Ohio History Journal

B. W. COLLINS

Economic Issues in Ohio's

Politics During the

Recession of 1857-1858

Historians are just beginning to integrate the study of local and state

issues with the study of national issues in American politics. For some

periods, federal issues are so important and interesting that state history

tends to be reduced to a batch of mere case studies detailing the local

impact of great national questions. One period suffering acutely from

such neglect is the 1850s. Recently, however, state and local history

has been given new prominence by the challenging work of ethnocultural

historians on popular voting behavior. Professor Ronald P. Formisano

has produced a rich analysis of the emergence of Michigan's Republican

party, and Professor Michael F. Holt stresses the influence of local

rivalries, policies, and anxieties in the shaping of a Republican coalition

in Pittsburgh.' Banking issues have been ably discussed for the Old

Northwest by William G. Shade, and Professor Holt has put forward

a provocative interpretative synthesis of the impact of state issues on

antebellum politics.² At present, however, the amount of published

literature on the interaction between local, state, and federal issues in

politics in the 1850s is small, but growing.³ This article seeks to add to

that literature.

B. W. Collins is Lecturer in Modern History, The University of Glasgow, Scotland.

1. The general argument for such an approach was put in Joel H. Silbey, The

Transformation of American Politics, 1840-1860 (Englewood Cliffs, 1967), 1-34;

Ronald P. Formisano, The Birth of Mass Political Parties: Michigan, 1827-1861

(Princeton, 1971); Michael F. Holt, Forging a Majority: The Formation of the

Republican Party in Pittsburgh, 1848-1860 (New Haven, 1969); Frederick C. Luebke

(ed.), Ethnic Voters and the Election of Lincoln (Lincoln, 1971).

2. William G. Shade, Banks or No Banks: The Money Issue in Western Politics,

1832-1865 (Detroit, 1972); Michael F. Holt, The Political Crisis of the 1850s (New

York, 1978). For the older view that traditional party issues disappeared during 1850s

see, for Ohio during Chase's governorship, Albert B. Hart, Salmon Portland Chase

(Boston and New York, 1899), 149, 157-76.

3. William J. Evitts, A Matter of Allegiances: Maryland from 1850 to 1861

(Baltimore, 1974); J. Mills Thornton, III, Politics and Power in a Slave Society:

Alabama, 1800-1860 (Baton Rouge, 1978); Kevin Sweeney, "Rum, Romanism, Repre-

sentation, and Reform: Coalition Politics in Massachusetts, 1847-1853," Civil War

History, XXII (1976), 116-37; Dale Baum, "Know-Nothingism and the Republican

Economic Issues                                                         47

Analysis of local and state politics for their own sake-and not

simply as reflections of national political disputes-serves also to

remind one of two themes largely overlooked in most historical accounts

of the mid-nineteenth century. The first largely neglected theme is the

puzzling continuity in Democratic support in the North.⁴ One might

expect the idea of continuity in party support to emerge from studies

emphasizing the underlying and fairly constant influence of religion and

ethnicity upon voting behavior. But while ethnocultural historians

make much of the impressive continuities in American party strength,

they also stress for the 1850s the role of "cultural" preoccupations in

bringing about political change. Formisano's complex account of

Michigan's politics in the 1850s depicts a broad movement of opinion

to the Republican party, related to the heightened evangelical tone of

public discourse, and affecting most social and religious groups.⁵ This

emphasis is clearly correct for Michigan, where the new Republican party

became much stronger than the Whigs had been. Elsewhere, however,

the Democracts were not so firmly pushed down into second place

by the formation of a purely Northern Republican party. In many

Northern states, the Democrats remained in the late 1850s, despite all

the defections and obloquy they had suffered in the previous decade,

not only "respectable" but healthy and combative minorities.⁶ Between

1852 and 1860, Democratic voting strength fell in the North; but it did

not fall uniformly, or even dramatically, in many states. In Michigan,

the average Democratic share of the vote in the presidential elections

Majority in Massachusetts: The Political Realignment of the 1850s," Journal of

American History, LXII (1978), 959-86. Other recent works of this kind concentrating

on Southern secession are: William L. Barney, The Secessionist Impulse: Alabama

and Mississippi in 1860 (Princeton, 1974); Michael P. Johnson, Toward a Patriarchal

Republic: The Secession of Georgia (Baton Rouge, 1978). It should be noted that

much of the state material drawn upon by Professor Holt in his Political Crisis

(pp. 271-72) comes from a large number of seminar papers, most of them so far

unpublished.

4. This problem is discussed in Bruce Collins, "The Ideology of the Ante-bellum

Northern Democrats," Journal of American Studies, 11 (1977), 103-21; Joel H. Silbey,

A Respectable Minority: The Democratic Party in the Civil War Era, 1860-1868

(New York, 1977), ch. 1; Holt, Political Crisis, ch. 7. The best account of Ohio's

politics in the 1850s separates economic issues from political events and argues that

by 1857-58 the "old issues" associated with Jacksonian Democracy were dead:

Eugene H. Roseboom, The Civil War Era 1850-1873, Vol. IV of The History of the

State of Ohio (Columbus, 1944), 140-43.

5. Formisano, Birth of Mass Political Parties, 289-331. There are, however, good

grounds for believing that the extent of the defections from other parties to the

Republicans were exceptionally high for the Old Northwest in Michigan: see Ray M.

Shortridge, "The Voter Realignment in the Midwest During the 1850s," American

Politics Quarterly, 4 (1976), 193-222, esp. 206, 208.

6. Silbey, Respectable Minority, 12-23; Collins, "Ideology of Ante-bellum Northern

Democrats," 120.

48                                                           OHIO HISTORY

of 1844 to 1852, inclusive, was 49.2 percent, while it was 42.7 percent

in the presidential elections of 1856 to 1864, inclusive-a substantial

though not an astonishingly great decline of 6.5 percentage points.⁷

In Ohio, the figures for the same sets of elections were 47.5 percent

and 44.3 percent, respectively. The loss of relative support of only

3.2 percentage points was half that inflicted upon Michigan's Demo-

crats. A general problem-explaining continued Democratic popular-

ity among a sizeable minority of Northern voters at a time when the

party was being abused as the tool of the Slave Power-takes on a

further local complexion: why did the Democrats experience such

relatively mild losses of popular support in Ohio?

