To return to the time of the twenties. The new, hopeful country kept having booms in spite of bad money. After the close of the war of 1812-15, “blessed peace,” said Matthew Carey, “came and brought two thousand merchant buyers to Philadelphia.” Fortunes were made. It was funny as a circus. The brokers stuffed the United States treasury full of shinplasters, not good thirty miles from home. Congress said “resume” in 1817. Banks said, “Go to the devil.” With twenty-two millions “on hand,” Congress had to borrow half a million to keep house on. The big bank was given over to favorites, bribery and corruption, but ruled the land. There was a whirligig between the branches of the big bank and the little banks. The latter bought, with their red dogs, from the branches, drafts on Eastern cities. The drafts bought European goods. Meanwhile the branches socked it to the wild-catters up to five and ten per cent. a month, till they redeemed their red dogs with the proceeds of another crop.
In 1818 the president of the big bank resigned when it was near ruin. A new president, Cheves, saved the bank, in the Bank of England fashion, by ruining a lot of small banks and merchants. In 1820 came “stay laws” and a “relief system.” Men could redeem their lands and negroes in two years by paying ten per cent. down. North Carolina had an awful time. Robber bankers of Newbern became the practical owners of the State and sucked its blood. Were ruling still in 1833.
In 1825 the great Nick Biddle took the presidency of the bank, and ran the whole country, till knocked out by Jackson. Biddle was the biggest boss yet; moved crops; lent ten millions at a time to the government. Some thought he gave the rising sun a boost. When there was a run, he only allowed his branches to cash their own drafts. In 1832 was high water time for this fine old Philadelphia gent. President Jackson, who hated all undemocratic high kicking, made him pay the government debt from his government deposits. Jackson stopped the abnormal boom in wild lands by his “specie circular,” ordering only specie to be taken for United States lands. Then, to check the torrents of extravagance, he ordered the useless thirty-seven millions that he had foolishly put in State banks distributed back to the people of the States. The wild-catters paid eighteen millions, and then all broke, beginning in New York in May, 1837. That was a grand smash. Jackson had a glimpse of the greenback remedy in his muddled head. Jefferson and Calhoun always had it.
Parallel with all this was the Mississippi tomfoolery of 1830 to 1840. That State borrowed thirty millions on the old personal note plan from Holland, and fooled it away in ten years. Slaves were then the only good assets. These were run off to Texas, and “Gone to Texas” (G. T. T.) was a familiar inscription.
The College Professor and the Facts.
Prof. Laughlin of Chicago University said in his recent speech before the Sunset Club and the Bankers’ Association:
“It seems to me that one of the greatest misfortunes that this country ever suffered was that temporary, and to the present time lasting, intoxication connected with the issue of United States notes or greenbacks. From the foundation of our government, in 1789, to February, 1862, the United States government never issued any paper money.”
The Chicago Herald of December 10 voiced the same falsity thus:
“In fact, the government never did anything of the kind until 1862, when Congress authorized an issue of legal-tender notes.”
Are these men simply reckless liars, or are they ignorant of the facts? Here are the facts: From 1812 to 1860 U. S. treasury notes were issued at least twenty times; that is, in every time of emergency, when the bankers’ wild-cat money could not possibly keep business going. These notes were receivable for all debts due the government, including interest on the public debt and custom-house dues; and that fact made them universally acceptable by the people—better than gold. In these respects they were better than the greenbacks; for never until the infernal exception was put upon them, in 1862, did the government refuse to receive its own treasury notes.