USA > Kentucky > History of Kentucky, Volume II > Part 23
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In certain parts of the state there arose about this time the old anti- bank sentiment, which held that all banks were monopolies, designed for the benefit of the few. This feeling may have played a slight part in the defeat of a very unusual banking scheme presented to the Legislature about this time. This was what was known as the "South Western Rail Road Bank," and was to be an adjunct to a railroad projected from Charleston, South Carolina, to Cincinnati.93 The plan was to have the
88 The Northern Bank of Kentucky was relieved by this law of forty-nine suits that had been commenced against it for its refusal to pay specie. Kentucky Gazette, Feb. 8, 1838.
89 Kentucky Gazette, Dec. 7, 1837.
90 Ibid., April 12, 1838; Collins, History of Kentucky, I, 42.
91 Ibid., Dec. 6, 1838.
92 Kentucky Gazette, Oct. 10, Dec. 5, 1839.
93 This railroad will be discussed later.
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mother bank in Charleston and branches in North Carolina, Tennessee and Kentucky, and the purpose was to produce a uniform circulating medium, which would be needed in the regions traversed by this rail- road. It was to be allowed to issue notes to an amount not over twice the capital. Kentucky was offered a bonus of 50 cents or more on the $100 capital.94 This project was first presented in 1837, and two years later the most determined fight was made to push it through the Legis- lature. Col. C. G. Memminger, a special commissioner from South Carolina, spoke to both houses. The debate on this question was one of the most remarkable in the history of the state. Hostile interests in Louisville, a general dislike of South Carolina since the times of nulli- fication, the entry of a foreign bank and a railroad into the state at the same time and inextricably connected, and certain rivalries among certain cities over the railroad itself-all conspired to finally defeat the measure. Three bold efforts were made to push it through the House. but it was defeated by a vote of 49 to 48 the last time; however, in the Senate it was passed, 19 to 18.95
The stigma of having produced a panic was immediately fastened on the democrats, and it was a load they were unable to shake off. The distempers of the times were working mightily for the whigs. What more argument could be desired than to merely point to the desolating results of democratic rule, which not only all saw but also grievously felt? In Kentucky the whigs had cause to rejoice early, for, in the con- gressional election of August, 1837, when the panic was being more sorely felt, the people rose up and defeated every democrat except one. They also sent a large majority of whigs to the House and Senate at Frank- fort. It now became a more or less settled fact that the state elections should result in whig victories, and at times they ceased to attract much attention. The August campaign and election in 1838 was very listless. The gubernatorial campaign in 1840 brought about a recurrence of action and enthusiasm, and it was rather vigorously fought out. In the na- tional campaign the democrats were on the defensive, but in the state contest they attempted to force the fight on the whigs. Just as the dem- ocrats could not escape the charges of having ruined many people by a panic throughout the nation, so the whigs, who were now in control in the state, could not wholly dismiss the accusations that they had aided hard times in the state by their unwise measures. This constituted the chief strategy of the democrats. Divorce state campaigns and measures from the nation, and they would be able to attack the whigs with better chances of success. "We see no good reason," declared the Kentucky Gazette, "why the division of parties in national politics, should control our State elections. * * * It is anti-republican and inconsistent with our complex and confederated governments, State and National, to con- solidate and amalgamate State legislation with National legislation, and to declare the entire subserviency and subordination of the State gov- ernments, in all matters, to the General government." 96 John B. Helm. democratic candidate for lieutenant-governor, asked: "If we continue to regard State measures and policy as unworthy, must not the State Governments soon sink into insignificance?" 97 The whigs were charged with having run the state badly into debt with their grandiloquent schemes of vast internal improvements, which were now held up because the state treasury was empty. Helm, who took a very active part in the campaign, exclaimed: "May we not hope that Kentucky will stop short in her hazardous march under the credit system and return to her orig-
94 Kentucky Gazette, May 23, 1837.
95 Collins, History of Kentucky, I, 43; Kentucky Gazette, Jan. 17, 1839.
96 Kentucky Gazette, July 16, 1840.
97 Aug. 1, 1839.
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inal principles of republican simplicity ? Absorbing joint stock companies surrounded with privileges denied to the people at large, and splendid and gigantic undertakings to benefit favored districts, are better suited to monarchies than republics." 98 He begged the people to turn out the whigs for their inefficient leadership, so eloquently proclaimed by the hard times all over the state.