One explanation has already been adduced by Professor Don E.

Fehrenbacher-racism.⁸ The Northern Democrats appealed overtly to

race prejudice against an allegedly Negro-loving, proto-abolitionist

Republican party. Racism was played up especially in Ohio because the

state bordered on Kentucky and Virginia, and consequently received a

steady influx of runaway slaves. By the late 1850s, indeed, the Fugitive

Slave act of 1850 was enforced more vigorously in Ohio than in any

other free state.⁹ Northern Democrats in general welcomed the Supreme

Court's Dred Scott decision of March, 1857, for the very reason that

it denied to free black men any future hope of becoming citizens.

Senator Stephen A. Douglas of Illinois wanted to exploit the opportunity

offered by the Dred Scott decision to debate with Republicans the

desirability of black citizenship. 10 In Ohio in particular, Democrats

posed as the passionate defenders of a white man's commonwealth

against the abolitionist sympathizer, Salmon P. Chase." They believed

that the Dred Scott decision would benefit them in the gubernatorial

election of mid-October, 1857. Racism was and continued to be a vital

part of Ohio Democrats' popular appeal.12

7. Figures for presidential elections are taken from W. Dean Burnham, Presidential

Ballots, 1836-1892 (Baltimore, 1955) and Silbey, Respectable Minority, 22, 151.

8. Don E. Fehrenbacher, The Dred Scott Case (New York, 1978), examines the

electoral impact of the case. For the general problem of Democratic party support

in 1857-58, see Bruce Collins, "The Democrats' Electoral Fortunes During the

Lecompton Crisis," Civil War History, XXIV (December, 1978), 314-31.

9. This is suggested by the figures in Stanley W. Campbell, The Slave Catchers:

Enforcement of the Fugitive Slave Law 1850-1860 (New York, 1972), 204-06.

10. Douglas made the point in a speech in June 1857. He said the validity of

the Dred Scott decision would be one of the main political issues in the near future.

A Political Text-Book for 1860 (New York, 1860), 157.

11. The phrase comes from Portsmouth, Spirit of the Times, Oct. 13, 1857. An

editorial in a leading Democratic newspaper argued, "Chase and his leading Black-

Republican supporters are in favour of measures which tend to bring to Ohio a large

negro population.... the free negroes of the South think Ohio their promised land,

and are flocking here by thousands." Cincinnati, Daily Enquirer, Oct. 4, 1857.

12. Silbey, Respectable Minority, 81-83, 190-91.

50                                                           OHIO HISTORY

The panic of 1857 ended a period of tremendous economic prosperity

virtually uninterrupted since 1843. It did not throw the country into deep

depression-as the crashes of 1837 and 1839, 1893, and 1929 did-but

it stopped economic growth in the North. 14 Ohio suffered fewer business

failures than did a number of states of roughly comparable population. 15

But Ohio was a state of dispersed market-towns and widely spread

commercial agriculture par excellence. According to the census of 1860,

Ohio possessed a greater mileage of railroads than any other state in

the Union and had acquired 2,424 of its 2,999 miles since 1850-a

sheer quantity of railroad building exceeded only by Illinois' 2,757

miles.¹⁶ In 1857, an estimated 30 percent of Ohio's total output of

mining, agricultural, and manufacturing commodities were sent out of

the state.¹⁷ That estimate crudely indicated Ohio's dependence on good

credit arrangements, sound distant markets, and efficient transport

facilities. The financial crash, beginning in late August with the collapse

of an Ohio insurance company operating mainly in New York city,

predictably spread panic when it brought bank suspensions, market

dislocation, and railroad failures to the Midwest. It is symptomatic of

historians' preoccupation with federal politics and sectional issues that

an event of such immediate significance, suddenly ending a lengthy

period of economic growth, should have been almost entirely ignored

in descriptions of late antebellum politics.18 In Ohio, at least, the panic

vitally affected party politics and partly explains why the Democrats'

popular appeal remained so reliable and considerable for such a lengthy

period of time.

The panic of 1857 induced the Democrats to indulge in traditional

been unfairly ignored: for example, Helene S. Zahler, Eastern Workingmen and

National Land Policy, 1829-1862 (New York, 1941); Robert R. Russel, Critical Studies

in Antebellum Sectionalism (Westport, Conn., 1972), chs. 5-7, 11: these chapters appeared

originally in 1924, 1925, 1948, and 1928, respectively.

14. Douglass C. North, The Economic Growth of the United States, 1790-1860

(New York, 1966 edn.), 206-14.

15. D. Morier Evans, The History of the Commercial Crisis 1857-1858 (New York,

1969 reprint of 1859 edn.), 136-37.

16. Statistics of the United States, (Including Mortality, Property, etc.) in 1860:

Compiled from the Original Returns and Being the Final Exhibit of the Eighth Census

(Washington, D.C., 1866), 329-31.

17. C. C. Huntington, "A History of Banking and Currency in Ohio Before the

Civil War," Ohio Archaeological and Historical Society Publications, XXIV (Columbus,

1915), 469.

18. There is a short economic analysis of the crash: George W. Van Vleck, The

Panic of 1857 (New York, 1943); Holt, Political Crisis, 199-201; B. W. Collins,

"The Politics of Particularism: Economic Issues in the Major Northern States of the

U.S.A., 1857-1858" (Unpublished Ph.D. dissertation, Cambridge University, 1975);

for the absence of any discussion of the crash's impact on Ohio's politics, see Roseboom,

Civil War Era, 327-39.

