#panic of 1837

A cartoon depicting the US financial Panic of 1837 (LoC). "I have no money, and cannot get any work," the man at left laments, as his children and wife plead for food. Two men at right, holding a landlord's warrant, wonder how they will recover any costs.

Frederick Marryat's 1837 visit to America coincided with this economic downturn, which was very evident when he landed in New York City.

My appearance at New York was very much like bursting into a friend’s house with a merry face when there is a death in it [...] The militia are under arms, as riots are expected. The banks in the country and other towns have followed the example of New York, and thus has General Jackson’s currency bill been repealed without the aid of Congress. Affairs are now at their worst, and now that such is the case, the New Yorkers appear to recover their spirits. One of the newspapers humorously observes—“All Broadway is like unto a new-made widow, and don’t know whether to laugh or cry.”

A bit of May 10th history...

1752 - Benjamin Franklin tests the lightning conductor with his kite flying experiment 

1837 - Panic of 1837 - NYC banks fail and unemployment reaches record levels

1869 - The Golden Spike is driven, completing the 1st US Transcontinental Railroad at Promontory Summit, Utah and connecting the Central Pacific Railroad with the Union Pacific (pictured)

2017 - USGS releases report that some glaciers in Montana have receded by 85% in the last 50 years

I find it ironic that the man featured on the twenty dollar bill was a man who hated paper money, hated big banks, and killed the National Bank of America, all of which led to a major recession. Yeah Van Buren got stuck with the mess, but it wouldn't have happened without Jackson pulling funding from the National Bank and devaluing paper currency by buying government land in gold and silver and making inflation go "Whoopee!!!"

Clay’s final dance happened in 1844. The formation of the Whigs’ party, while his creation, did not want to nominate a two-time loser in Clay. In 1836 they ran multiple native-son candidates in a futile attempt to throw the election to the House of Representatives and cut a deal. Interesting men, William Henry Harrison (OH), Hugh Lawson White (TN), Daniel Webster (MA), and William P. Magnum (NC). The Whigs would have been better served running somebody from Pennsylvania Harrison fell just a little over two-percent short of the grand plan succeeding. Four-years later, 1840 the Whigs re-ran Harrison over Clay and fellow general Winfield Scott.

1844 proved to be one of the most crucial in the history of the young United States. Outgoing President John Tyler, formally of the Democratic Party switched allegiances to the opposition Whigs after falling out with the all mighty Andrew Jackson. Disowned not only by the Democrats, Tyler had little support amongst his new allies. Initially the irrelevant running mate on the Whig ticket of the 1840 election of general William Henry Harrison. This sentiment even came across through the campaign’s slogan “Tippacanoe... and Tyler Too.”

Harrison won the election, unseating Jackson’s handpick successor Martin Van Buren. The Whigs rode Jackson’s anti-bank policies directly responsible for the Panic of 1837 to not only the White House, but also gaining control of the House and Senate. The Whigs were the majority entering 1841, poised to reshape America away from the Jacksonian mold and into one of economic centralized strength.

Party leader, Kentucky senator Henry Clay held bitterness towards Harrison and the Whigs he played a role in birthing. Clay had ran for president twice before, losing in 1824, coming in fourth, and in 1832 to Jackson in a landslide. Seen as the candidate of big business, Clay did little to inspire support elsewhere besides industrial hubs in the northeast, Clay wasn’t seen as a formidable candidate even in those territories. Losing New York and Pennsylvania in 1832 to Jackson.

Clay ran for the nomination in 1840 and lead significantly over Harrison and fellow general Winfield Scott after five ballots. Ultimately, party leaders eager to stop Clay managed to combine Harrison and Scott’s delegates together and cinch the nomination for the 68-year-old Harrison.

