institutions except hospitals for the insane, tend to aggravate evils which it is their purpose to relieve (Browning, 2019, p.273), to the south where church minister began to preach, There were indeed new indications that a substantial segment of the townspeople supported sterner standards (Browning, 2019, p. 277), all share the same sentiment, that society should be hard on the poor to promote industrious character.
This hardline perspective of the poor, persist to this present day, where politicians point to welfare queen as a way to justify public investment cuts and privatization of public health sectors. In addition, the poor become entangled in this mentality that their plight is due to their character, not to external events, leading to Kennedy, in his book Freedom from Fear, to write, Social investigators & encountered feelings of guilt and self- recrimination among the unemployed, despite the transparent reality that their plight owed to a systemic economic breakdown (Browning, 2019, p. 280). Ironically, the key instigator of the Panic of 1819, the Louisiana Purchase, instead of fostering unity and community among the lower classes, it had instead chained them to their poverty.
The legacies of the Louisiana Purchase were long-lasting. First of all, the expansion of land and its subsequent settlement extended the franchise to the common people. Consequently, this saw presidential elections becoming more competitive as the party platform start to be more egalitarian. Subsequently, the accession of Andrew Jackson to the white house in 1828, can be attributed to the newly formed western electors, where all of the western states cast their electoral college for Jackson. Presidential elections shift from an election about national issues such as internal improvement to divisive sectional issues such as slavery, which further alienates the country even more. Furthermore, the census of 1820, increase southern influence in congress due to the diffusion of southerners to the newly created states which has deep ramifications in the future. Congress was increasing aligned towards the radicals of the abolitionist and slavers, wherein this climate the spirit of the constitution was violated in the gag rule resolution and inflammatory articles published by abolitionist papers open up a crevasse in the country.
Another repercussion of the Louisiana Purchase was the ratification of the Missouri Compromise. Many textbooks are apt to portray the Missouri Compromise, as the rare moment in US history, where sectional division is placed aside in the interest of persevering the union. In contradiction, however, the compromise would seal the division of the country until the civil war. To elaborate, the principle that the country was committed to the preservation of the delicate balance between free and slave states was misleading as the balance of power in the House of Representatives was firmly in the control of the north despite the admission of the new slaves states due to immigration numbers and urban centers. Thus, the south salvation in preserving the peculiar institution was the senate, where the balance of power was more even.
Indeed, the narrative that the south was opposed to Free State admission during this period of time was misleading, as the South did lend support to admit Illinois, a free state, into the Union. The real factor in the crisis of Missouri came in the form of Congressman Tallmadge, a northern Jeffersonian, who agitated the crisis. His radical voice against the slavery was extreme even to the point where he retorts, Sir, if a dissolution of the Union must take place, let it be so! If civil war & I can only say, let it come (Browning, 2019, p. 337)! Even though his amendment barely failed, it uncovers the veil between the north and south. In addition, due to the fallen cotton prices due to the Panic of 1819, planters have to rely on more production to keep their standing of living up, which came at the cost of more slavery. Calhoun, during this time, was in favor of resolving the conflict, and work with Adams toward a compromise.
When the 16th congress meet, the issue of Maine admission was brought up, and a date was set up that Maine has to be a state or be revert back to being part of MA. Moderates of both aisle tied Maine to Missouri, in an effect to create support for Maine admission. Maine admission barely, passed congress, as several southerners absent from the vote allowing the bill to pass.
Though the Missouri compromise is now celebrated, its contemporary person was absolute in their opposition to it. In the north, effigies were burned of congressmen who supported the bill, and in the south, many called the compromise a dirty bargain . Jefferson, himself, recognized that the tranquility was only temporary, and wrote, It is hushed indeed for the moment, but this is a reprieve only . . . and every new irritation will make it deeper and deeper (Browning, 2019, p. 347). The Panic cause the transition from low use of labor to harvest high-yield cotton to high use of slaves for low-yielding cotton.
Another factor of the deepening division of the country was the opposition to internal improvements from the south which caused the nation to fragment into regional spheres. Many southerners were opposed to the proposal due to falling cotton prices. One, due to the depressing prices there are no funds for state or federal government to fund the projects in the first place and secondly planters saw no benefit in connecting their state to competing planters outside of their state. Thus, if one was to ask a Virginian, where he come from, he would say Virginia instead of the US. National identity was dissolving as states resemble more as independent fiefdom then provinces of a country.
Tariffs was another point of division in the country that arise out of the panic. The north supports the tariff to promote and protect domestic industry. This was opposed by the south who said that the tariff is immoral as it corrupt true republican principle by creating domestic monopolies, conferred exclusive privileges on the northern companies, and rise taxation on the south. Thus, from the attempt to raise revenue to offset the panic, the country become more divided as ever.
Jefferson accomplished his goal of making the US economy subservient to the British, where US trade raw material for manufactured goods. But at what cost? It stagnated the cradle of industries in the north to the joy of the Jeffersonian but soon the economy depended on the fluctuation of commodity prices where during the British downturn spread to the US as planters cant find a market and loans was written off. Crawford in his role, degraded the currency of the country in order to feed the monster that is of land consumption. In addition, the relief movement grows to a movement for commoners participation in politics then to waving the dirt flag in order to rise voters from the west and south to vote for Jackson. Slavery was preserved as planters in order to avoid bankruptcy from the low cotton prices have to employ more slaves to work on plantation. This resulted, in the increase production temporary raising the standard of living for planters, but then regress on the price of cotton, which then lead more reliance of slavery to offset the cost and so on.
To conclude on this matter, the Jeffersonian complicit role in the Panic of 1819 and its confounded response to the crisis serves as a reminder of the dangers of allowing a populist government to take charge without institutional oversight. Though in the long scheme of things the Louisiana Purchase was beneficial to the countrys prestige, the purchase slows down the development of the country as the population of the coastline migrated to the interior of the land causing the negligence of critical internal projects. Subsequently, the legacy of the Louisiana Purchase is contentious as its the key trigger of the Panic of 1819, the rise of unchecked populism, and the deep balkanization of the country leading to civil war. On the other hand, the purchase opens up the possibility of Manifest Destiny and forms a key component of the identity of the country. By extension, the Jeffersonian ideology legacy and its enshrinement in Americans civic pride have to be re-evaluated in light of the evidence presented. The intransigent Jeffersonian in their moralism robbed the country of the good era and imposed archaic traditionalist morals on society. On a final note, Jefferson described the Panic of 1819 as a waves of a storm [that] will pass under the ship (Browning, 2019, p. 16) , an understatement given the gravity the panic pulled on the country to the brink of financial ruin, to sectional discord, and to bereft the country of its establishments by a misguided conservative egalitarian party.
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