Economic Issues                                                         51

Jacksonian anti-banking rhetoric and to place new emphasis on their

traditional belief in tight banking regulations. Democratic publicists

displayed violent hostility to banks as such. Their campaign effusions

of September and early October, 1857, during the gubernatorial contest,

were not simply idle promises. The Democratically controlled state

legislature of 1858 imposed new controls upon banks and currency.

Even before the panic broke in late August, 1857, Democrats were

urging upon Ohio's voters their own ideas about banking regulation.

Continued partisan debate over banking-often thought to have sub-

sided after the late 1840s¹⁹-was provoked by differences of opinion as

to the proper way of taxing banks. From 1851 Democrats fought a

running battle with the Whigs and then Republicans over the precise

method of taxing banks, always seeking to impose higher taxes than

the banks thought acceptable or their political opponents thought wise.

This dispute-shunted back and forth between state and federal courts-

had still not been resolved by 1857. Moreover, Democrats were angry

because a state act they passed in 1854 banning the circulation within

Ohio of notes issued by banks chartered outside Ohio was repealed

by the Republicans in 1856. To make matters worse, in early 1857 the

Republican legislature passed an expansionist banking act which went

to a popular referendum in the autumn.²⁰ To add spice and urgency to

these running disputes, the Democrats exploited revelations of a massive

embezzlement in the state treasurer's office made in June, 1857.

Although the embezzler, John G. Breslin, was a former Democratic

state treasurer, his activities had been covered up by his Republican

successor, and brother-in-law, William H. Gibson.²¹ Although avoiding

19. James Roger Sharp, The Jacksonians versus the Banks: Politics in the States

after the Panic of 1837 (New York, 1970), 158, concludes that an act passed in 1851,

marked the end of banking controversies in Ohio. Obviously such controversies were

less important than they had been in the 1840s. But during 1850-60 at least fifteen

public acts and bills were passed or extensively debated in Ohio's General Assembly.

And Shade has shown that public controversy over banking continued in the 1850s.

See, Ernest L. Bogart, Financial History of Ohio (Urbana, Ill., 1912), 280-96; Shade,

Banks or No Banks, 136-38, 187-89.

20. Huntington, "History of Banking and Currency," 456-66.

21. Bogart, Financial History, 161. The Democrats' campaign strategy before the

financial crash occurred was to attack Governor Chase for neglecting the administration

of Ohio's affairs in favor of devoting his attention to slavery disputes in Kansas. His

Democratic opponent for the governorship accused Chase of being a "a novice in

financiering" and "too dignified" to look after state administraive matters. E. B.

Andrews to Chase, Marietta, Aug. 20, 1857, Salmon P. Chase papers, Library of

Congress. (Andrews was reporting on a speech made by the Democratic gubernatorial

candidate.) Before the panic broke, however, Republican worthies seemed to anticipate

no electoral difficulties flowing from the Gibson frauds. Indeed, the secretary-treasurer

of the Republicans' state central committee, W. J. Bascom, hoped for a majority of

20,000 for Chase in October's election. The actual majority was only 1,503. R. P.

Spalding to Chase, Cleveland, June 23, 1857, Salmon P. Chase papers, Pennsylvania

52                                                          OHIO HISTORY

the use of embarrassing personal attacks, the Democrats attempted to

capitalize on this scandal by demanding the introduction into the

state of an independent treasury. Just as Democrats in Congress

divorced the federal government's finances from private banks during

the 1840s by setting up a federal independent treasury, so Ohio's

Democrats argued that state financial transactions should be untainted

by contacts with private banking interests. This argument was advanced

before the panic began; it took on greater force as a result of the banking

failures in September and October.

In one sense, the state elections of 1857 witnessed the last outburst

of traditional Jacksonian anti-banking sentiment-a restatement of safe,

traditional prejudices-in American politics. In another sense, however,

the election campaign and the events immediately following it revealed

a perennial dilemma faced by a society of producers: how to regulate

satisfactorily financial institutions upon which everyone depended,

but which were often distrusted because of their profiteering, shoddy

practices, and unreliability. Fear of banks' power and practices in

Ohio was not new in 1857, for it had inspired Democratic demands

for restraint upon banks in the legislative wranglings over bank taxation

and bank expansion throughout the 1850s, as well as earlier. But that

fear was expressed more pointedly in 1857.

Basically, the Democrats promised to establish a state independent

treasury. As one newspaper stressed on the eve of polling day, "NEXT

to the question, shall Ohio be preserved a white commonwealth, the

Independent Treasury is the most important issue in the canvass."²²

Before the 1857 crash, the Cincinnati Daily Enquirer had stated:

The Democracy are pledged to the establishment of a State Treasury, wholly

independent of the banks in which the money of the State shall be kept. They

are determined that the Treasurer shall not have the power to loan out State

money to private bankers to speculate with, and to be returned or not, as their

speculations are successful or their inclinations prompt.²³

This promise was expressed in thoroughly populist terms. One local

Democratic convention resolved that "the only safe manner of preserv-

Historical Society; W. J. Bascom to Howe, Columbus, Aug. 8, 1857, Richard Howe

papers, Ohio Historical Society. Roseboom, Civil War Era, 329.

22. Portsmouth, Spirit of the Times, Oct. 13, 1857; see also Marietta Republican

(a Democratic paper), Sept. 25, 1857: it made five charges against Governor Chase,

including two on state finances and two on Negro equality. In the safe southern Ohio

county of Fairfield, the local Democratic newspaper put greater emphasis on the state

administrative and banking issues than on attacking Chase over slavery. Lancaster,

Ohio Eagle, Sept. 17, 24, Oct. 1, 1857.

