Van Burkleo ,Sandra F. “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
The BEST excerpt:
and those who command it will command the government; if the elective franchise so far from controling its organized influence, will be controled by it; if the banking interest is not the public interest, … [but] has the control of this interest; let all history answer the question, whether a government thus controled operated upon and directed, will be managed for the benefit of the many or the few; for the general or the particular interest? (467, misspelling in original).
“These observations betrayed a shrewd reading within the disorganizing faction of the mechanism by which bankers, in the vacuum created by electoral ‘passivity,’ had become ‘LORDS OF THE SOIL.’ With other Kentucky spokesmen, Bledsoe perceived in bank charters a disquieting, exceedingly dangerous delegation of liberty; legislators unwittingly had created an unsavory, extraconstitutional magistracy eerily reminiscent of ‘oligarchies’ in ancient Rome or Britain. Bankers, after all, relied upon legislative grants of ‘exclusive privilege.’ These delegations of sovereignty struck Bledsoe as antithetical, by virtue both of statutory prohibitions against unlicensed banking and of the assembly’s promise within charters to continue law-abiding banks for twenty years, to the citizens’ right to enjoy ‘common privileges’ emanating from natural law-among them, the right to deal autonomously in money.
“What might be done about these inadvertent delegations of historic right? Bank-making to provide a circulating medium was one thing, and slavery quite another; without specific voter instruction, past legislatures had no authority to alter the nature of the political order, and it had been this way for the better part of twenty years. Step by step, Bledsoe threaded his way toward a solution: was it not true that republicans before the advent of banking corporations had been free to form ‘unchartered associations or banks-the only kind that ought to exist?’ Had not banks garnered the power to ‘coin money, which coin they can issue or withdraw, or debase to nothing, at pleasure?’ How could a non-elective magistracy, contrary to the provisions of state and federal constitutions, ‘tax the people’ and ‘control government’? On what ground had lawmakers usurped the citizens’ ‘natural right’ to deal in money and lodged it in ‘financial princes’? Had they not vested bankers with ‘false sovereignty’? Bledsoe’s remedies were disarmingly simple: to regain prosperity, Kentuckians would have to renounce ‘luxury’ and extract wealth from the soil. To preserve freedom, lawmakers would have to revoke bank charters and issue currency backed by the treasury. Revocation not only would restore the ‘natural right of banking’ but also would preserve the citizenry’s ability to control delegations of authority and punish tyrants at the polls.
“To drive the point home, Bledsoe offered five bank-smashing resolutions incendiary enough to merit space in the National Intelligencer. Having asserted, first, that any ‘monied monopoly’ was ‘hostile to republican liberty,’ he then:
RESOLVED, that banks are such a monopoly and do not depend for their profits upon the correct employment of the products of industry.
RESOLVED, that as the products of the labor of a nation, are the only genuine sources of national wealth, any corporation which tends to substitute speculation, instead of the proper and valuable fruits of this labor, must be pernicious and ought to be abolished.
RESOLVED, that all banks wherein individuals are interested are monied monopolies, tending to make profit to those who do not labor out of the means of those who do; not tending to increase the means of industry, but to profit of these means unjustly; tending to tax the many for the benefit of a few; tending to create a privileged order, unuseful and pernicious to society; tending to destroy liberty and create a power unfriendly to human happiness; tending inevitably to an unfeeling monied aristocracy more to be…” (467-468).
“What, then, might be said about the origins and significance of Kentucky’s decision to tax the Second Bank? First, the negatives: disorganization was a critically important but passing phenomenon. While aspects of what William Barry termed “an original republicanism” animated relief partisanship for almost a decade, Jesse Bledsoe’s reading of Kentucky’s political legacy barely survived the summer of 1820; indeed, Bledsoe lost his assembly seat after squabbling with constituents over the right of instruction. When confronted with evidence of changes in political economy wholly unrelated to banks, Kentuckians rejected Bledsoe’s selections from within the republican stewpot, made other choices, and fashioned a new “system” predicated mainly upon legal positivism, majoritarianism, and a full-scale war against economic individualism. This is not to say that scholars may safely ignore disorganization” (485).