The Whigs chose Harrison over Scott primarily for the formers’ lack of history in politics, never holding a formal opinion on any issue prior to his nomination. Scott held anti-slavery sentiments and risked alienating southern Whigs. The Whigs were a big tent party. Disorganized to a fault, the only thing they could agree on was they collectively despised Jackson and rebuked his presidency. Some Whigs, like Hugh Lawson White, were more conservative supporting much of Jackson’s policies, even the controversial Indian Removal Act of 1832. Others, such as New Jersey senator Theodore Frelinghuysen spoke passionately against the bill. Speaking on the senate floor for six-hours decrying it in the name of his Christian religion. His party’s nominee, however Harrison, earned his nickname “Tippecanoe” solely because of his victory at the Battle of Tippecanoe in the War of 1812, over Tecumseh’s Confederacy, an alliance of Native American tribes in the Great Lakes reign of the United States.

Still, the Whigs, despite their disunity on a great many issues overcame it all to defeat Van Buren. The Golden Age of the Whigs’ Party seemed immanent. Harrison had promised during his inaugural address to reestablish the bank of the United States, curtail his executive power, which Whigs have felt Jackson overused, and abide by the laws enacted by Congress. Much of this is what Clay had hoped to do as president, including instituting paper money as the national currency, Harrison also expressed a willingness to accomplish. Coming around to the idea that being the puppet master to Harrison was the second best thing to actually being president, Clay was eager to enact his “American System.”

Unfortunately, Harrison grew ill and died just 30-days into his presidency. His successor, the aforementioned Tyler, wasn’t even a Whig, vetoed the creation of a third national bank and infrastructural projects. This angered those in his party, Tyler spent the bulk of his presidency earning the cold shoulder from both sides. A new candidate was to be put forth for 1844, a crucial, if not more so than the election of 1840, as their party leader Clay took up the mantle and aspired for the office that’s alluded him his entire 67-year life numerous times before.

Inside the party, Whigs hoped to run against the unpopular Tyler, but he hadn’t curried any favor from the Democrats. Their second best case scenario was Van Buren. The Democrats didn’t have much of a farm system after losing in 1840 and it looked likely the party would trot out a retread. Then, Dark Horse candidate James K. Polk appeared and with the backing of the mythical Jackson secured the nomination and the race was on. The fresh face of Polk, a proud Jackson disciple versus one of his sworn, long time enemies. For it was Clay in 1824, while not victorious in his election bid, as Speaker of the House maneuvered votes around to give the presidency to John Quincy Adams. Even after Jackson won handily in the popular vote and elector college, it was Adams who strolled into the Oval Office thanks to Clay.

Clay had already paid a steep price for crossing Jackson. Was he to pay an additional charge for conducting what became known as “The Corrupt Bargain,” which ended the “Era of Good Feelings,” brought the rise of the Democratic Party and the tyrant Jackson to dominate the country from 1829 to 1845? Clay could only hope not.

While Polk bolstered a almost jovial embrace of Manifest Destiny, wrapped up in his catchy “54-40 or Fight” motto, in contrast Clay’s slogan for his campaign read like a sneer “Who is James K. Polk?” brought laughs among those already in Clay’s support. Many were enamored with Polk and felt he was the one to succeed Jackson as the protector of the lowly, white farmer. Despite his policies directly leading to the Panic of 1837, many at the time did not blame Jackson for the economic strife, rather his successor. Van Buren intended to get involved and deliver aide to the downtrodden people after the crash occurred, but Jackson urged his protégée to remain firm and let his plan work itself out. It didn’t. And Van Buren’s presidency was sunk just months into it beginning.

Clay lost a great many legislative battles against Jackson and would suffer from defeat at the hands of Tyler. Tyler’s laissez-faire approach did not jive with Clay’s hands on approach to the government.

For Clay, his campaign was about to be centered upon domestic issues. He spoke little about the issue of slavery, the growing push to expand the practice in new territories, and kept the issue of Texas annexation on the back burners. Even as the Liberty Party’s nominee, James G. Birney, am abolitionist surged in the polls in states like New York, Massachusetts and Illinois, Clay did not elect to take a definitive stance on either annexation or the expansion of slavery.

But what-if he did and the people liked it?