23. Cincinnati, Daily Enquirer, Aug. 25, 1857.

Economic Issues                                                      53

ing the people's money from being plundered is to establish a People's

Treasury, totally disconnected from all corporations."²⁴ In addition, the

election address issued by the state's Democratic central committee

asserted that the Republican party, "instigated and governed by bankers

and money-changers," was the stout defender of a state treasurer's

office closely linked to, indeed dependent upon, banks.²⁵

Beyond this specific institutional reform, Democrats looked forward

also to the banning of small denominations of bank notes, to the replace-

ment of paper money by specie currency, and, among some radicals

to the collapse of all banks in the United States. A leading Democratic

newspaper, the Cincinnati Enquirer demanded the banning of notes of

under $20 in denomination as a way of reducing that unstable element

in the money supply which most directly affected lower income

groups.²⁶ Democrats generally held that commercial transactions could

be conducted in notes of larger denomination. But everyday transactions

(most incomes were about $7 to $15 per week) should be conducted in a

currency not vulnerable to sudden and appreciable fluctuations in value.

The Ohio Democrats' central committee proclaimed:

The Democratic party looks forward to, and is determined to bring about the

time, when the wages of labor shall be paid in gold and silver, and the farmer

may ride home, after having sold his wheat and corn, with a bag of specie on

the pommel of his saddle. ²⁷

The very reasonable desire to supplant a paper currency prone to

depreciation with a specie currency more likely to be fixed in value was

embellished with self-righteous party rhetoric. The Cincinnati Enquirer

pronounced, "It is the destiny of all banks to fail in the United States.

This has been proved by our experience of paper money for seventy

years."²⁸ Democrats should insist that no new banks be chartered in

order to help realize this historically inevitable fact. Another Democratic

organ, the Cleveland Plain Dealer proclaimed:

Decennially, and sometimes annually, we are called upon to warn the farmer,

mechanic and laboring men, against the Rag Barons, Charter Mongers, and

Privileged Orders, who are after a division of their hard earnings in the way of

bust up banks and repudiated promises to pay. 29

24. Spirit of the Times, Sept. 15, 1857.

25. Address of the Democratic State Central Committee to the People of Ohio

(Columbus, 1857), 5-6. See also Spirit of the Times, Nov. 3, 1857.

26. Cincinnati, Daily Enquirer, Sept. 22, 23, 27; see also Sept. 1, 3, 30, Oct. 1, 7, 9,

1857.

27. Address of the Democratic State Central Committee, 5-6.

28. Cincinnati, Daily Enquirer, Sept. 26, 1857.

29. Cleveland, Weekly Plain Dealer, Sept. 2 (also 9), 1857. See also Marietta

54                                                            OHIO HISTORY

These affirmations of party piety came from all parts of Ohio: from

the prosperous cities of Cleveland and Cincinnati, from rural counties,

and from north and south.³⁰ One prominent Republican newspaper

editor in Sandusky in the north warned his party colleagues against

defending banks from popular ire.³¹ An Old Whig banker reflected

after the close gubernatorial election that anti-bank feeling was genuinely

and deeply felt among the people, even if it was provoked by

demagogues and was totally ill-founded.³² And Salmon Chase himself,

after squeaking through to a second term as governor, blamed his

narrow scrape on feeble support from his Republican colleagues and

on "disadvantages, growing chiefly out of the concealment by our

Treasurer of his predecessor's defalcation and the anti-bank clamor as

a consequence of the money panic."³³ Thus their opponents seem to

have agreed with the Democrats' claim that anti-bank sentiment was

rampant in 1857.

Republicans were not left entirely stranded by popular anti-bank

feeling. During October and November, another manifestation of such

feeling enabled the Republicans to pose as defenders of local interests

against metropolitan interests. In nine small towns, most of them

possessing about 4,500 people, local "mobs" defended banks from

Republican, Sept. 4, 11, Oct. 9, Nov. 6, 13, 1857. For Republican local newspapers'

counterattacks on Democratic anti-banking rhetoric, see: Marietta Intelligencer, Sept. 30,

Nov. 4, 1857 (this paper said that local banks should be supported); M'Connelsville,

Morgan Weekly Herald, Sept. 10, 24, Oct. 1, 1857 (this paper sought to show that local

Democratic politicians were deeply involved with banks); Athens Messenger, Oct. 2, 9,

1857 (this paper, edited by N. H. Van Vorhes, Republican speaker of the state house

of representatives in 1856-57, argued for an expansion of Ohio's banking facilities).

30. The point at issue here is the applicability to Ohio of Professor Shade's general

argument that disputes over banking and currency matters reflected deeper cultural

antagonisms between Yankee Protestants and other ethno-religious groups. Following

that argument, one might associate anti-banking and hard currency ideas with areas

of non-evangelical religious sentiment and Southern settlement: areas less intent upon

commercial development. In Ohio, at least, the legislators handled banking and currency

questions in a partisan way, irrespective of regional differences. Democratic legislators

from northern counties in Ohio voted with Democratic representatives from counties

of heavy Southern settlement. Shade, Banks or No Banks, 172-74, 195-98, 252-53.

31. H. D. Cook to J. Sherman, Nov. 17, 1857, John Sherman papers, Library of

Congress. John Sherman was a congressman in 1857. Henry Cooke edited a newspaper

in Sandusky until 1858, when he acquired the Ohio State Journal. Roseboom, Civil

War Era, 54-55, 200-01.

32. R. Hitchcock to S. Ford, Jan. 13, 1858, Peter Hitchcock Family papers,

Western Reserve Historical Society. For information on the political loyalties of these

men see, Roseboom, Civil War Era, 129, 256.

33. S. P. Chase to C. Sumner, Nov. 23, 1857, Charles Sumner papers, Harvard

University library; S. P. Chase to E. B. Washburne, Nov. 1857, Elihu B. Washburne

papers, Library of Congress. One Republican leader blamed his party's poor performance

in Cleveland on Democratic electoral corruption (a standard excuse) and on Republican

supporters' apathy as a result of the financial crisis and the Gibson frauds. Wm. Slade,

Jr. to Chase, Cleveland, Oct. 29, 1857, Chase papers, Library of Congress.

Economic Issues                                                         55

metropolitan bill-brokers.³⁴ The brokers were exercising their full legal

right to take notes received in major commercial centers back to the

bank of origin for redemption in specie. But any specie drain suffered

by banks obviously threatened those banks with the necessity of

suspending specie payments altogether, so endangering their entire

operations and their serviceability to the local communities.

