Despondency and Angst is peaking in America. Multiple movements are mounting opposition to what seems to be Congressional inaction toward the will of the people. Rhetoric is flying in attempts to find or divert fault for America’s ongoing and increasingly unstable financial crisis. Occupy Wall Streeters are organizing in opposition to international banks for their having extracted America’s wealth to China and having bank rolled a transfer of jobs and intellectual capital that would otherwise prosper the United States. A growing majority of Americans are sympathizing with the Occupiers, believing that banks and multinational businesses have corrupted Congress to pass legislation supporting their global aims at the expense of America’s future.
Americans are resigned that bankers and multinational businesses cannot be cajoled to protect our sovereignty over profits. It seems for many that America’s last bastion of hope lies in purging Congress of crony capitalism that weakens its resolve to place America’s interest above special interests. Tea Partiers suggest that if America reverts to strict constitutionalism that we might divert Congress from institutional corruption toward fiscal discipline. However, before concluding that our two-party Congress holds the solutions to America’s crisis, we should review whether there is a historical precedence to place our faith in its salvation.
Congress’s constitutional origin has been under miserable attack. As Roman legislators failed their countrymen, our Congress has taken up their fallen banner in succumbing to modern temptations. Congress fed off the world by deflating our dollar as the world’s reserve currency, and debt funded the selfish altruism of our baby boomer’s Great Society and obsession for military dominance with reckless abandon. Congress also vainly fell prey to Big Business’s courting to go along with legislation that greased the gold rush to China’s 1.3 billion consumer market. In so doing, they gave an inside lane for our elite to prosper from globalization at the expense of collapsing our Middle Class. Strengthening Congress’s will against these temptations seems a lynchpin for correcting America’s troubles, yet Congress has proven that it cannot protect Americans even from being devoured by our own.
An emerging theory is that by reverting to an earlier constitutional construct in history, we might be able to eliminate the power of big business and banking to influence Congress and to minimize Congress’s incentive to indebt America. If that were possible, America could return Congress to its historical role and we could regain America’s Constitutional Republic. Yet, if we look back to an earlier period in America’s history, Congress acted much the same as it has today. In 1811 and the fifty years leading up to the Civil War, business and banking dominated Congress under wildly differing circumstances. Their influence yielded the crippling morals of slavery and a devastating war between the states. If Congress was manipulated 200 years ago to such tragic ends, perhaps reverting to nostalgic fixes to mitigate Congress’s modern ills would end just as tragically.
In 1811, America had grown under the financial eye of the First National Bank and political support of Congress, whose strategy was to build America’s industry under the protection of tariffs to compete with the more highly developed commerce of Europe. By 1811, 87 percent of America’s exports were the South’s cotton and tobacco. The majority of these agricultural products were either processed in New England or transferred to England by American ships out of New York and Boston. This balance of banking, Northern industry, Southern agriculture, and shipping depended on slave labor to supply cotton to England, who employed 20 percent of her labor pool making cloth from America’s cotton. Yet, slavery was a growing abomination among many in America, and this shift in public opinion created a dangerous threat to America’s export engine that Congress counted on to bring back gold and foreign goods to America.
Earlier, in 1803, France’s Napoleon sold the Louisiana Territory to America for $15 million dollars to fund his planned invasion of England. Enraged, England retaliated by instigating insurgence of American’s indigenous natives against settlers, by impressing 10,000 Americans off of American ships to fight on English ships, by pirating American ships for the war effort, and by barring American ships from other ports. As a result, America’s slave supported, export industry was severely damaged and her economy was threatened.
Of the two paths, appeasement and war, America’s Federalist Party supported appeasing sanctions, a strategy that only further harmed America’s export industry. The Democrats favored War and in 1810 elected War Hawks to Congress to push for what became the War of 1812. Senators Calhoun (SC), representing the South’s cotton industry, Clay (KY) representing Kentucky’s tobacco industry, and Webster (MA), representing New England’s shipping industry, were the leaders of the war effort. While they suggested publicly that war must be initiated to salvage America’s honor, these members of Congress were much more interested in salvaging America’s business interests, and certainly were less concerned with the dishonor of slavery.