Quite a bit, actually. No annexation of Texas through the bloody Mexican-American War. Sweeping under the rug the Compromise of 1850 which strengthened the Fugitive Slave Laws and further agitated the north. Expansion would be halted, the U.S eventually would reach the pacific but through complicated land deals.

How William McKinley desperately tried to avoid conflict with the Spanish in the prelude of the Spanish-America War in Cuba, exhausting every available alternative to fighting a war that’ll only ruin the delicate balance between the two regions. Clay wasn’t as territory hungry as Polk, who seriously considered pushing further into Mexico before stopping after Texas.

You don’t get Texas, you don’t get California and you don’t get Oregon until later, pushing the American Civil War further down the road.

If Clay wins re-election his presidency wouldn’t go down as anything other than the cheery on top of an already impressive sundae. However, if Democratic challenger Lewis Cass manages to unseat Clay then all that transpired under Polk does with Cass - only Taylor isn’t around as he likely to still buy the farm in 1850.

It wasn’t until the election of Abraham Lincoln did the executive branch commit such a power grab after Jackson left the scene. The presidency didn’t have the powers it currently enjoys today. The states and the lower houses were far more important, the president merely acted as an overseer of progress.

Here's an interesting look at Captain Marryat from a different perspective: the politician and diarist Philip Hone, a former mayor of New York City who dined with Marryat in 1837 as he traveled on his American tour, gathering the material for his non-fiction Diary in America.

The lion, Captain Marryat, is no great things of a lion, after all. In truth, the author of "Peter Simple" and "Jacob Faithful" is a very every-day sort of a man. He carries about him in his manner and conversation more of the sailor than the author, has nothing student-like in his appearance, and savours more of the binnacle lamp than that of the study. He appears pleased with the little he has seen of this country, and very desirous to see more; but the bad times will deprive him of much of the attention and hospitality to which his talents and celebrity entitle him.

— Philip Hone, The Diary of Philip Hone, 1828-1851

The financial panic, that is, as recorded by Frederick Marryat in his Diary in America:

My appearance at New York was very much like bursting into a friend's house with a merry face when there is a death in it—with the sudden change from levity to condolence. "Any other time most happy to see you. You find us in a very unfortunate situation."

"Indeed I'm very — very sorry."

Two hundred and sixty houses have already failed, and no one knows where it is to end. Suspicion, fear, and misfortune have taken possession of the city. Had I not been aware of the cause, I should have imagined that the plague was raging, and I had the description of Defoe before me.

Not a smile on one countenance among the crowd who pass and repass; hurried steps, careworn faces, rapid exchanges of salutation, or hasty communication of anticipated ruin before the sun goes down. Here two or three are gathered on one side, whispering and watching that they are not overheard; there a solitary, with his arms folded and his hat slouched, brooding over departed affluence. Mechanics, thrown out of employment, are pacing up and down with the air of famished wolves. The violent shock has been communicated, like that of electricity, through the country to a distance of hundreds of miles. Canals, railroads, and all public works, have been discontinued, and the Irish emigrant leans against his shanty, with his spade idle in his hand, and starves, as his thoughts wander back to his own Emerald Isle.

The Americans delight in the hyperbole; in fact they hardly have a metaphor without it. During this crash, when every day fifteen or twenty merchants' names appeared in the newspapers as bankrupts, one party, not in a very good humour, was hastening down Broadway, when he was run against by another whose temper was equally unamiable. This collision roused the choler of both.

"What the devil do you mean, sir?" cried one; "I've a great mind to knock you into the middle of next week."

This occurring on a Saturday, the wrath of the other was checked by the recollection of how very favourable such a blow would be to his present circumstances.

"Will you! by heavens, then pray do; it's just the thing I want, for how else I am to get over next Monday and the acceptances I must take up, is more than I can tell."

All the banks have stopped payment in specie, and there is not a dollar to be had. I walked down Wall Street, and had a convincing proof of the great demand for money, for somebody picked my pocket.