With these considerations in mind, local crowds gathered in at least

nine towns to frighten off metropolitan brokers, usually by threatening

them with tarring and feathering. Democrats depicted such actions

as attempts by business elites to thwart popular rights. When a

Cincinnati broker arrived at Piqua, "The leading businessmen of the

place assembled their forces and ordered Mr. Broker out of town."35

Another Democratic newspaper complained, "The Banks have block-

aded their doors with mobs to intimidate and drive away those holding

their notes. These bills are a total loss to the holders, and a clear gain to

the aristocratic, swindling banker."³⁶ Republican newspapers, however,

argued that local people took "spontaneous action" against "the carpet

bag gentry" of metropolitan brokers.37 Trying to recoup ground lost

in September and early October, Republican local newspapers posed

in late October and November as the true defenders of small-town

enterprise against grasping metropolitan financiers.

The Republican quest for a response to Democratic anti-bank rhetoric

continued when the new legislative session began in January, 1858.

Governor Chase suggested to the Democratic legislature that more

banks be chartered in Ohio, but only if notes of under $20 in

denomination were prohibited. Chase sought to appease anti-bank

sentiment also by proposing a technical reform of the laws governing

the rate of interest. He urged that private banking houses, as distinct

from note-issuing banks, should no longer be permitted to charge

10 percent interest on loans; a standard rate of 6 percent (the maximum

34. The nine towns in which these incidents occurred were, together with their

populations in 1860: Athens (2,852), Circleville (4,383), Ironton (3,691), Lancaster (4,303),

Mansfield (4,581), Marietta (4,323), Piqua (4,616), Springfield (7,002), and Xenia (4,658).

Six of these towns are listed in Roseboom, Civil War Era, 141; I have added Circleville,

Ironton, and Lancaster, as noted in Athens Messenger, Oct. 30, 1857; Marietta

Intelligencer, Nov. 18, 1857; Ohio Eagle, Dec. 3, 1857. It might be noted that forty-five

towns in Ohio in 1857 had one or more banks: Huntington, "History of Banking and

Currency," 468. The population figures are from Population of the United States in

1860: Compiled from the Original Returns of the Eighth Census (Washington, D.C.,

1864), 372-96.

35. Cleveland, Weekly Plain Dealer, Oct. 21, 1857.

36. Lancaster, Ohio Eagle, Nov. 26 (also Nov. 5, 12, Dec. 3), 1857; Spirit of the

Times, Nov. 3, 1857.

37. Marietta Intelligencer, Oct. 14, Nov. 18, 1857. See also, Athens Messenger,

Oct. 30, Nov. 6, 1857.

56                                                         OHIO HISTORY

rate which note-issuing banks were permitted to charge) should be set.

The prevailing rate of 10 percent allowed to banking houses "enables

the moneyed capitalist to absorb far too large a share of the earnings

of the farmer, the mechanic and the merchant."³⁸ Republicans as well as

Democrats thus sought to devise measures to meet what they sensed to

be public disquiet at economic exploitation. But the real work of bank

reform was the Democrats' responsibility. In that respect, the ebbing of

Jacksonian faith depicted by Professor Arthur M. Schlesinger, Jr., did

not drain Ohio's Democrats of their traditional ideals.³⁹

Continuity with the aims pursued by the party in the 1830s and 1840s

was underscored by the Democrats' policies in the state legislature.

First, the Democrats returned to a favorite hobbyhorse-trying to tax

banks at the same rate at which ordinary individuals were taxed. In

1851 and 1852-53, the state legislature had imposed harsh taxes on

banks, though such taxes were deemed unconstitutional by federal

courts and were replaced by a lower tax passed in 1856 by Republicans.⁴⁰

The new tax bill of 1858 was passed by a vote of 57 to 42 in the lower

house and by 19 to 12 votes in the Senate: a strict party vote in each

case, except for one representative.⁴¹ Voting on this measure reflected

no regional antagonisms and no special economic interests, for Demo-

cratic counties were spread throughout the state. And one-third of

counties represented by Democrats had at least one bank; the Republican

counties' proportion was higher (26 of 44 counties), but not high enough

to suggest a clash of economic interests.⁴² The key point was clear:

Ohio Democrats' commitment to tax banks severely remained a

constant source of party unity and purpose throughout the 1850s.

The second practical achievement of the legislature of 1858 similarly

reflected traditional Democratic ideas. The legislature set up a state

independent treasury, again by a strictly party vote.⁴³ Some Democrats

wanted all state taxes and expenditures to be paid in specie or in federal

38. Ohio, General Assembly, Legislative Documents for 1857 (Columbus, 1858),

part I, 356-59, 363-64, 370, 373,378.

39. Arthur M. Schlesinger, Jr., The Age of Jackson, (London, 1946), chs. 25, 26;

"Whatever remained of the live Jacksonian tradition had in the main, by 1858, entered

the Republican party" (p. 489).

40. Huntington, "History of Banking and Currency," 456-62.

41. Ohio, General Assembly, Journal of the House of Representatives: 1858 Session

(Columbus, 1858), 523 (party affiliation as defined by the vote for the speakership,

p. 5); Journal of the Senate: 1858 Session (Columbus, 1858), 369-70, 4-5.

42. A list of Ohio's banks in January, 1857, is in Huntington, "History of Banking

and Currency," 468.

43. Journal of the House, 567. For Democratic newspapers' praise for the independent

treasury, see Ohio Eagle, Apr. 1, 29, 1858; Marietta Republican, Apr. 30, Oct. 8, 1858;

Cleveland, Weekly Plain Dealer, Apr. 21, 28, July 28 (resolutions of Richland County

Democratic convention), 1858.