In the national outlook, the whigs had no reason to complain. All signs pointed to a whig victory in the Presidential election of 1840. Clay had high hopes of receiving the nomination, and the Kentucky whigs were not less anxious. But in the Harrisburg Convention, held in December, 1839, he was grievously disappointed, for Harrison, with the wily Thurlow Weed as his party manager, was nominated after a short contest. This was Clay's great opportunity, and he had missed it. The whig party owed more to him than to any of its other leaders, and now, when it bid fair to elect a President, it robbed its maker and benefactor of that honor. Well might Clay have felt keen disappoint- ment at this ingratitude. But Clay was a Mason, he had spoken against the fanaticism of the abolitionists, and he had already been defeated twice for the Presidency-these things had their weight. It was a fore- gone conclusion that Van Buren would be renominated by the demo- crats, and so he was, in the Democratic Convention in Baltimore on May 4, 1840. Although the Kentucky whigs felt aggrieved that their favorite son had not received the nomination, they did not "sulk in their tents." They had begun early to push the fight, with hard times as the chief weapon. Governor Clarke had declared in 1837 that the democratic panic had been produced by the destruction of the United States Bank and that the best remedy was to embrace the whig doctrine and rechar- ter a national bank.99 Shortly afterwards the whigs pushed through the Legislature a set of resolutions declaring that Jackson and Van Buren had produced the financial ruin that was staring the people in the face and that the specie circular and the removal of the deposits were con- spicuous items in the list of democratic crimes.100 One of the most enthusiastic national campaigns in the history of the country was soon inaugurated, which was not devoid of excitement in Kentucky. Hard cider, log cabins and coon-skins were in evidence at the whig meetings, and "Tippecanoe and Tyler, Too," were sung with enthusiasm. "Tip- pecanoe Clubs" sprang up all over the state, where young voters were instructed in their first duty to their country. Crittenden stumped the state for Harrison, rousing the people from the mountains to the Jack- son Purchase.101 The cause of the democrats seemed hopeless, yet they carried on the fight as best they could. "Democratic Associations" were set up to combat the "Tippecanoe Clubs" and efforts were made to show that Harrison was an abolitionist and that the whig party in the North was an abolition throng-a charge that later became a fact and forever destroyed the whig party.102 Confident that they would win, the whigs did not deny the democrats the joy of firing their pet salute on January 8 (1840), with the provision that the cannon captured at the battle of the Thames should be used and that the good whig governor alone do the firing.103
The gubernatorial election in August spelled the doom of the demo- crats in November. Robert P. Letcher, the whig, beat Richard French. the democrat, by an overwhelming majority in by far the largest vote Kentucky had ever polled up to this time. His majority was over 15,000,
