USA > Pennsylvania > Pennsylvania, colonial and federal : a history, 1608-1903, Volume Two > Part 23
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and the Delaware division of the Pennsylvania canal. A little later he was ready to sell all; and public opinion was moving in the same direction.
We may now turn to other matters. In October, 1839, most of the banks in Philadelphia suspended specie payments, and those in other parts of the State followed their example. The banks generally throughout the Union did likewise, except those of New York city: The suspension came as a surprise to the public, paralyzed business and shook public and private credit. From all classes of the community, save those alone who were interested in banks, was heard a loud and deep condemnation of the measure. Innumerable remedies were suggested, some look- ing to the regulation of these institutions, others to their pun- ishment and extirpation, and the Governor was besought to con- vene the legislature at an earlier day to consider measures for relieving the banks and the people. There were at that time fifty- two banks in the State, with an aggregate capital of about sixty million dollars. Some had been so disregardful of the law con- cerning returns as to make no returns, or such imperfect ones that it was impossible to arrive at anything like accuracy in the amount of their circulations, specie, or debts due to them. Their notes in circulation amounted to thirty-three million dollars and the amounts due to them perhaps seventy millions. "Stocks in our railroads, canals, turnpikes, etc., were held by some of these banks, and in the shape of subscriptions, bonuses or dividends, they contributed largely to the general fund in the State treasury, and to the support of the common school system. Their charters expired at various periods between that time and 1870, and the stock in them was owned by a great number of persons of all ages, classes, conditions and pecuniary means. The capitalists of the country, as well as those of moderate means, widows, orphans and guardians, all own stock in our several banking institutions." Thus the business interests and banking institutions were inti- mately connected together and mutually exerted a powerful in-
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fluence on each other. From one point of view there was a marked difference in the condition of the people at this time from what it was in 1816-18. Then, as now, the country was flooded with foreign goods, which low duties, and credit upon those duties, enabled foreigners to introduce and then create a large debt abroad. Then, as now, the banking capital, banking facili- ties, and bank issues were increased beyond what the necessities of the country for the healthful transaction of its business re- quired. Then the spirit of speculation had infected the agricul- tural as well as other portions of the community; now, however, the farmers were generally out of debt and flourishing; the mer- cantile and manufacturing classes were the principal sufferers by an undue expansion of the credit system. A large amount was due abroad, borrowed for creating banks, canals, railroads, and other purposes, and also by the State. The banks had acted as the brokers on a large scale in negotiating the State loans with foreign capitalists. But the legislatures of the several States had created the loans, and were therefore responsible for furnishing the chief aliment in feeding the credit system. It was no doubt true that the inordinate increase of banks in late years had been partly produced by the immense accumulation of State credits and had, in some degree, stimulated the action of the legislatures of the several States by affording agents to negotiate and cus- tomers to consume the avails of the stock when negotiated.
Until within the last year the State had been able to borrow money without difficulty on State stocks in Europe and to pay the interest arising in former loans by new ones. The people felt no inconvenience from this inflated system of credits and seldom reflected that a day of reckoning would come, when the State could then pay debts no longer. States, banks, corpora- tions, and individuals all moved forward in harmonious union, borrowing all they could and wherever they could, without refer- ence to their future ability and means of repayment. The delu- sion was over at last. State stocks were unsalable, a drug in
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foreign markets, and the State was asked to pay the interest on its permanent loans, and had no means of paying unless specie was exported, "except to rely on the remote avails of our agricultural productions or dispose of more State stock, at a ruinous sacrifice."
