The Empty Chair, Part 2: The Wisconsin Territory and the Panic of 1837

In 1830 the Federal Government, with the passage of the Indian Removal Act, made a monumental decision to expand the land available for settlement and farming in the United States. Native people of the Cherokee, Creek, Chickasaw, Choctaw, and Seminole tribes, along with others, were forced off their traditional lands located from Michigan to the Gulf of Mexico. The were relocated to land west of the Mississippi River. This is the time of the Trail of Tears. This grossly immoral act uprooted people who had lived on those lands for thousands of years, land that was a part of their spirituality and their identity. Today they still live with the effects of this tragic decision.

By 1833 the Michigan Territory covered what are now the states of Michigan, Wisconsin, Minnesota, Iowa, and the eastern parts of North and South Dakota east of the Missouri River. The Wisconsin Territory was set apart in 1836, and the Iowa Territory, a part of our story, was formed in 1838. Iowa became a state in 1846. With the establishment of the territory the region was opened for the purchasing of land. The sale of land took off and shot up like a rocket. People left the Northeast and the formerly westernmost states of Ohio, Indiana and Illinois to find cheap land in the new territory. The growth in the region was uncontrolled and at times chaotic.

Burlington was the gateway to the Michigan/Wisconsin/Iowa Territory. Now at the southeastern corner of Iowa it was first settled in 1833 when the territory was first opened. Very quickly it became the first stop for anyone looking to settle in the vast region. Stores opened, selling provisions for the journey inland. Burlington itself was little more than a collection of log cabins and a few more permanent structures. It experienced a constant flow of people passing through, some staying in town, but most moving on. In some cases people would be found face down in a ditch after a hard night at cards or a drinking binge. Burlington was also a good place to become seriously ill. There were waves of smallpox and cholera, and undefined fevers called “bilious” fevers that were probably viral in nature.  It had the feeling of a rough and ready frontier town. There was no local governmental authority to keep order so residents simply did what they wanted. In 1836 the first Wisconsin territorial legislature sat and began to establish laws to govern the territory.

When the Michigan Territory was opened for land sales it was assumed that the majority of buyers would be families looking to relocate, but speculators, looking to make a quick profit, swooped in and started buying up huge tracts of land for resale. They paid for it with specie, paper money issued by state banks that was not backed by hard cash, but by land. Eventually the government saw through this and in 1836 President Andrew Jackson signed the Specie Circular, an executive order that required buyers to pay in gold or silver for land. The idea was twofold: to reduce the exponential growth of the use of specie in the economy, and to make it more difficult for speculators to buy up large tracts of land. 

The Panic of 1837 reached a climax on May 10, 1837 when New York banks ran out of silver and gold coinage and would not honor specie at full face value. Being based on the inflated value of real estate, the bottom fell out of the specie market. When this happened, prices for many things deflated. The economy did not recover until 1844. Manufacturers and merchants in Connecticut, New Jersey, and Delaware were hit especially hard by the financial upheavals, and many businesses failed.

Economic historians differ on what caused the Panic of 1837. Some see the Specie Circular as the cause, others look to links with British investment in American interests. The Specie Circular would have been a factor, although how much is still open for debate. What happened, though, is not. The value of specie plummeted and New York banks would not redeem it at face value. On May 10, 1837 the New York banks stopped honoring specie and there was a rush on banks. What resulted was a depression that lasted until 1844. Andrew Jackson was blamed for the disaster. The copper token below is one of many that substituted for US coinage when the disaster struck. One side has a phoenix rising from flames and the inscription "SUBSTITUTE FOR SHIN PLASTERS NOVR. 1837" and the reverse has the inscription "MAY TENTH 1837. SPECIE PAYMENTS SUSPENDED". "Shin plasters" was a derogatory term used for paper money in denominations less than a dollar. It came to mean something that was worthless.

1837 token used as a substitute for a US penny

1837 token used as a substitute for a US penny

 

 

 

 

 

 

 

Horace Greely, editor of the New York Tribune, placed the blame squarely with Andrew Jackson:

…General Jackson retired to his Hermitage, congratulating himself that he left the American people prosperous and happy. Never was man more mistaken. He had just before pointed to the immense sales of public lands, in 1835-36, as proof of increased and general addiction to agriculture, when, in fact, it proved only a plethora of currency, and a consequent high-ride of speculation. At length, convinced that something was wrong, the General attempted to dam the flood by a “specie circular, “ prescribing that only coin should thenceforth be received as pay for public lands. This device precipitated the catastrophe it was intended to avert.  ( Horace Greely, Recollections of a Busy Life (New York, 1869), p. 122)

The tide of migration to the west increased as people found themselves destitute. In the first issue of the Wisconsin Territorial Gazette (July 20, 1837) this assessment is found of the attraction of the west:

Emigration in the Far West.—In the letter from Wisconsin which we published a day or two since, it was mentioned that government land in that region at the low price of $1,25 per acre, and it is not long since it was stated that land in the city of Detroit had fallen from the high estimate which had been placed upon it and could be obtained at reasonable rates.  For some years past the tide of emigration has rolled strongly and rapidly toward the west, but it has been impelled by a spirit of speculation rather a sober desire of finding a place where a subsistence of a competence might be obtained.