98 Ibid.
99 Kentucky Gazette, Dec. 7, 1837.
100 Acts of Kentucky, 1837, pp. 353-355. Passed January 27, 1838.
101 Crittenden MSS., Vol. 7, No. 1224, etc.
102 Kentucky Gazette, July 30, passim, 1840.
103 Acts of Kentucky, 1839, p. 295.
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and the total vote of the state was more than 25,000 larger than in the election of 1836. The democrats admitted their severe reverse. Whig excitement now ran high, with meetings being held attended by as high as 12,000 people. It was only a question of the size of Harrison's ma- jority, and in November it came over 25,000 votes strong, which proved to be the largest majority given him by any state in the Union.104 Har- rison's vote was almost as decisive throughout the rest of the country. He received 234 electoral votes to Van Buren's 60. Shortly after the election he visited Kentucky, passing through Louisville, Shelbyville, Frankfort and Lexington, and was given an enthusiastic welcome.105
The rejoicing of the whigs on the inauguration of Harrison had scarcely died down when the old military hero, who had withstood the hardships of many campaigns and battles, succumbed before the tireless importunities of the infesting office-seekers. Vice President Tyler now succeeded to the Presidency, and very soon the whigs saw their victory seriously discounted, if not entirely destroyed. Clay, who had quarreled with Harrison within ten days after his inauguration, soon found him- self in utter disagreement with Tyler, who refused to follow the whig program of rechartering the bank and reestablishing the American sys- tem. These measures were urgently advocated as whig remedies for the lingering hard times, and the refusal of Tyler to support them was viewed as rank treason. The Kentucky whigs, receiving their direction from Clay, pressed the whig program as outlined by their leader. The Legislature passed resolutions favoring the recharter of the bank, and as a thrust at Tyler they called again on the country to amend the Con- stitution to prevent a President two consecutive terms.106 The old Tip- pecanoe Clubs were still continued as valuable assets to the party organ- ization and as especially effective in combatting Tyler.107
The occupancy of the Presidency by a so-called whig could not bring prosperity if he refused to apply whig remedies. But, regardless of national conditions and policies, Kentucky was from local causes soon plunged into a state of depression unknown since the days of relief twenty years before. The tempest that had been stayed by rather heroic measures in 1837, now, four years later, burst with full force upon the state. Court dockets were soon groaning under loads of lawsuits, and the distressed debtors were being sold out of their life-time accumula- tions at frightful sacrifices. Governor Letcher, in his message to the Legislature in December, 1841, called attention to the deranged condition of the currency and deplored the lack of the stabilizing influence of the United States Bank. Trade was greatly handicapped by the absence of a standard medium of exchange, and the banks again stopped specie payment.108 A little later Henry Clay described conditions to Crittenden thus: "There is very great embarrassment and distress prevailing in K., much more than I imagined before I came home. Every description of property, without exception, is greatly depressed, and still declining in value. And, what aggravates the distress, no one can see when or how it is to terminate. Most of our Hempen manufacturers are ruined, or menaced with ruin. Bagging and Rope were never known at any time heretofore to be so low as they now are." He added that imports from
104 Richard M. Johnson, the popular Kentucky candidate for the vice-presidency, made little impression on the Whigs.
105 Henry A. and Kate Ford, History of the Ohio Falls Cities and Their Coun- ties (Cleveland, 1882), I, 288; Collins, History of Kentucky, I, 45.
106 Acts of Kentucky, 1840, pp. 271-275; Ibid, 1841, pp. 301, 302. The Kentucky Whigs were wedded to the idea of a strong central national bank. After the charter of the United States had run out in 1836, it continued to do business under a charter from the state of Pennsylvania. A movement grew up in Kentucky to admit its branches to do business in the state. Argus, March 23, 1836.
107 See Frankfort Commonwealth, Sept. 28, 1841.
108 Frankfort Commonwealth, Jan. 4, 1842.
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India were responsible in part and that a protective tariff should be passed.109
Although the people were hard-pressed, they seemed to be willing to wait for the Legislature to act before calling for extreme relief measures. The great mass of opinion in early 1842 was against unsound methods- such as were still remembered by many. The Frankfort Commonwealth took pride in the state's financial integrity and believed that it would not be endangered: "Kentucky is now ranked among the most solvent states in the Union, and there is no danger that she will forfeit the distinction. She holds to the doctrine of the binding force of contracts, whether the same be individual, state or national, and she will keep her faith invio- late." 110 The amazingly sound state of public opinion was reflected in the following resolution unanimously passed in both houses of the Legislature in January, 1842: "[Resolved, That repudiation] is abhor- rent, both to the government and the people of this Commonwealth, and can never, directly or indirectly, receive the countenance of either; that such conduct would be unworthy the enlightened age in which we live, shocking to the sense of Christendom, a lasting reproach to republican government, and a stain on the American name." 111 The state had ap- parently grown ages in experience during the past twenty years. The Legislature set to work to alleviate the sufferings of the people as far as possible within sound principles. It passed a law, much akin to a homestead law, adding to the list of articles that might not be levied on the following: A saddle and bridle, six chairs, a bedstead with bed and bedding, all turkeys, geese, chickens and ducks raised on the place, one cow and calf, five sheep, and six months' wood and fuel.112
But this and other legislation fell far short of the needed relief. In desperation the people began to raise the old cry of relief and for an extra session of the Legislature to grant it, forgetful of its awful conse- quences in the past. Governor Letcher wrote Crittenden in May, 1842: "The times are hard in this country-very hard-indeed more so than you will imagine. The cry for relief is awful, I can tell you. The press upon me to call the Legislature together has in some degree subsided. but still it breaks out every now and then in a fresh place. My private and confidential opinion is that the next Legislature will have a majority of relief membership. * * I believe the Meeting, requesting a * call for the Legislature, has had the worst possible effect upon the coun- try. The idea of an extra Session has operated as a notice to the cred- itors to hasten their debtors. and this work of destruction is now in rapid progress, and the Lord only knows where it will stop." 113 As the August election for the Legislature approached, numerous meetings were held over the state calling for the old relief system of replevin laws and a state bank like the old Commonwealth bank. Among the counties hold- ing such meetings were Henry, Oldham, Trimble and Lincoln.114 Relief now became the chief issue in the campaign. The leadership in both parties refused to father the movement, with the result, however, that each accused the other of doing so. In fact, the movement had little or no political significance, for people about to be sold out of their homes were likely to give very slight attention to the theoretical prin- ciples of parties or party shibboleths.115