The legislature took the matter in hand and attempted to pre- scribe a remedy. So strongly entrenched were the banks in the Assembly, there was no danger of the passage of any of the Gov- ernor's stern recommendations. On the 3d of April, it was re- solved that the banks which did not pay on demand all their notes, bills, deposits and other liabilities in gold or silver coin should forfeit their charters. The Governor in his next message stated that though the day fixed for resuming specie payments was more remote than he wished at the time, yet the period of indulgence had nearly passed away and there was good ground to believe that the banks would be prepared to discharge their liabilities in specie. Should they do so, by continuing strictly to observe the law and fulfilling the just expectations of the public, they might regain the confidence they had lost, and especially if they adopted better regulations. One of the most immediate advantages re- sulting to the community from the resumption of specie payments would be the entire expulsion from circulation of the illegitimate brood of small notes that had been poured in from the neighboring States on all sides in defiance of law and of the most active en- deavors to suppress them. We could conclude without recom- mending that no increase of banking capital be made under any circumstances, and that effectual provision be made by law that if any bank should at any time hereafter suspend specie payments it should be, ipso facto, a forfeiture of its charter. Nothing short of an absolute and unconditional provision of this kind could arrest the frequent over-issues by the banks, induced by the inor- dinate cupidity of those under whose directions they may be con- ducted. But the Governor's hopes were not to be realized. The greatest irregularity still prevailed in the currency. There was not much of that wretched, illegal trash in circulation which dur-
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ing the early part of the last six years had infected all sections of the Commonwealth in the forms of notes, checks, certificates, etc., of corporations and individuals for small sums, put forth without lawful authority and in spite of the prohibition of law, but there was still a large amount of notes in circulation, ostensibly legal, and purporting to be of equal value, because founded on the faith of the State, by whatever bank issued, and yet, notwithstanding this fact. discredited and repudiated by the very institutions for whose benefit and relief they were authorized to be issued.
In 1841 the legislature authorized the banks to issue notes below $5 to the amount of $3, 100,000 as a loan to the State, that were to be used in paying its expenditures, schools, pensions and the like. . By this plan banks were authorized to issue notes to the amount of their respective subscriptions to the loan and pay them into the State treasury, and any holder of $100 or more of them could present them to the issuing bank and when doing so was entitled to an order on the auditor-general for an equal amount of stock. In this manner were they to be redeemed ; meanwhile the banks were entitled to one per cent. interest on them while they were in circulation. They were to be received by the bank that issued them in payment of debts due to it, and on deposit, like currency, and the State treasurer was authorized to re-issue them. The Governor vetoed the bill, but the banks were too strong for him. They succeeded in passing the bill over his veto, and he was compelled to execute the law. "I did hope," he said in his message in 1842, "that some of the evils which have re- sulted from it might have been obviated if it was enforced by me and acted upon in a spirit of enlarged wisdom by the banks them- selves." This hope had been vain. The worst anticipations had been realized. The Governor thought the law ought to be re- pealed, the loan forced, and the banks compelled to begin the pay- ment of specie on the Ist of June.
Governor Porter was not less zealous in trying to restrict the spread of corporations. In his message of 1840 he said: "Let
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the increase of corporations hereafter be limited to cases of un- doubted public utility, where individual capital and enterprise are insufficient to accomplish the object intended, and let the power of the legislature to control or abolish them, be at all times ex- pressly reserved. A system resting on opposite principles must
Frederick Augustus Conrad Muhlenberg
Clergyman ; congressman, 1779-1787, and speaker of the House. Reproduced for this work from an original painting
eventually transfer nearly all the powers and authorities of the legislature, as well as the business of the people, to corporate bodies, and then silently but effectually achieve a revolution in our civil relations ; for if the obligations of men may be converted into those of a limited and artificial nature, instead of a direct personal responsibility, it is manifest that the very elementary principles of society are changed. We shall be constrained under
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such change to reach the citizen, not by the immediate process of the law, but by its clumsy, indirect application to him in an ideal state of existence created by legislation and rendered independent of the usual responsibility of the members of society. This is the condition of things, complicated and clogged by corporate exceptions and privileges, towards which our recent system of legislation on this subject has been hastening us, and at which we shall sooner or later arrive, unless it be abandoned."
