The Panic of 1819 and the real estate collapse The Panic of 1819 decimated these speculators. As the first bankruptcies and foreclosures came in, the banks in Kentucky belatedly realized they had overextended themselves. As their gold was called back to the east they were unable to write loans commensurate to the needs of the real estate speculators who then withered on the vine, their rage growing hotter by the day. Common farmers found themselves shut off as well and joined the chorus of anger. The elite of Kentucky society supported the banks. Most of them were creditors and were philosophically amenable to the virtues of a gold standard. Land speculators were usurpers in the eyes of this crowd, and the panic was now giving them their just comeuppance. Many of these elite were planters who owned slaves and had established plantations. They had invested in the banks in many cases and stood to lose greatly from any sort of debt forgiveness or inflation. The speculators and indebted farmers of the state formed the Relief Party to press their claims. Above all they wanted inflation. They elected majorities to the state legislature in the 1820 elections who promised to fulfill these goals. Conservatives in Kentucky and elsewhere looked upon these developments aghast. Kentucky had been among the first states to remove property qualifications as a criteria for voting, and now it seemed to those outside the fray like a rabble had seized control of an entire state government.
Posted on: Wed, 05 Nov 2014 02:30:00 +0000
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