Economic Issues                                                        57

Treasury notes. Some proposed that this condition be delayed until

1872 rather than effected earlier. Obvious objections to such measures

were raised. The collection of $9,500,000 of taxes at one time would

create, according to one newspaper, a chronic drain on Ohio's banks

and dire problems for the state's money system. The party caucus

therefore, hammered out a less radical measure-though still opposed

wholeheartedly by Republicans-which made state and county treasurers

the custodians of public funds. These local treasurers were obliged to

pay out specie for small bills owed by the state or county, but were

left to find their own ways of obtaining specie.44 A monetary bottleneck

was thus avoided while the essential objective-separating state finances

from the banking sector-was secured. It was this point that some

Republicans seized on in opposing the legislation: "Banks are by this

law pronounced totally unworthy of public respect or confidence."⁴⁵

The legislature of 1858 postponed action on a third banking problem.

In 1854, the Democrats had banned from circulation in Ohio notes

of under $10 in denomination issued by non-Ohio banks. In 1856, the

Republicans repealed this law.⁴⁶ In April, 1858, however, the Senate

passed a similar ban by a virtually strict party vote, and the vast majority

of Democrats in the lower house (47 to 7) voted for immediate enact-

ment. But for no apparent reason the lower house decided to drop the

measure until the following session.47

The Democrats made no radical changes in 1858. But the party did

introduce practical banking reforms thoroughly opposed by Repub-

licans. From the tone of the newspaper comment of 1857 and from

the evidence of the small-town mobs' actions of late 1857, the

Democrats' legislative activities reflected deep popular concern about

the banks' failure in the financial crisis. Banking continued to pose

difficult technical problems for the legislators: Ohio's bank tax laws

were not brought into orderly shape until 1861.48 However, public

disquiet abated as the banks resumed specie payments by mid-1858.

44. Jan. 14, March 2, March 31, 1858, Clippings Scrapbook, W. H. Smith papers,

Ohio Historical Society. This is an extremely valuable set of newspaper clippings for

the legislative session. The date I cite is the date of the correspondent's report, not

the date of the newspaper issue in which it appeared. W. H. Smith was the Columbus

correspondent of the Cincinnati Commercial. Morgan Weekly Herald, Feb. 18, 1858;

Spirit of the Times, March 23, 1858; Roseboom, Civil War Era, 140-41.

45. Morgan Weekly Herald, Sept. 30, 1858: also Apr. 22, Oct. 7, 1858; Marietta

Intelligencer, Sept. 1, 1858; Stark County Democrat, Sept. 22, 1858; Athens Messenger,

Apr. 23, 30, Oct. 1, 1858.

46. Huntington, "History of Banking and Currency," 446-48.

47. Journal of the Senate, 300; Journal of the House, 567-68, 594.

48. Huntington, "History of Banking and Currency," 463. Governor Chase himself

clearly saw the Democratic legislators' work in sharp partisan terms. He wrote to

congressman Sherman, "Our Legislature made itself generally odious: and there is a

58                                                         OHIO HISTORY

The recession of 1857-58 marked, in Ohio at least, the convergence

of two broad economic issues in state politics. Traditional Jacksonian

banking questions-about state independent treasuries, levels of bank

taxation, and restrictions on notes of small denomination-continued

to unite Democrats and set them apart from their political opponents.

But a new set of economic problems, created by railroads, arose for

the first time in 1858 and cut across party politics. This development

presaged the pattern of events following the Civil War, when railroad

regulation-one of the three main political issues in the states, together

with black suffrage and temperance-totally eluded party ideology and

manipulation.⁴⁹ Such failure to hammer out fairly distinctive party

principles and solutions to major economic problems constituted

something of a departure in American politics: for, on most such

problems of grave public concern-currency, banks and tariffs are

examples-parties tended to formulate contrasting policies.⁵⁰

Railroads throughout the country experienced financial difficulties

as a direct result of the panic of 1857. These difficulties partly arose

from expansion undertaken in the mid-1850s: receipts did not rise

quickly enough to cover expenditures and interest payments on

capital."⁵¹ Yet if the railroads suffered financial hardship from the

general economic recession, Ohio's state-owned canal had already

suffered acutely from railroad competition, and by 1858 was losing

money heavily. Many legislators therefore sought to sell the 800-mile

canal.⁵² The attempt to sell the canal drew a highly pragmatic response

from the legislators: economic interest came before ideology. A bill

providing for sale at a minimum price of $2,500,000 was passed by the

lower house. Republicans favored sale more clearly than did the

Democrats, but both parties split over the issue: the vote was 25

Democrats and 29 Republicans for sale, and 27 Democrats and 13

good spirit among the Republicans for the coming campaign." S. P. Chase to Sherman,

Columbus, May 6, 1858, John Sherman papers, Library of Congress. Ohio's leading

Democratic newspaper proudly boasted of the legislature's achievements: Cincinnati,

Daily Enquirer, Apr. 9, 15, 1858.

49. Collins, "Non-sectional issues in American politics," 717-19; James C. Mohr

(ed.) Radical Republicans in the North: State Politics during Reconstruction (Baltimore,

1976).

50. Joel H. Silbey, The Shrine of Party: Congressional Voting Behavior, 1841-1852

(Pittsburgh, 1967); Ershkowitz and Shade, "Consensus or conflict?"; Collins, "Ideology

of the Ante-Bellum Northern Democrats."

51. Albert Fishlow, American Railroads and the Transformation of the Ante-bellum

Economy (Cambridge, Mass., 1965), 171-89.

52. Roseboom, Civil War Era, 102, 104; Annual Report of the Auditor of State,

Ohio, General Assembly, Legislative Documents for 1859 (Columbus, 1860), part II,

84, 99; Harry N. Scheiber, Ohio Canal Era: A Case Study of Government and the

Economy (Athens, Ohio, 1968), 327-28.