Notwithstanding Porter's unflinching opposition to the banks, to every form of wasteful legislation and corruption, to more effective taxation, he was re-elected in 1842 by a large majority. His re-election was a triumph of principle, proof that the people had at last aroused from their torpor and desired a better govern- ment. His re-election was a cause of rejoicing by every honest man having any pride in his State and desire to have it raised from the low place into which it had sunk.
Porter had not served long in his second term when the finan- cial crash came, which he had striven so hard to avert. On the Ist of August, 1843, the State was unable to pay the interest on its debt. Notes for interest were issued bearing five per cent. interest, that were funded years afterward by giving new certifi- cates of stock bearing four and one-half per cent. interest. There was some complaining because the same rate of interest was not paid on these as was paid on the original certificates. They were given five times, in August, 1842, and in February and August, 1843 and 1844. After this the State resumed payment. The relief notes issued by the banks under the law of May 4, 1841, amounted to $2,220,265. These were presented for pay- ment at different times, paid and cancelled. By January 1, 1846, $867,087 had been discharged.
The taxes assessed and collected during the first five years of the law were: 1841, assessments, $523,200; collections, $33,292. 1842, assessments, $663,075 ; collections, $486,635. 1843, assess- sessments, $992,206; collections, $553,911. 1844, assessments,
2-21
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$946,055 ; collections, $751,210. 1845, assessments, $1,300,751 ; collections, $1,318,332. Total assessments, $4,425,289 ; total col- lections, $3, 143,382.
The amount due December 1, 1845, was $873,535. The debt on December 1, 1845, was $40,986,393. The sale of the main line of the public works had been left the year before to the deci- sion of the people, and at the October election they had voted in favor of selling. The people were quite willing to sell the public works for other reasons than a desire to lighten their burden of taxes. Many were now heartily sick of the State's attempt to undertake the transportation business, and were eager for its retirement. They clearly saw that if it continued, wastefulness, fraud, and demoralization would be the inevitable accompani- ments. Last of all, there was a large class who had been con- ducting business on the canals with great profit to themselves and who wished to gain still more by becoming the owners.
Unable to sell them for the price fixed, it was reduced by the legislature. The Beaver division of the Wyoming line on the North Branch, forty-three miles, and the French creek feeder, costing in the aggregate $1,222,927, were given away in 1845, the closing of the first chapter in this miserable business. Meanwhile the committee of ways and means of the House made a final effort to stay the tide and convince the people that the retention of the public works was, after all, desirable. The committee asserted that at the time of passing the act authorizing the sale of the main line, "the public mind was very much excited in consequence of the State debt and the contemplated increase of taxation." The committee sought to show that the works were improving in value and would ultimately pay. Besides, they would then pass into the control of a private corporation, and these "have gener- ally been considered obnoxious to the public weal; their history is one of entire selfishness, monopolizing in their design and results ; they always interfere with the action of individual enterprise, concentrating large amounts of capital, which necessarily oper-
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ates injuriously to the interest of men with small means." After describing the powerful results of permitting a corporation to own the works, then dabbling and interference in politics, they closed thus: "The Commonwealth has been infested with individuals who have been chiefly instrumental in creating this oppressive debt, and have made princely fortunes by the operation ; and now they are willing to relieve the people again by taking the improve- ments off their hands, provided they can get them at their own price. This would be a humiliating state of affairs, and a result that all should deplore. But if they are realized by a vote of the people sanctioning a sale of the main line, it will nevertheless be lamentable ; but as there is no other tribunal to which an appeal can be taken, it must be submitted to." But the people had had enough, and, though the retirement of the State from the trans- portation business was not to come for several years, the system was doomed, and all knew it, and every well-wisher of the State felt somewhat relieved. During Governor Porter's administra- tion, "not a single dollar had been appropriated and paid towards the commencement of any new work whatever ;" and the thoughts of all except those who were fattening on the system were bent on extricating the State from the public works and from the disgrace with which they had covered it.
