Quote:
Originally Posted by olhamada
An interesting read
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Mr. Schoon's interpretation of Thomas Jefferson's view of banks differs somewhat from that presented by one of Thomas Jefferson's foremost biographers, Merrill, D. Peterson, who won the Bancroft Prize for
The Jefferson Image in the American Mind in 1961. Schoon presents Jefferson's view as an example of that man's prescience. Peterson suggests that Jefferson's hostilty towards banks was because of the man's own experiences.
In
Thomas Jefferson and the New American Nation (1970)*--perhaps the best one-volume biography Jefferson and definitely the source of the quotations used below--Peterson shows that the Sage of Monticello consistently lived beyond his means throughout his adult life and sought various arrangements to remain solvent.
To his dying days, Jefferson recorded the least expense. Yet, he was a lousy book keeper who ignored the broader health of his finances. He repeatedly mortgaged property and human beings to allay the demands of his creditors. As president, he took these habits with him to Washington where he proved a generous host to all visitors. After his presidency, he returned to Virginia to find huge debts waiting for him. (He had forgotten, his creditors had not.)
While some of Jefferson's some of his misfortune was due to bad luck (weather and pests), chemistry (the declining fertility of his land), and war in Europe (leaving aside his role in exacerbating those conflicts--I shall never forgive him for setting the stage for Mr. Madison's War.
), the lion's share of
credit rested on his own shoulders.
As a public servant, Jefferson's personal sensibilities towards wealth and debt may have affected his judgment. For example, during his time in Virgina's House of Delegates, Jefferson drafted the Bill for Sequestering British Property (1778). This bill allowed debtors in Virginia to pay off private debts owed to Tory creditors with the commonwealth's paper money that "had already depreciated four or five times over and would become, as Jefferson said, as worthless as oak leaves." While Jefferson eventually paid his substantial private debts in full to his British creditors, one should not lose sight of the fact that the intent of this bill was "to bolster the state's credit and increase its revenue" (p. 123). (This bill was passed two years after Schoon argues, wrongly, that the American Revolution banished England's "debt-based banknotes in 1776, and five years before the Treaty of Paris [1783], available
here, stipulated that Americans would pay off debts owed to British creditors.)
A second example can be found in Jefferson's days as an elder statesman. When he railed against banks in general and the Second Bank of the United States (BUS) in particular during the panic of 1819, "[b]ankruptcy knocked at his door" . While some of his misfortune was due to circumstances beyond his control, a lifetime of financial mismanagement on his part was catching up to him. By 1821, Jefferson was personally on the hook for $40,000 and faced an obligation for an additional $20,000 due to a loan from the BUS he had endorsed for a friend, Gov. Wilson Nicholas. (Peterson writes that the endorsement "was more than a routine service in view of Jefferson's circumstances and the precarious state of the Virginia economy. But Nicholas, a director of one of the Richmond banks, had endorsed for him and been helpful in other ways. (Pp. 989-993, quotes on 990, and 991.)
One should also note that Jefferson's opposition to banks had a political basis. In the aftermath of the panic, Jefferson "was haunted for the rest of his life by ghosts of departed Federalism" (p. 992). Not only the BUS also the American System, protective tarrifs, bills for internal improvement, the growing power of the federal judicial system, and the Missouri Compromise (1821) all reminded him of the Federalists--his now departed political rivals whom hated (p. 993).
So when Mr. Schoon argues that "Thomas Jefferson, perhaps the greatest of America’s forbearers, saw those dangers clearly—the greatest being banks and standing armies," one should ask: Danger to whom? The nation? Virginia? Or to Jefferson? (If not also ask: At what point is the blogosphere going to collapse under the weight of its own inaccuracies?)
Other points on capitalism in nineteenth century America, the grand strategy of the British empire, and the misuse of history by economists will have to wait indefinitely. The caffeine is finally wearing off.
(I will never use that much coffee to make a pot of joe again.
At least not until the next pot of joe.
)
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* Merrill D. Peterson,
Thomas Jefferson and the New Nation (New York: Oxford University Press, 1970; reprint, Norwalk, CT: The Easton Press, 1987).