CHAPTER II
SEWARD ELECTED GOVERNOR
1836-1838

The overwhelming defeat of the Whigs, in 1836, left a single rift in the dark cloud through which gleamed a ray of substantial hope. It was plain to the most cautious business man that if banking had been highly remunerative, with the United States Bank controlling government deposits, it must become more productive after Jackson had transferred these deposits to state institutions; and what was plain to the conservative banker, was equally patent to the reckless speculator. The legislatures of 1834 and 1835, therefore, became noted as well as notorious for the large number of bank charters granted. As the months passed, increased demands for liberal loans created an increasing demand for additional banks, and the greater the demand the greater the strife for charters. Under the restraining law of the State, abundant provision had been made for a fair distribution of bank stocks; but the dominant party, quick to take an advantage helpful to its friends, carefully selected commissioners who would distribute it only among their political followers. At first it went to merchants or capitalists in the locality of the bank; but gradually, Albany politicians began to participate, and then, prominent state officers, judges, legislators and their relatives and confidential friends, many of whom resold the stock at a premium of twenty to twenty-five per cent. before the first payment had been made. Thus, the distribution of stock became a public scandal, deplored in the messages of the Governor and assailed by the press. "The unclean drippings of venal legislation," the New York Evening Post called it. But no remedy was applied. The Governor, in spite of his regrets, signed every charter the Legislature granted, and the commissioners, as if ignorant of the provisions to secure a fair distribution of the stock, continued to evade the law with boldness and great facility.

Members of the Democratic party in New York City, who believed that banking, like any other business, ought to be open to competition, had organised an equal rights party in 1834 to oppose all monopolies, and the bank restraining law in particular. Several meetings were held during the summer. Finally, in October, both factions of Tammany Hall attempted forcibly to control its proceedings, and, in the contest, the lights were extinguished. The Equal Righters promptly relighted them with loco-foco or friction matches and continued the meeting. From this circumstance they were called Locofocos, a name which the Whigs soon applied to the whole Democratic party.

The Equal Rights party was not long-lived. Two years spanned its activity, and four or five thousand votes measured its strength; but, while it lasted, it was earnest and the exponent of good principles. In 1836, these people held a state convention at Utica, issued a declaration of principles, and nominated a state and congressional ticket. In New York City, the centre of their activity, Frederick A. Tallmadge was put up for state senator and Edward Curtis for Congress, two reputable Whigs; and, to aid them, the Whig party fused successfully with the Equal Righters, electing their whole ticket. This victory was the one ray of hope that came to the Whigs out of the contest of 1836. It proved that some people were uneasy and resentful.

But other Whig victories were soon to follow. Reference has already been made to the unprecedented prosperity that characterised the year 1836. This era of expansion and speculative enterprises, which began with the transfer of government deposits, continued at high pressure under the influence of the newly chartered banks. With such a money plethora, schemes and projects expanded and inflated, until success seemed to turn the heads of the whole population. So wild was the passion for new enterprises, that one had only to announce a scheme to find people ready to take shares in it. Two per cent. a month did not deter borrowers who expected to make one hundred per cent. before the end of the year. In vain did the Governor inveigh against this "unregulated spirit of speculation." As the year advanced, men grew more reckless, until stocks and shares were quickly purchased at any price without the slightest care as to the risk taken.

The beginning of the end of this epoch of insane speculation was felt, early in the spring of 1837, by a money pressure of unexampled severity. Scarcely had its effect reached the interior counties, before every bank in the country suspended specie payments. Then confidence gave way, and tens of thousands of people, who had been wealthy or in comfortable circumstances, waked up to the awful realisation of their bankruptcy and ruin. The panic of 1837 reached the proportions of a national calamity. Most men did not then know the reason for the crash, and the knowledge of those who did, brought little comfort. But, gradually, the country recognised that the prosperity of a nation is not increased in proportion to the quantity of paper money issued, unless such currency be maintained at its full value, convertible, at pleasure, into hard cash—the money standard of the world.