60                                                           OHIO HISTORY

sell state assets, for money would be short and new investment unlikely

to be forthcoming. Secondly, it could be argued that the canal was not

designed solely for profit, but as a way of opening up new areas and

providing them with access to markets. At least one leading opponent

to the proposed sale, Republican representative Henry Dawes, argued

that railroads had lowered their rates to destroy the canals, but would

promptly raise those rates once canal competition was eliminated.55

Some grounds existed for such fears of corporate power. Although

the sale bill of 1858 forbade transport companies from buying the

state canal, it did not prevent railroad directors and stockholders, as

individuals, from  doing so.⁵⁶ In response to the financial crisis, some

railroads had already considered raising their freight rates.⁵⁷ Other

railroads sought to maintain their share of the freight market by entering

pooling arrangements.⁵⁸ Direct grievances against railroad corporations

also emerged from the crash. The Marietta and Cincinnati railroad,

for example, after going bankrupt reorganized itself to begin operations

anew in 1860. Reorganization entailed losses to mainly local stock-

holders, while the mortgage bondholders-mostly metropolitan and

foreign capitalists-lost little in paper values. Much local bitterness

against metropolitan interests ensued and was later manifested in court

litigation.59 Moreover, economic recession and railroads' financial

difficulties provoked resentment against railroad's tendency to charge

long-distance through-rates proportionally lower than short-distance

way rates. Such differential rates drew a flood of petitions to the

legislature in 1860.60

None of these local discontents, however, were articulated in party

rhetoric or policies. The railroad companies themselves were numerous:

in 1860, Ohio had twenty-one railroads operating fifty or more miles

55. J. P. Sperry to R. Howe, March 11, 1858; Howe to Sperry, March 18, 1858,

Richard Howe papers, Ohio Historical Society. Sperry was a Republican state

representative; Howe was Resident Engineer of the Ohio Canal. Morgan Weekly Herald,

Apr. 1, 1858; Marietta Intelligencer, March 31, 1858, Jan. 12, 1859.

56. Feb. 11, 1858, Clippings Scrapbook, W. H. Smith papers.

57. Washington Register, Sept. 9, 1858: newspaper clipping in Erasmus Gest papers,

Ohio Historical Society.

58. J. H. Barnes to Gest, Baltimore, Nov. 28, 1857, E. Gest papers: this letter provides

details of pooling negotiations.

59. Taft and Perry to T. Ewing, Cincinnati, Nov. 26, 1857, Thomas Ewing papers,

Library of Congress; John E. Pixton, Jr., "Faith vs. Economics: The Marietta and

Cincinnati Railroad, 1845-1883," Ohio Historical Quarterly, 66 (1957), 1-10. For

another example of rivalries between different groups of investors-this time in the

Cincinnati, Wilmington, and Zanesville railroad-see M. Bell Vennard, Jr., to Gest,

Baltimore, Nov. 10, 1857, E. Gest papers.

60. Roseboom, Civil War Era, 115-17; Harry N. Scheiber, "Urban Rivalry and

Internal Improvements in the Old Northwest, 1820-1860," Ohio History, 71 (1962),

227-39; Marietta Intelligencer, Dec. 2, 1857.

Economic Issues                                                        61

of track, whereas, for example, Illinois had only twelve.61 Serving

regions rather than Ohio as a whole, these various companies did not

draw statewide criticisms. And criticism of practices such as differential

freight-rates was always vitiated by popular pressure for good com-

munications. The basic confusion of late nineteenth century politics-

how to cope with institutions which everyone wanted but whose practices

disturbed many responsible community leaders-affected Ohio on a

large scale for the first time in the late 1850s.

But what relevance did such matters have to purely party politics?

It seems-and this is an hypothesis rather than a firm conclusion-that

expansive community and local interests sustained party competition.

States where economic development was most advanced and complex

tended to produce more competitive party politics in 1860 than states

which had simpler economic structures.⁶² Of course, the most important

issues associated with economic advance-the establishment and devel-

opment of railroads-could not be molded into party doctrines or

platforms. But arguments about particular railroads and transport

policy in general so divided localities (towns and counties) and so

fragmented the state that competition between "ins" and "outs" at

the local level flourished. Where political parties were separated by other

beliefs-and in Ohio racism and traditional banking questions were

divisive at least as late as 1857-those parties' competitiveness was

reinforced locally by their emphasis on local railroad issues in an entirely

random, pragmatic fashion. In that sense, local railroad disputes

fueled party competition without being amenable to statewide party

definition. 63

Because of the local, nonpartisan nature of disputes over railroads,

and because they maintained their traditional appeal by stirring up

Jacksonian anti-bank sentiment, the Democrats remained a viable,

indeed very popular, party despite their image as lackeys to the South.

But, if certain economic issues worked so much in their favor, why

were they not more popular in the midterm congressional elections

of late 1858? The elections occurred, after all, in a period of economic

recession.

61. Statistics of the United States (Including Mortality, Property, etc.), 329-31.

62. A measure of party competitiveness is provided in Silbey, Respectable Minority,

22: the more competitive free states in 1859-60 were, in descending order of competitive-

ness, Illinois, New Jersey, Indiana, Connecticut, New York, New Hampshire, Ohio; the

less competitive states, again in descending order of competitiveness, were Michigan,

Minnesota, Maine, Rhode Island, California, Massachusetts, and Vermont. The seven

more competitive states were clearly more economically diversified than were the seven

less competitive ones.

63. For examples of efforts to promote, or disputes over, local economic development,

see Athens Messenger, Sept. 18, 1857; Marietta Intelligencer, Sept. 16, 1857; M'Connels-

62                                                        OHIO HISTORY

Democratic electoral failure in 1858 partly reflected the party's

extreme embarrassment over the disastrous policy pursued by President

James Buchanan in Kansas. It also resulted from the Republicans'

capture of the remaining votes given to the third party of 1854-57,

the Know-Nothings. In 1857, the Know-Nothings had obtained just

over 3 percent of the gubernatorial vote, as against just over 48 percent

obtained by Republicans and Democrats alike. With the Know-Nothings

disappearing in 1858, the Republicans advanced from receiving about

48.5 percent of the vote in state elections in 1855, 1856, and 1857, to

52.9 percent in 1858.64 But Republicans' success in retaining their

previous support while attracting new supporters from the defunct

third party depended partly on their handling of economic issues arising

from the panic. They attacked the Democratic federal administration

for fiscal incompetence.