During Governor Porter's administration serious riots oc- curred in Philadelphia, due to the hostility to the foreign element in the city. A new party had arisen, the Native American, which insisted that only native-born citizens should be elected to public office. This new party held a public meeting in Kensington on May 3, 1844. This was right in the midst of the Irish Catholic district, and the latter attacked the meeting in large force. A second meeting was held there on May 6, when the Irish renewed the attack with bricks and firearms. One American was killed and several were wounded. The next day the Natives held an indignation meeting in Independence square. A number of speakers exhorted to peace, but to no avail. The crowd adjourned
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to Kensington, where a serious conflict ensued, in which a num- ber were killed and others wounded. Although the militia under General Cadwalader appeared in the evening, the rioting contin- ued. Several Catholic churches were burned and other valuable property was destroyed. On May 10, Governor Porter arrived and large bodies of soldiers were called into service, but not until damage had been done amounting to over one hundred thousand dollars.
This spirit of hostility smouldered only to break forth again in July. On the fifth of this month, it was discovered that arms had been taken into the Church of St. Philip de Neri, in South- wark. The people gathered in a large multitude about the church and demanded a search, and a supply of muskets, powder, and cartridges was found in it. The militia was again called forth to protect the place, but the mob could not be controlled. The church was secretly entered at night and fired, but the fire was extinguished. The crowd procured firearms and at one time were in possession of three cannon, which they used both against pri- vate citizens and the militia with deadly effect. On July 8, Gov- ernor Porter was assured that if the soldiers were withdrawn the civil authorities could maintain peace. This line of action was followed and order was restored.
Among the events of Porter's administration an important reform is worthy of mention. In 1842 the Assembly abolished imprisonment for debt. Before that time a debtor who had a judgment rendered against him for more than $5.33 had a right to a stay of execution. An act of the legislature then attempted to secure to his family the articles of absolute household necessity by exempting them from execution, a provision which was very often defeated by the right of another creditor to take the person of the father of a family in execution for a sum less than $5.33. upon obtaining judgment. The family of the unfortunate debtor was then compelled to a forced sale of the articles intended to be protected from execution in order to relieve the person of the
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Richard Butler
Lieutenant-colonel in Revolutionary army and colonel of the 9th Pennsylvania regiment at close of the war; major-general in St. Clair's expedition against the Indians, 1791
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Porter's Administration
debtor, and thus there was a power directly to produce a sale of those articles of essential household convenience which the legis- lature designed to defend upon motives of humanity. In those thickly populated districts where pawn brokers do exist they were applied to to advance money upon clothes, beds, furniture, tools, and kitchen furniture, in order to enable the unfortunate debtor to pay the cost of a trifling suit before a magistrate and avoid a place which should be the receptacle of guilty men and criminals. For the evidence of such we need only recur to the great variety of articles which were commonly advertised for sale at those estab- lishments. These were wrenched from the distress of the poor man's family, to support and supply the means of existence which that odious and cruel law afforded to a magistracy, oppressively numerous, and in many instances too eager to gain advantage of the existence of a fee bill to permit anything to escape that would permit them to charge a fee. In the rural districts these evils were not so frequent.
In Philadelphia, for three years prior to 1830, three thousand and one persons were imprisoned for debt. The poorest debtor only received one five cent loaf daily from the county and had the use of two blankets, some of which were not of sufficient length. The loaf, which ought to have weighed one and one-half pounds, was often deficient in weight. The poorest debtor had nothing but bread, water, blankets, room, fire. As the laws were then, honesty of intention and purpose had no preference over roguery. The rich villain who was a rogue in a transaction of thousands of dollars could then, as now, obtain bail, appeal, or escape; but the poor man, for a debt of one dollar, was dragged before a magis- trate, no bail, thence to prison, there to mingle with those initiated in various tricks of fraud, to return upon society with the impres- sions there received and, at the least, a disgraced man, smarting with the wrongs inflicted upon him by his fellow men.
