Cyclopædia of Political Science, Political Economy, and the Political History of the United States
—The early system of bank charters in New York, without any general law, but by special legislation for each case, gave wide room for favoritism, partisanship and open fraud. In 1798-1800 there were but three banks in the state, at Albany, Hudson and New York city, and the latter was entirely controlled by the federalists, who, it was alleged, refused to accommodate their political opponents. Burr contrived to secure from the legislature in 1799 an act "for supplying the city of New York with pure and wholesome water," one clause of which authorized the company to employ its surplus capital "in any way not inconsistent with the laws and constitution of the United States, or of the state of New York." Under this innocent provision a democratic bank was afterward established. As soon as the democrats gained control of the state, in 1800-1, they, in their turn, chartered party banks; and open corruption in the grant of charters went so far that in 1812 the governor prorogued the legislature from March 27 until May 21, in order to prevent the open purchase of the charter of the bank of America from the legislature. In 1821 the new constitution of the state required a two-thirds vote of both houses to charter a moneyed institution; but this, by increasing the amount of purchase necessary, made the grant of new charters in 1825 still more scandalous. All the difficulty was due to the vicious principle of incorporating companies by special legislation.
—In 1834-5, when it had become apparent that the bank of the United States would not be rechartered (see
—In January, 1836, the loco-foco county convention adopted a platform, or "declaration of rights"; it declared that the rightful scope of legislation was only to declare and enforce the natural rights of individuals, that no legislature had the right to exempt corporations, by charter, from trial by jury or from the operation of any law, or to grant them special privileges; that charters were subject to repeal; and that paper money in any form was a vicious circulating medium. The party was steadily beaten in city elections, but its vote increased so far that in September, 1836, it held a state convention at Utica, and nominated candidates for governor and lieutenant governor. These were also defeated, but the party's vote showed no signs of a falling off, and in September, 1837, another convention was held at Utica. This body framed and proposed for general discussion a new constitution for the state, one of whose features was an elective judiciary.
—President Van Buren's message, Sept. 4, 1837, at the opening of the "panic session," brought the loco-foco element back to its original party, for, as Hammond exactly states the case, "if it did not place the president in an attitude of war against the banks, it placed the banks in a belligerent attitude against him." The message, in its condemnation of the employment of corporations for purposes which might be obtained by private association, in its opinion in favor of gold and silver as the only government money, and in its declaration that the government revenues ought not to be deposited in state banks, enabled the loco-focos to regard Van Buren as their own leader. They were already prepared to do so by the course of some of the whigs in accepting loco-foco nominations, but acting with the whigs when elected. From this time they were a part of the democratic party, but their continuing influence was apparent, 1, in the passage of the safety fund banking law of April 13, 1838 (see
—See 2 Hammond's Political History of New York, 489; Byrdsell's History of the Loco-Foco, or Equal Rights, Party; 2 von Holst's United States, 396; Jenkins' Governors of New York, 591; 2 Statesman's Manual (edit. 1849), 1058 (the anti-bank portion of Van Buren's message).
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