The flow of emigration has not yet slackened; on the contrary, from the recent convulsions in the mercantile and manufacturing districts, which have deprived merchants and manufacturers of their fortunes and mechanics and operatives of the means of gaining bread, an immense accession has been made to the number of those who are looking to the far west for a home, and a region where they by patient toil and industry gain a livelihood if not retrieve their fallen fortunes.  Though there are yet some who dream of golden harvests from western speculations, the great body of those who are now turning their faces towards the West are animated by far different feelings.——They leave cities which can no longer give them support, and towns where the hand of want and distress has fallen heavily upon those whose handy work had heretofore been a fruitful source of support, and seek those broad and fertile regions where the toil of the farmer will be rewarded by the generous crops of a new, and heretofore unbroken soil.

1837 political cartoon blaming Andrew Jackson for the depression

Not everyone saw emigration as a good thing. The Feb. 4, 1837 issue of the Columbian Register reprinted an editorial from the New York Express on the subject of preemption. A bill was passed in Congress in 1830 that allowed squatters who were living on federal land when the land became available for sale to have first refusal on the purchase of the land for $1.25 an acre. Many protested this policy because it circumvented the whole process of someone buying the land through established channels. The writer of the editorial saw this policy as an easy way to encourage people to leave their homes in the Northeast and emigrate to the territories, thus depleting the workforce:

 

If Connecticut does not call to account her Senator for his treachery, and ask him why he has given this bribe to her people to leave their homes and emigrate to the West, she has lost all that sagacity with which the world is crediting her……If New Hampshire ever asked a question—but New Hampshire does not —she would demand “why do ye so?”  It may be, however, that New Hampshire at last recognizes the sentiment of Jeremiah Mason, of Boston, when toasting his own native State— “New Hampshire—(a pause, and with feeling,) —New Hampshire, a noble State to emigrate from,” and hence this Bribery Bill to tempt her citizens in scores to run away from home. 

It isn't surprising that with the economy in a shambles people would look for a fresh start in new territory. Partrick Lewis eventually took the gamble. After the disastrous foreclosure on most of his property pool he remained in town. There are no indications of what he did for employment, if anything. At some point it would have occurred to him that there was nothing left in Meriden for he and his family. In January, 1837 he sold his parent’s house for around $250, equivalent to about $7500 in current dollars. Considering he had probably made plans to move to Wisconsin Territory, and could only pay for land from the government in gold or silver, he would need cash in hand.

At a February 1, 1837 political meeting, where Lewis was one of the secretaries, two resolutions were passed that seem out of context, but may relate to his financial difficulties:
 

 Resolved, That whilst we deny all desire or wish in any way to screen the fraudulent debtor from punishment, or of throwing in the way of the creditor any hindrance to the collection of debts—yet we cannot but regard the present laws in relation to the imprisonment of poor debtors as the mremnant of barbarous times yet lingering amongst us—revolting to humanity, at war with Christian principles, and disgraceful to a free an[d] enlightened people.

    Resolved, That we are opposed to the increase of Banking privileges in this state—to all chartered monopolies and to all exclusive privileges and whilst we admit (under existing circumstances) that banking, if fairly and honestly conducted, may be and no doubt is, of advantage to many—yet we would not on this account shut our eyes to the evils and abuses growing out of the system, but believe a strict and rigid examination called for—and where-ever it shall be found that any banking company have denied accommodations to citizens of our own State for the purpose of obtaining a greater per cent incerest [interest] for the use of their money from the citizens of other states—thus showing that money making, and not the accommodation of the public, is their governing purpose, it should be considered as it in fact is, a virtual violation of chartered privileges, and for such conduct they should be deprived of their charter. (Hartford Times, Feb. 11, 1837)


Advertisement in the May 14, 1836 Columbian Register

 

 

After that he made plans to travel to Wisconsin Territory (Burlington, now on the Mississippi River in Iowa) to get a new start. He would have easily followed the development of the territory as most newspapers carried to latest actions of Congress and the President. The Columbian Register (New Haven), for instance, published a summary in its Saturday, Aug 27, 1836 issue of an act of Congress that set apart the towns of Fort Madison and Burlington in Des Moines County. Columbian Register. Many people went west ahead of their families. They would go out, get some land and get established, and send for their family when things were settled. It didn’t work out that way for him. The window for his time in Wisconsin (now Iowa) is rather short. He was present at the meeting of the local Democratic party convention in Branford, Connecticut on February 1.  After that time I can’t track his movements at all other than his death on June 13. A lot happened between those dates. 

Next time I'll look at what happened to Partrick Lewis in Iowa, based on my recent research trip there.