Governor Porter's administration had been stormy from the beginning to the end-a long, incessant conflict with the legis-
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lature. He resisted the encroachments of the legislative branch of the government on his own prerogatives. He regarded his own office as an independent, co-ordinate branch of the govern- ment, and in a message to the Senate he said: "Claiming to un- derstand and respect the rights of the senate, I shall studiously avoid any infringement upon them; and claiming also to under- stand the rights and. duties of the executive under the constitution, I shall take special care that they shall not be invaded and will maintain them to the best of my abilities. Independence and harmony of action only can be preserved by strictly observing the rights of all departments of the government." Governor Porter's whole administration was guided by this spirit of firmness and determination. On this account, he frequently made political enemies ; indeed, his opponents even went so far as to attempt to impeach him. In 1842, a specific charge was made that he had 11sed his influence to secure the passage of the resumption act of 1840. A legislative committee was appointed to examine into the charges, and after hearing much evidence the whole proceed- ings were dropped. Political passion finally subsided, and when the Governor retired from office it was with the proud conscious- ness that he had served the State courageously and well.
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CHAPTER XV.
SHUNK'S AND JOHNSTON'S ADMINISTRATIONS-1845-1852
G T OVERNOR PORTER was succeeded by Francis Rawn Shunk, whose father had emigrated from the Palatinate in 1715, and finally settled at the Trappe in Montgomery county, Pennsylvania. Here Francis was born on Aug. 7, 1788. As his parents were very poor, he was unable to obtain from the schools even the rudiments of an education. When not more than ten years of age, he was regularly employed on the farms in his neighborhood. By his untiring industry, however, he ac- quired much knowledge, and he became a teacher when only fif- teen years old. Between 1803 and 1812, he was employed during the winter months as master of the village school, while during the summer he continued to labor on the farm. In 1812 he was appointed to a clerkship in the surveyor-general's office, and while thus employed he had an opportunity to take up the study of law with Thomas Elder, Esq., of Harrisburg. In 1814 Shunk enlisted in the defence of the city of Baltimore, and on re- turning was appointed clerk of the House of Representatives of Pennsylvania. He filled this office for a number of years with great ability, and afterwards became secretary of the board of canal commissioners. In 1838 Governor Porter appointed him secretary of state, and on retiring from this office he began the practice of law in Pittsburg.
In 1844, Shunk was elected Governor of the Commonwealth, and his term of office almost coincides with that of James K. Polk
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as President of the United States. In the second year of his governorship, the United States became involved in war with Mexico. The President was authorized to employ the militia and to call into service fifty thousand volunteers. He requested Governor Shunk to have six regiments of volunteer infantry en- rolled, and held in readiness for muster into the service of the United States. The term of enlistment was for a year, or until the end of the war. The feeling of patriotism ran high; for within thirty days, ninety companies, or sufficient to fill nine regiments, offered to serve. On December 15, 1846, the first regiment of volunteers was organized at Pittsburg; while on January 5, 1847, the second regiment was ordered to rendezvous at the same place. These regiments were commanded respective- ly by Colonels Wynkoop and Geary. The State afterwards mus- tered several additional companies, and all the troops that went to the front made a valiant record in the hard fought battles from Vera Cruz to the City of Mexico.
During Shunk's administration, the economic condition of the State was greatly improved. The financial storm had passed by and men were recovering from their reverses, while everywhere prosperity was visible. The State was paying interest on its debt, and the revenue was sufficient to meet all expenditures. The failure to sell the public works on the conditions prescribed by the legislature led to their continued ownership and management by the State. The income from this source improved somewhat ; but not much, and public sentiment was apparently in favor of continuing the experiment. The banks were clamoring for more charters; but the Governor was steadfastly set on limiting the number. He did, however, consider the expediency of es- tablishing a system of free banking,1 which was in operation in some of the States. One great merit of this system was that it prevented special legislative grants. After examining every fea- ture of this free banking plan, the Governor opposed it, and he
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