It so happened that the Legislature had not adjourned when the crash came, and, without a moment's delay, it suspended for one year the section of the Safety Fund act forbidding banks to issue notes after refusing to pay them in coin on demand; but it refused to suspend the act, passed in March, 1835, prohibiting the issue or circulation of bills under the denomination of five dollars. This left the people without small bills, and, as New York banks dared not issue them, necessity forced into circulation foreign bills, issued by solvent and insolvent banks, the losses from which fell largely upon the poorer classes who could not discriminate between the genuine and the spurious. So great was the inconvenience and loss suffered by the continuance of this act, that the people petitioned the Governor to call an extra session of the Legislature for its repeal; but Marcy declined, for the reason that the Legislature had already refused to give the banks the desired authority. Thus, the citizens of New York, staggering under a panic common to the whole country, were compelled to suffer the additional hardships of an irredeemable, and, for the most part, worthless currency, known as "shin-plasters."

In the midst of these "hard times," occurred the election in November, 1837. The New York municipal election, held in the preceding spring and resulting, with the help of the Equal Righters, in the choice of a Whig mayor, had prepared the way for a surprise; yet no one imagined that a political revolution was imminent. But the suffering people were angry, and, like a whirlwind, the Whigs swept nearly every county in the State. Of one hundred and twenty-eight assemblymen, they elected one hundred and one, and six of the eight senators. It happened, too, that as the triennial election of sheriffs and clerks occurred this year, the choice of these officers swelled the triumph into a victory that made it the harder to overthrow. In a moment, the election of 1837 had given the Whigs a powerful leverage in local contests, enabling them to build up a party that could be disciplined as well as organised. To add to their strength, the Legislature, when it convened, in January, 1838, proceeded to take the "spoils." Luther Bradish was chosen speaker, Orville L. Holley surveyor-general, and Gamaliel L. Barstow state treasurer. It also suspended for two years the act prohibiting banks from issuing small bills, passed a general banking law, and almost unanimously voted four millions for enlarging the Erie canal.

Although the spring elections of 1838 showed a decided falling off in the Whig vote, hopes of carrying the State in November were so well founded that Whig candidates for governor appeared in plenty. Looking back upon the contest from a distance, especially with the present knowledge of his superlative fitness for high place, it seems strange that William H. Seward should not have had an open way in the convention. But Francis Granger had also won the admiration of his party by twice leading a forlorn hope. Amidst crushing defeat he had never shown weariness, and his happy disposition kept him in friendly touch with his party. The Chenango people were especially ardent in his support. Twice he had forced their canal project through a hostile Assembly, and they did not forget that, in the hour of triumph, Seward opposed it. Besides, Granger had distinguished himself in Congress, resisting the policy of Jackson and Van Buren with forceful argument and ready tact. He was certainly a man to be proud of, and his admirers insisted with great pertinacity that he should now be the nominee for governor.

There was another formidable candidate in the field. Luther Bradish had proved an unusually able speaker, courteous in deportment, and firm and resolute in his rulings at a time of considerable political excitement. He had entered the Assembly from Franklin in 1828, and, having early embraced anti-Masonry with Weed, Granger, and Seward, was, with them, a leader in the organisation of the Whig party. The northern counties insisted that his freedom from party controversies made him peculiarly available, and, while the supporters of other candidates were quarrelling, it was their intention, if possible, to nominate him. Seward and Granger were eager for the nomination, but neither seems to have encouraged the ill-will which their followers exhibited. Indeed, Seward evidenced a disposition to withdraw; and he would doubtless have done so, had not his friends, and those of Granger, thought it better to let a convention decide. As the campaign grew older, the canvass proceeded with asperity. Granger's adherents accused Seward of an unjust conspiracy to destroy him, and of having canvassed the State, personally or by agents, to secure the prize even at the cost of a party division. They charged him with oppressing the settlers in Chautauqua, with editing the Albany Journal, with regulating the Bank of the United States, and controlling the movements of Henry Clay. "I am already so wearied of it," Seward wrote, "that, if left to myself, I should withdraw instantly and forever. I am ill-fitted for competition with brethren and friends. But with a clear conscience and greater magnanimity than there is manifested toward me, I shall go safely through all this storm."[9]