In March 1857 when James Buchanan became president, the federal

administration had long enjoyed healthy budget surpluses. But by

December 1857 the disruption of international trade severely cut the

federal government's revenues, because those revenues were largely

derived from customs receipts. In December, 1857, and again in

1858, the federal government was forced to resort to short-term

borrowing to maintain its income.⁶⁵ This sudden and substantial

dependence upon short-term fiscal expedients naturally exposed the

Democratic federal administration to Republican attack. John Sherman,

as a young congressman from Ohio, made his first congressional speech

on financial questions on 27 May 1858 with a carefully-researched critique

of administration policy. Previously Sherman had devoted his attention

in Congress to slavery-extension issues, but he now saw the need to

broaden his criticism of Democratic policy. His speech was a success:

it was widely noticed and praised in 1858, and Sherman was still proud

of it when he wrote his memoirs in the 1890s.⁶⁶ Ohio's Republicans

generally based their campaign for the congressional elections of 1858

on opposition to slavery extension and the political aggressions of the

Slave Power and on sustained attacks on the Democratic federal

ville, Morgan Weekly Herald, Sept. 17, 24, Oct. 1, 8, 1857.

64. Shortridge, "Voter Realignment in the Midwest during the 1850s," 207-18;

Tribune Almanac and Political Register for 1856 (n.p., n.d.), 44, ibid; for 1857, 57,

ibid;for 1858, 59, ibid;for 1859, 57.

65. Richard H. Timberlake, Jr., "The Independent Treasury and Monetary Policy

before the Civil War," The Southern Economic Journal, XXII (1960), 92-103; New York

Times, Sept. 26, 28, 1857; Rafael A. Bayley, The National Loans of the United States

from July 4, 1976 to June 30, 1880 (Washington, D.C., 1881), 74-75, 149-50.

66. John Sherman, Recollections of Forty Years in the House, Senate and Cabinet

(London, n.d.), I, 153-54; Collins, "The Democrats' Electoral Fortunes during the

Lecompton Crisis," 327.

Economic Issues                                                     63

administration for overspending and fiscal irresponsibility. The tone

of the campaign was set in July by the Union Republican state

convention. Whereas the party conventions of 1856, 1857, and 1859

passed eight, fourteen, and ten resolutions, respectively, the convention

of 1858 passed only four resolutions. A resolution criticizing the federal

administration's fiscal record was actually longer than the only other

substantive resolution, which opposed the Lecompton constitution;

the administration was guilty of such "ruinous and corrupt prodigality"

that the country had to choose between "National Bankruptcy or

National Reform."⁶⁷ This charge was repeatedly made during the

campaign, and it was made, according to Governor Chase, while

some Republican candidates adopted a disgracefully weak line against

slavery extension.⁶⁸

The Republicans have recently been somewhat misleadingly portrayed

as the embodiment of confidence and progressivism in the 1850s.⁶⁹

Actually, however, when they became the party of the majority in

Ohio in 1858, they espoused retrenchment and conservatism. Economic

issues arising from the panic of 1857 thus helped the Republicans to

broaden their appeal and pose as the sensible party of fiscal responsi-

bility in 1858.

Economic issues arising from the panic of 1857 had four important

effects on Ohio's politics in 1857-58. First, such issues furnished

evidence that Democratic public rhetoric and legislative action were

distinctive on some major state policies. Jacksonian anti-banking

rhetoric was regurgitated not for reasons of political piety, but because

Ohio's banking system-its extent, tax liabilities, and relations with

the state treasurer's office-was unsettled. It is impossible to show

the impact of that rhetoric upon the electorate. But clearly the

Democrats treated banking issues very seriously indeed in the autumn

of 1857 in their efforts to win the gubernatorial election. Race and

banking issues were probably the main components of their electoral

appeal. Secondly, however, the Republicans after the election were

able to turn public anti-banking sentiment to their own advantage by

identifying themselves with the grievances felt by small-town "mobs"

against metropolitan bill-brokers. The actions of those "mobs" also

67. The Ohio Platforms of the Republican and Democratic Parties from 1855 to

1881 inclusive (pamphlet, n.d., n.p.: in Western Reserve Historical Society), esp. 7-8.

68. Athens Messenger, Sept. 3, 10, 1858; Marietta Intelligencer, Sept. 8, 15, Oct. 6,

1858; Morgan Weekly Herald, Apr. 22, 29, Dec. 2, 1858; H. Greeley to Chase, Sept. 28,

1858; Chase to Gerrit Smith, Oct. 12, 1858, Chase papers, Historical Society of

Pennsylvania.

69. Eric Foner, Free Soil, Free Labor, Free Men: The Ideology of the Republican

Party before the Civil War (New York, 1970).

64                                                   OHIO HISTORY

provide evidence of the continuing public interest in non-sectional

"political" issues. But during 1858 the banks recovered from the

financial crash. A longer-term financial consequence of the panic was

felt by railroad companies. The third significant effect of economic

issues was that various public grievances at railroad practices were

not shaped into coherent party doctrines or rhetorical appeals. Because

railroad problems and grievances were so varied, they afforded great

scope for local party disputes and thereby help to explain local variations

in party strength. But railroad problems were not handled for party

purposes in the way that banking issues had been in the rhetoric of

1857 and the legislation of 1858. Finally, the fiscal plight of the

Democratic federal administration, entirely resulting from the crash

of 1857, enabled the Republicans to broaden their campaign rhetoric.

In mid and late 1858 the Republicans wished to appeal to the remaining

Know-Nothing voters of the previous year and to avoid concentrating

entirely on slavery extension issues when the Lecompton problem was

effectively resolved in August, 1858. The cry for federal retrenchment

in spending in 1858 helped the Republicans to create a "safer," more

conservative image of themselves than they had possessed in the days

of protest in 1854-56. In these ways, a consideration of both economic

issues and the complex interaction of state and federal questions is

essential to an understanding of late antebellum politics.