Banking, then and now.


Here is an exceprt from Sandra F. VanBurkleo’s (1989) “The Paws of Banks”: The Origins and Significance of Kentucky’s Decision to Tax Federal Bankers, 1818 – 1820: 

Plainly, the disorganist drive against “financial princes” was broad-gauged, infused with Real Whig fears about authority’s tendency to eradicate liberty, and predicated upon pastoral as well as Lockean conceptions of necessary relations between actual possession and improvement of real property, claims of right and public morality. Just as clearly, Kentuckians sought “relief’ (or, as a Louisville editor put it, a “work of redemption”) in ordinary exercises of the assembly’s remedial powers-the corrective traditionally employed by British parliamentarians when magistrates wielded power without consent. It was inconceivable that rights delegated by the sovereign in good faith and then abused by would-be “LORDS” sitting in “dark divan” might be irretrievable, or that provisional delegations of power, as if by alchemy, had been transformed into property rights equal to the “primitive rights” of freemen.

Nor did disorganists emphasize the Second Bank; instead, the problem seemed to be the “[m]onstrous depravity” and ungenerous fraud” perpetrated by all of Kentucky’s financial “princelings,” and (more fundamentally) a “rotten … main spring”–a republican polity grown complacent about its peculiar susceptibility to “pride, LUXURY, and avarice,” thus inviting enslavement by men more clever than virtuous. On the one hand, the “disease” of banking was endemic: “Every mail brings me an account,” wrote “S. L.,” “of some corruption in banks, from the great Mammoth in Philadelphia, to the petty insects of many petty towns. . . . Point to a town where a bank is located, and you will then see a distressed community. This was not the condition of the country previous to the introduction of banks.” Kentuckians simply had not foreseen, said another disorganist, that banks would fall into the hands of “pseudo politicians and unprincipled speculators,” or that they would breed a “set of licensed gentry” exercising “vested discretion” against community interests. Still, participation had been voluntary: Kentuckians, wrote “Franklin,” eagerly had embraced an “era of speculation, when we indignantly threw aside the homespun and republican virtues by which our fathers prospered, to ape the manners, the fashions and the follies of European courts'” (470-471).

What strikes me is that this could have been written, ideologically, about the great recession too! Indeed, the government didn’t bail out banks back then!  So where is the median voter now? How has the system, ideologically, changed?

Work cited: Sandra F. VanBurkleo’s “The Paws of Banks”: The Origins and Significance of Kentucky’s Decision to Tax Federal Bankers, 1818 – 1820. : Journal of the Early Republic, Vol. 9, No. 4 (Winter, 1989), pp. 457-487.


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