Reevaluation and Reflection

It appears as though my worst fears have come true. Going into this project, on the Panic of 1819 in Williamsburg, I was well aware that there was almost no writing on the subject. Now I know why:  after nearly a month and a half spent in the Swem Library at William and Mary and at the Rockefeller Library in Williamsburg I have found almost nothing substantive about Williamsburg during the 1810’s and 20’s.  What little I have found has been entirely qualitative- mainly descriptions of the city and its inhabitants.  I know almost nothing about the city’s economy during the period, which of course prevents me from writing seriously about the depression in Williamsburg. However, I have still learned quite a lot through my research, much of it quite useful and interesting

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Causes of the Panic of 1819: Part Two

As the Transatlantic trade flourished, the American credit market continued to boom. As 1815 came to a close, essentially unregulated banks issued another $22 million in bank notes. The amount of currency floating around began to present a problem for the US treasury: one of the government’s primary sources of revenue was from the sale of public lands in the west, but the money issued by western banks was considered to be worth less than the notes issued in the east, where the government spent most of its money. In order to solve this problem of standardization, as well as hopefully curtail inflation, the Second Bank of the United States was authorized by Congress in 1816. The new bank’s first task was to restore the nation’s currency to par by forcing the various state banks to resume specie payments (although bank notes were nominally backed by silver coins in the bank vaults, most of the state banks had no real specie to speak of).[1] But both the State banks and the Bank of the United States dragged their feet on the convertibility issue, although the state banks did restrict their lending a little bit and at least nominally began to resume specie payments. But this supposed return to convertibility was dwarfed by the Second Bank’s own inflationary policy-the organization was run as a profit making enterprise, with branch managers loaning heavily and accepting promissory notes as capital.[2]In other words, the National Bank was doing exactly what it had been created to curtail.

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Causes of the Panic of 1819: Part 1

From where did the Panic of 1819 originate? Traditionally, the blame for the panic has been laid at the feet of the Second Bank of the United States and its President Langdon Cheves. In addition, many economists and historians point to the role the mismanaged state banks played in greatly expanding the nation’s money supply as another cause of the Panic.  According to this narrative, the Crash came about as a result of the overindebtedness and inflation caused by reckless lending of the state banks, which was then followed by incredibly harsh contraction of the money supply by the national bank. But while this statement is  basically correct, they ignore a crucial cause of the depression by focusing only upon the United States. The depression of 1819-1822 was not cause solely by the misadventures of the American banks but also by the complexities of the globalized economy.  More specifically, a sharp decline in the value of American export commodities, especially wheat, made the country as a whole much poorer, and exacerbated the monetary problems caused by the banks. In other words, the Panic was caused both by American banks and by economic events outside of the United States. To understand how these two factors helped to cause a major depression, we must first gain an understanding of the post War of 1812 era American Economy.

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Thomas Jefferson- A Bad Alumnus

Thomas Jefferson is certainly one of the College of William and Mary’s most cherished alumni. If the University of Virginia prides itself on being the school that was founded by Jefferson, then William and Mary prides itself on being the institution that educated him. However, Jefferson shared little of the love that the college has professed for him over the years. In fact, Jefferson had almost nothing good to say about his alma mater for most of his life. Although he thrived under the tutelage of William and Mary professor William Small, Jefferson had nothing but contempt for the other members of the faculty and for the facilities themselves.[1] He described the Wren Building as a “rude, misshapen pile”, and disdained the city of Williamsburg, referring to it as “devilsburg” in his personal correspondence.[2] Indeed, except for a short period during which his friend George Wythe served as the dean of the school of law, Jefferson continued to denigrate William and Mary for most of his adult life, describing the College as an institution “just well enough endowed to draw out the miserable existence to which a miserable constitution has doomed it.”[3] By the 1810’s Jefferson had completely abandoned William and Mary as a failed institution, and instead began to focus on getting a new, modern, public university established in Charlottesville. However, Jefferson would take two actions in the 1810’s and 1820’s that brought the College to the brink of ruin. The first move was to secure a loan from the College that was worth almost a fifth of the College’s endowment. This loan, which allowed Jefferson to live comfortably in his old age and then was passed on to his grandson, was never collected upon by the College.[4] After a combination of this loan and the disastrous effects of the Panic of 1819 brought financial ruin to the College, Jefferson managed to destroy his alma mater even further. When College President Dr. John Augustine Smith attempted to have William and Mary moved to Richmond in 1824, Jefferson did everything  in his power to stop the move, eventually getting the Virginia General Assembly to force William and Mary to stay in Williamsburg, a place where there was no money and no students.  In other words, Jefferson grew rich off the College, and then doomed it to irrelevancy.

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Williamsburg in the 19th Century: “As Lifeless as the Goddess of Dullness Could Wish”

As I began to research the effects of the Panic of 1819 on the City of Williamsburg, I thought it was a good idea to first get an idea of what exactly the city looked like in the 1810’s and 1820’s (using the term “city” to describe Williamsburg may be a bit of misnomer- the population had decreased considerably since the 18th century; it could easily be described as a village).  Anyone who has ever been to Williamsburg already has a pretty good idea of what the city looked like in the 1770s of course, thanks to the efforts of the Colonial Williamsburg Foundation. But what did the city look like forty years after independence? To answer this question, I turned to a collection of contemporary descriptions of the city put together by Jane Carson and the Colonial Williamsburg Department of Research and Record entitled We Were There and put together in 1961, as well as an architectural history of the city written by Lyon Gardiner Tyler, who had served as the College of William and Mary’s president during the early twentieth century. As it turns out, these readings show that the forty years after the capital moved to Richmond were not very kind to Williamsburg.

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