Chapter Four: Samuel Survives the Depression of 1819-1825
Why did Samuel wait until 1816 to buy land and establish a farm? First of all, as Steven A. Channing has pointed out, 1816 was "the first year of peace in a generation." Not only had the Napoleonic Wars ended, but the British had been soundly whipped at New Orleans and driven once and for all from American soil. Like 1946 one hundred and thirty years later, 1816 was a year during which the whole nation breathed a sigh of relief. With this relief came renewed optimism. During the war period, with European farms in disarray, American farm products had made spectacular gains in European markets. After it, for a year or so, crop prices continued to soar, making creditors hopeful and credit plentiful. Given these trends, it isn't surprising that Samuel May became a farmer in 1816.
When he completed his house in 1817, the nation was young and still growing. James Monroe, a Democratic Republican, had just moved into the White House, and Andrew Jackson, the Hero of the Battle of New Orleans, was down in Spanish Florida fighting the Seminoles. The Monroe Presidency, which historians like to call "The Era of Good Feeling," lasted from 1817 to 1825. During it Indiana, Mississippi, Alabama, Illinois, Maine, and Missouri joined the Union, and Florida became a U. S. Territory. William H. Bartlett's View of the Capitol at Washington, published in 1837, perfectly captures the mood of that period.
It was also the period when Floyd County was being divided into a number of smaller counties. In 1822, for example, the Kentucky General Assembly passed an act creating Lawrence County out of parts of Floyd and Greenup. One of the five commissioners who chose the location of Lawrence County's "permanent seat of justice" was a Prestonsburg man by the name of Samuel May. By the way, two years after Samuel helped select the site of Louisa, his brother Thomas performed a similar service for Pike County. On March 29th, 1824, Elijah Adkins donated one acre of land for the Pike County Courthouse. Two months later, Thomas May and two other men were appointed commissioners and given the task of choosing "what place the Courthouse shall be built on."
Viewed from a distance, the Monroe Era looks like the golden age of American democracy. Viewed up close, however, the picture reveals some ugly details. For Kentucky farmers, the period was less an era of good feelings than one of panic, anxiety, and despair. Steven A. Channing has told this story in his bicentennial history of the state, and in the following paragraphs I will summarize what he says.
Since colonial days America's frontier settlements had suffered from a lack of hard cash. When Thomas Jefferson's Democratic Republicans came to power in 1801, they tried to solve this problem by passing laws designed to stimulate the growth of the banking industry. By 1815 hundreds of new state and local banks had been incorporated. Underfunded and overpromoted, lacking the legal safeguards we nowadays take for granted, these banks printed their own currency and issued it without sufficient specie support. Furthermore, the wave of optimism that swept America in 1816 caused a rapid expansion of the banking industry. In 1818, according to Channing, forty new banks were chartered in Kentucky, and six more were added in the following year.
From 1815 to 1818 the bubble expanded, fed by underfunded currencies, irresponsible loan policies, and rampant speculation. Then, in the Autumn of 1818, word came from England that cotton prices were falling. By 1819 the commodity had lost two-thirds of its value. Soon the prices of other products--wheat, flax, hemp, and slaves--also began falling, as European farms that had lain idle during the war resumed production. For everyone concerned, it was a stern lesson in the dynamics of supply and demand. When land prices began to fall, depositors rushed to their banks and removed their deposits. During the Panic of 1819, Americans experienced one of the sharpest economic declines ever recorded.
The nation's central bank, the Bank of the United States, reacted to the crisis by calling for the immediate repayment of loans in hard currency, i. e., gold and silver coins. Here is an old engraving of the Bank of the United States at Philadelphia:
When the Bank of the United States called in its loans, well-established Kentucky banks followed suit. When this happened, the state's forty newly-established banks went bankrupt and thousands of Kentucky farmers lost their farms. "Thousands were dispossessed," says Channing, "as mortgages were foreclosed." When the army of debtors descended on Frankfort, the legislators responded in good Democratic fashion by passing a series of relief measures. One required banks to accept delayed payments on mortgages, and another authorized counties to aid their poor by giving them state land.
In May, 1821, for example, citing "An Act for the Benefit of Poor Widows," the Floyd County Court came to the assistance of eleven impoverished women by giving them land warrants good for one hundred acres. To obtain her warrant, each widow had to prove that her net worth was less than one hundred dollars. Did these women subsequently stake claims and erect homesteads? Probably not. More likely they sold their warrants to speculators for hard cash and then bought groceries to feed their children. One suspects, too, that with food on their tables and money jingling in their pockets, their dead husbands rose from their graves and rejoined their families.
Samuel May weathered the depression in fine style, not only because he had paid hard cash for his farm and owned it clear, but because he had income from other sources. No doubt his ferry provided income during this period, because even during hard times people must get across rivers. One way Samuel kept afloat was by selling property. In October, 1819, for example, he sold 150 acres on Blaine Creek to Miles Terry for $110. In April, 1821, he sold Ben, the slave boy he had purchased from Samuel Osborn in 1816, to "Maurice Langhorn and Son." Ben must have been a good worker, because he fetched a price of $625.
William H. Bartlett's drawing of the U.S. Capitol, engraved by Joseph C. Bently, comes to us courtesy of the curator of the U.S. Senate Art Collection. The rare print of the First Bank of the United States comes to us courtesy of USHISTORY.ORG, one of the best sources for American history on the Internet
© 1997 Robert L. Perry