Wednesday, February 23, 2011

Abraham Lincoln's Bank War, or Whigs Leaping out of Windows

Randall Stephens

Everyone now knows the story of how Wisconsin state senators stopped the wheels of government, for a moment at least, by getting out of the state. Over at the the Chicago Tribune Eric Zorn points out another such instance ("As a State Legislator, Lincoln Tried to Play the 'Run Away' Game, too," Chicago Tribune blog, Feb 21, 2011). In 1840 Lincoln and the Illinois Whigs tried the same exit strategy against the then-dominant Democrats. (Zorn quotes from Gerald J. Prokopowicz's book on the topic.) The Whigs hoped to build canals and railroads throughout the state. And then the Panic of 1837 set in. The Democrats and the Whigs squared off on the matter of the Illinois State Bank. What transpired played out some of the national themes of the Jacksonian era.

A bit more on it from Alexander Davidson and Bernard Stuvé, A Complete History of Illinois from 1673 to 1873 (Springfield, 1874), 423.

Parties in Illinois became almost divided upon the subject of the banks. Nearly all the leading democrats opposed them and the acts legalizing their suspensions, although they were authorized and their capital stocks were increased irrespective of party. The whigs were called bank-vassals and rag-ocracy, and charged to be bought and owned by British gold. The bank officers were sarcastically denominated rag-barons; and the money was called rags and printed lies. The whigs retorted that the democrats were disloyal, and destructive of their own government; that the banks were the institution of the State, and to make war upon the currency was to oppose its commerce and impede its growth and development. Although parties were in a measure divided upon the banks, with the democrats largely in the majority, this was not without benefit to those institutions. It gave them unswerving friends. Besides, the merchants and business men of that day were, with rare exceptions, whigs, who gave currency or not to the money as they pleased. Partisan zeal led them to profess that the banks were not only solvent, but that they were unduly pursued, and that the opposition to them was nothing but absurd party cry.

When the suspensions of the banks was legalized again in 1839, it was to extend until the end of the next general or special session of the general assembly. The legislature for 1840-41 was convened two weeks before the commencement of the regular session to provide means to pay the interest on the public debt, due on the first of January following. . . . The democrats now, however, thought that their time of triumph had arrived. It was by them contended, that that portion of the session preceding the time fixed for the regular session to begin, constituted a special session, and if the suspension was not further extended, the banks would be compelled to resume specie payment on the day the regular session should begin or forfeit their charters and stop business. Upon the other hand, it was contended that the whole constituted but one session. Much party animosity was, besides, manifested at this session. The fate of the banks seemed to hang upon the motion pending to adjourn the first part of the session nine die. It was perceived that the motion would prevail. To defeat it in the House, the whigs now essayed to break the quorum. But the doors were closed, a call of the House ordered, and the sergeant at arms sent in quest of the absentees. The whigs, being thus cut off from the usual avenues of retreat, bounded pell mell out of the windows, but without avail—enough were held in durance to make a quorum, and the sine die adjournment was carried.

1 comment:

dan allosso said...

This is really interesting, Randall. I've been becoming very curious about the way changes in banking laws in the middle of the 19th c. affected people in the countryside. Most of my sources are from the years just before and after the Civil War. Looking at Lincoln's relationship with banks in the prior Panic (as well as Salmon Chase's, and maybe Seward's too) might help me figure out what preconceptions they brought to their decision process in the 1860s.