The Weekly Quill — Greenback-Slapped – Emerging Markets Hit Emergency Mode

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“Merchants in Cincinnati, as elsewhere, have got into debt by buying property or by building houses, but are now secure in the possession. Such people, notwithstanding, complain of the badness of the times, finding that the trade of buying without paying cannot be continued. Those who have not already secured an independence for life may soon be willing to have trade and fair dealing as formerly. Property laws deprive creditors of the debts now due to them; but they cannot force them to give credit as they were wont to do.”

James Flint of Scotland in Jefferson, Indiana, May 4, 1820

Whether dreams of continental control all the way to Canada, as some have purported, or national honor and maritime rights, the theme of President James Madison’s June 1, 1812, speech to Congress focused on the latter two. To some of the young country’s leaders, the need to engage in the War of 1812 was existential, nothing shy of a second war of independence. Among them was Andrew Jackson, who still bore the scars of the first war to free the Colonies of British rule. “Peace, above all things, is to be desired, but blood must sometimes be spilled to obtain it on equable and lasting terms,” Jackson said upon joining the U.S. Army. He earned the rank of Major General and the nickname “Ol Hickory” for his toughness on the battlefield, especially in the famous Battle of New Orleans.

It would be Jackson’s actions after being elected by the voting public as the nation’s 7th President in 1829 that left a lasting mark on the nation’s economy. The War of 1812, which ended on February 17, 1815, proved to be costly to the British, there’s no such thing as a war with no costs. Coinciding with the 1815 end of the War of 1812 was Britain’s being able to finally put an end to Napoleon’s reign. At home, Britain found itself mired in a post-war depression and attempting to quash rising militancy among the unemployed. Their answer was to up production of goods which were exported and dumped on American shores at cut rate prices. While cheap imports were welcome, struggling U.S. producers sought the protection of tariffs to protect their market share and staunch job losses. In time, a panic began to spread from the Northeast south to Pittsburgh and over to the Ohio River Valley and Lexington, home to budding and fragile industrial centers.

At the same time, more than 10,000 miles west of Kentucky, Mount Tambora, a volcano in present-day Indonesia, which was then part of the Dutch West Indies, began to erupt. This unleashing on Mother Nature’s part, which started on April 5, 1815, and ended April 23rd the following year, was more than 100 times that of 1980’s Mt. St. Helena, and remains the most powerful volcanic eruption in recorded human history. The atmospheric haze produced was so blanketing, the world remembers 1816 as the “year without a summer.” Compounding matters, Europe had a weak wheat harvest, which sent global prices soaring. Dejected, demoralized and cold, many New Englanders set out for the U.S. West and the prospects it held for sky-high farming profits and warmer climes.