1819 Financial Panic, A Major Depression, Need For Tariffs for Sale

1819 Financial Panic, A Major Depression, Need For Tariffs For Sale

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1819 Financial Panic, A Major Depression, Need For Tariffs:
$295.00

ELIZUR FAIRMAN was born around 1797 in Newtown, CT. He was a postmaster of Hartwick and an incorporator of the Brownville Cotton Factory in Brownville, NY, in 1831.

LUCIUS FOWLER THAYER (1707-1843) was a wealthy farmer in Westfield, MA.

Offering a fine content ALS in which Fairman writes to Thayer describing the consequences of the Financial Panic of 1819, 3 pp, 8 x 12 ½, November 17, 1819. Fairman asserts the necessity of Congress to act with protective tariffs.

“I came to this place on the 14th of SEP...was highly pleased with the country, especially with its rapid and dignified improvements – am sorry however that the inhabitants are so much embarrassed thereby – they made their calculation upon the times of 1816 & 17, when produce of all kinds brought extravagant price & cash too. Upon the fallacious system of policy, they built castles, elegantly furnishing them, with every extravagance of fancied nature-- nothing that eye could form, but what they have in the fallacy of the national policy, giving encouragement to the importation of foreign fallacies, to the authorizing of our numerous manufactories consequently destroying a vast capital, and turning a multitude from employment. We as a nation did not calculate that the foreign powers would so long be at peace, thereby, be enabled to become producers of the soil, heretofore so long consumers of its productions. Now they no longer want our produce, neither have they for the three years past, tho’ they have continually forwarded their stuffs to us, for which they have completely drained the United States of its circulating medium. This my dear friend is the cause of our universal pressure and unparalleled sacrifice. Until the U.S. alters their system of policy by prohibiting foreign stuffs, or laying a duty equivalent to a prohibition, thereby protecting our manufacturers, giving a sure and steady market for our surplus produce, supporting our own government & filling its vaults. I say, and also common sense, that so long as this U.S. do not put the above-mentioned prohibitions into operation, we cannot harm dignified, free, happy and independent people...The enlightened people of this country are compelled to act. The next congress will do something to alleviate the distress of business men...”

Postmark of Cooperstown, Nov. 20. Addressed on the final page, “Mr. Lucius F. Thayer, Westfield, Mass.”

Archival tape repair on final page. Toning and old folds. One small hoe through the third page of text where the wax seal was broken.

In 1819 a financial panic swept across the country. The growth in trade that followed the War of 1812 came to an abrupt halt. Unemployment mounted, banks failed, mortgages were foreclosed, and agricultural prices fell by half. Investment in western lands collapsed.

The panic was frightening in its scope and impact. In New York State, where our writer lived, property values fell from $315 million in 1818 to $256 million in 1820. In Richmond, property values fell by half. In Pennsylvania, land values plunged from $150 an acre in 1815 to $35 in 1819. In Philadelphia, 1,808 individuals were committed to debtors' prison. In Boston, the figure was 3,500.

In New York in 1819, the Society for the Prevention of Pauperism counted 8,000 paupers out of a population of 120,000. The next year, the figure climbed to 13,000. Fifty thousand people were unemployed or irregularly employed in New York, Philadelphia, and Baltimore, and one foreign observer estimated that half a million people were jobless nationwide. To address the problem of destitution, newspapers appealed for old clothes and shoes for the poor, and churches and municipal governments distributed soup. Baltimore set up 12 soup kitchens in 1820 to give food to the poor.

The downswing spread like a plague across the country. In Cincinnati, bankruptcy sales occurred almost daily. In Lexington, Kentucky, factories worth half a million dollars were idle. Matthew Carey, a Philadelphia economist, estimated that 3 million people, one-third of the nation's population, were adversely affected by the panic. In 1820, John C. Calhoun commented: "There has been within these two years an immense revolution of fortunes in every part of the Union; enormous numbers of persons utterly ruined; multitudes in deep distress."

The panic had several causes, including a dramatic decline in cotton prices, a contraction of credit by the Bank of the United States designed to curb inflation, an 1817 congressional order requiring hard-currency payments for land purchases, and the closing of many factories due to foreign competition.

The panic unleashed a storm of popular protest. Many debtors agitated for "stay laws" to provide relief from debts as well as the abolition of debtors' prisons. Manufacturing interests called for increased protection from foreign imports, but a growing number of southerners believed that high protective tariffs, which raised the cost of imported goods and reduced the flow of international trade, were the root of their troubles. Many people clamored for a reduction in the cost of government and pressed for sharp reductions in federal and state budgets. Others, particularly in the South and West, blamed the panic on the nation's banks and particularly the tight-money policies of the Bank of the United States.

The Panic subsided in 1823.

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