109 Crittenden MSS., Vol. 8, Nos. 1481, 1482.
110 Quoted in Niles' Register, Vol. 61, p. 320.
111 Frankfort Commonwealth, Jan. 4, 1842.
112 Act of March 3, 1842. See McMaster, History of the People of the United States, VII, 47.
113 Crittenden MSS., Vol. 8, Nos. 1467, 1468.
114 Frankfort Commonwealth, April 12, 1842.
115 The responsible leaders of the Democratic party set themselves sternly against the movement; but the Whigs, nevertheless, claimed it was a Democratic scheme to ride into power on. Frankfort Commonwealth, Aug. 16, 1842.
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The Legislature elected in August (1842), had a rather large sprin- kling of relief men, but not sufficiently able or effectively led as to endanger the good name of the state. A number of alleviating laws and amendments were passed which hushed the cry until conditions them- selves began to evolve their own cure. The banks conducted themselves on a very high plane throughout the whole period of these troublous times, accommodating their creditors to the utmost and at the same time refusing to take advantage of unsound methods. The banks resumed specie payment in June (1842). Their credit was never endangered, and the amount of their note issues was kept well within the bounds of sound finance. Their note circulation at this time was about $4,500,000, with more than $1,500,000 held in specie for its redemption. This meant that about $2.85 was outstanding against every specie dollar held, as compared to the average in the New England states of $5.13.116 The most conspicuous example of the soundness of the banks and of the state government was the case of the Schuylkill Bank Fraud. This bank, located in Philadelphia, was the financial agent of the Bank of Kentucky in the East. During 1838-1839 this bank issued fraudulent stocks of the Bank of Kentucky to the amount of 1.300 at $1,000 each and sold them to unsuspecting buyers, pocketing the money. Suit was brought in the Pennsylvania courts which went finally up to the Pennsylvania Supreme Court, where a verdict of $1,343,000 was handed down for Kentucky. But, as the assets of the Schuylkill Bank amounted to only $430,000, Ken- tucky was forced to lose the difference, besides the heavy costs involved in pressing the suit and temporarily the high standing of the Bank of Kentucky stocks. However, the state refused to repudiate payment on these fraudulent stocks and thereby won a still higher position in the financial world, calling forth this praise from the New York Tribune: "While Mississippi, Michigan and Illinois repudiate their just debts, Kentucky has assumed to pay thirteen hundred thousand dollars, for which she never received in value one dollar." 117
Kentucky felt proud of her record, especially so when she saw Mich- igan, Mississippi, Florida and Illinois repudiating debts incurred through primitive banking methods. Governor Letcher set forth the ideal which his state had nearly reached and from which he hoped it would never depart : "Let her be so upright in all her actions, and so discreet in the management of her public affairs, that the humblest citizen she may have, when he crosses the border of the state, shall feel proud to acknowl- edge himself a Kentuckian. May the day never come when he shall be ashamed to own his country !" 118.