Nervous about the growing antislavery sentiment and the First National Bank’s growing financial power that could upset the balance of states’ power regarding slavery, the Democrats fought and won the congressional battle not to renew the bank’s charter in 1811. Steven Girard, the richest man in America, a shipping magnate who was the largest shareholder of the First National bank, was also a war hawk. When America needed money to continue the war, he lent her his entire fortune. He doubled his wealth during the war and was rewarded as the largest shareholder in the newly formed Second National Bank in 1816. Shortly after the war under his guidance, the Second National Bank focused its efforts once again on rebuilding the agricultural-industrial-shipping-slave dominated economic engine of America. Banking’s interest in 1816 was not in correcting social injustice but in continuing it.
From the Missouri Compromise of 1820 through the 1854 Nebraska-Kansas Act, Congress maintained on behalf of business the balance of power between slave owning states and non-slave owning states, ignoring the North’s increasing condemnation of slavery. This growing antislavery sentiment threatened to destroy the wealth creating engine that banks, factory owners, plantation owners and the shipping industry had built. Any imbalance of state power could have destroyed the export economy, yet the 1820 compromise kept an uneasy denial in place for 34 years.
Antislavery legislation would have impacted the South much more greatly than the North because its entire economy was slave driven. From America’s founding, the North had placed its financial capital into industrial assets while the South had placed the majority of its capital into land and slaves. By 1854, 3 percent of the population of the South owned 90 percent of the land and 20 percent of the population owned 98 percent of the slaves. The economic prosperity of the South’s gentry was too ingrained in slavery to turn from it without devastating the economic and social structure of the South and that fact was reflected in its political defensiveness.
The North’s growing prosperity was also buoyed by low cost, albeit consensual, workers. A steady influx of immigrant indentured servants filled New England’s factories before heading into the Western territories to start new lives as settlers. Senator Douglas (IL) pressed to build a transcontinental railroad that would send these immigrants out from Chicago into the territories, and that would bring immense riches back to the business leaders of his state. In 1854, needing to add the area of Nebraska and Kansas to America’s territories to support the railroad, Senator Douglas pushed to keep the balance of power between slave and non-slave states by increasing the geography of slave territory beyond America’s uneasy compromise of 1820. This reversal of America’s slavery containment policy was the last straw among abolitionists. With the rallying cry to end slavery, they broke from the Whig Party to form the Republican Party.
The 1854 act inflamed the passions of Americans who had grown increasingly intolerant of slavery. All of the Southern Democrats voted for the 1854 act. 44 of 91 Northern Democrats joined them in defying the will of the majority of their states’ constituents, even if their votes did support the business interests of their state elites. At the end of 1854 elections, Northern Democrats had been reduced from 91 to 25 congressman and only 7 of the 44 that had voted for the 1854 Act kept their seats. The Republican Party, founded on principle of human dignity, finally broke with the established business/political balance between the two main political parties. This break tipped the uneasy balance of power and thrust America into Civil War.
From the signing of the Constitution in 1787 until the elections of 1860, American politicians and businesses had attempted to avoid the growing moral voice of America. Had they listened, a new political party would not have formed to coalesce those without a political voice. Could the Whigs and Democrats in Congress have managed the growing animosity toward slavery while still meeting the needs of America’s businesses? In that same vein, could the Republicans and Democrats today give America’s Middle Class its needed political voice while still giving our industries the greatest chance to succeed in international business?
Until the dramatic political shift that led to the battles of the Civil War, Congress was unwilling to find common ground with abolitionists. In the wake of their indifference, a new party rose on the shoulders of the disenfranchised and charged America into a bloody resolution of its greatest crisis. History may prove once again that Congress has an institutional indifference to the will of the American people. Rather than a nostalgic turn to find a congressional balance from our past, Americans must now be willing to take up the banner of those courageous abolitionists and forge a new path forward that places the will of America first.
Clif Carothers
Job Voucher Plan 