116 Niles' Register, Vol. 61, p. 400.
117 Duke, History of the Bank of Kentucky, 64-91 ; Frankfort Commonwealth, May 17, 1842.
118 In message to Legislature, December 31, 1842. Niles' Register, Vol. 63, p. 376.
CHAPTER LIV THE ERA OF INTERNAL IMPROVEMENTS AND THE BEGINNING OF RAILROADS
Rivers, canals and turnpikes were early recognized as the industrial life lines of the state. Without these developments true and permanent prosperity was impossible. What were markets worth if they were in- accessible, and what was all the agricultural and industrial wealth to avail if its transportation to markets was impossible? Bad roads were little better than no roads, and the waters of the streams might run on forever, valueless to commerce, if snags and shallows impeded their progress. Kentucky must not only have roads and waterways, but she must have them good and cheap. It was not so early as pioneer days that some people walked from Maysville to Lexington rather than pay the exorbitant prices the horsemen and stages exacted to carry them over the dangerously rough road, and as late as 1825 the cost of wagon- ing freight over the same route was said to be equal to the expense of bringing it from Philadelphia to Maysville.1 The high cost of transpor- tation was a constant complaint. A Lexingtonian bemoaned the utterly bad condition of the disfiguring streaks called roads across the otherwise beautiful landscape. Wagons could venture out upon them only with a half load, and hauling bulky articles to Louisville or to Maysville cost more than they could be sold for there. He said: "The ruinous price of provisions and wood in every town in the state is enough to open the eyes of any community." The remedy, he believed, lay in state aid.2
A people vigorous and awake to the opportunities for the development of their state could not long neglect so important a concern as transporta- tion. The network of streams should be made useful, and more interest would have to be taken in them and more effort expended upon them than the few acts heretofore passed for "working" them. This wealth of rivers, together with the topography of the state, made canals of less concern-always barring the absorbingly important scheme to render navigation possible around the falls in the Ohio at Louisville. The sys- tem of turnpikes, which was just beginning to appear by the time of the War of 1812, must be vigorously pushed forward. This program soon became the theme of every governor's message to the Legislature from Slaughter down until the era of internal improvements was ushered in. In 1817 the Enterprise, the first steamboat ever to ascend the Mississippi and Ohio rivers from New Orleans to Louisville, arrived in twenty-five days after setting out and thereby completely revolutionized transporta- tion in the West-a consummation of what Nicholas Roosevelt had be- gun when he launched, at Pittsburg in 1811, the New Orleans, the first of the mighty fleet of Western steamers. Governor Isaac Shelby had, in his final message to the Legislature in 1815, suggested the great possibilities that lay in store for the West in this new process of transportation. He predicted a cheaper and more direct commerce for the state and suggested the idea of lending state aid. He said: "The experiments which have been made by the steamboats on the western waters give
1 Letters on the Conditions of Kentucky in 1825, E. G. Swem, ed., 68, 69.
2 Kentucky Gazette, April 10, 1825.
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strong assurance of ultimate success. There has, however, not been a sufficient number of them in operation to enable me to speak with entire confidence. It is believed by many that a sufficient capital has not yet been employed in that line to give the experiment a fair trial. I submit to the information which the General Assembly will possess in its col- lective capacity the determination of the question and whether it should be left to individual enterprise to ascertain its utility, or whether the state should lend its aid in the undertaking." 3
Governor Slaughter in 1817, believing that the steamboats would likely give "a new spring to the agriculture and commerce of the West- ern country," though that "great advantage would be derived from the use of them on our smaller streams, if some practicable plan could be adopted to remove obstructions and improve them." Whether the state should do it, or private companies carry forward the work, he was not prepared to say, but "When it is considered that most of our fertile lands are distant from the Ohio, and that we are dependent on our small rivers for the transportation of the greater part of our surplus productions to market, the improvement of their navigation seems to demand the serious consideration and attention of the Legislature." The condition of the public roads also needed attention, and the present disorganized methods of keeping them in repair ought to be changed.4 Recurring to the ques- tion again the following year, he recommended "placing signboards or stones on the different roads at the crossing of the county line to desig- nate it." This would not only benefit travelers but would be of help to the militia companies in the various counties.5
In response to the governor's recommendations a movement was soon on foot in the Legislature to establish a definite system of aid to internal improvements. A bill appropriating annually $40,000 for the purpose, of improving Green, Salt, and Licking rivers was pushed through the Senate in 1817, but it failed to become a law." Hard times were already beginning to be felt by the people, and they considered it unwise to em- bark on costly projects under such conditions. It was during this time that Henry Clay developed popularly his "American System," which called for national aid to internal improvements.
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