It is an October evening in 1835, and the adherents of the New York Democracy are eagerly milling about before the doors of Tammany Hall. For those doors are about to open, and the party will then convene, name its chairman, and adopt its platform.
The hour of seven o'clock arrives. The doors swing open, and a torrent of excited humanity pours into the old meeting house. The hour is at hand for the adoption of resolutions damning the unholy alliance of State and Monopolists which has crushed the small businessman, mechanic, artisan, and workingman under a burden of special privilege and manipulated debt.
But wait! The multitude are not yet in their seats, but George D. Strong, president of the Commercial Bank, has already nominated bank director Isaac L. Varian for chairmanship of the meeting! The bankers have rigged the meeting! But the Equal Rights Democracy is equal to the occasion. Before the eyes of the multitude a banner unfolds, bearing the slogan "Joel Curtis—the Anti-Monopolist Chairman." The invincible leader of the people, Alexander Ming, Jr., demands that a vote be taken, and the walls echo with cries of "Curtis! Curtis! Curtis!"
Isaac L. Varian, in temporary possession of the rostrum, is helpless to restore order. Nervously he devises a plan to escape the platform but is restrained by bank president Strong. As they jostle, the chair is overturned,and quick as the bullet from Andy Jackson's dueling pistol, the true-hearted workingman Joel Curtis leaps to the rostrum. A great cheer goes up. The people of the Democracy have slain the demon of Monopoly in its very temple!
Varian and Strong disappear down the back stairs from whence they came. A moment later, the great hall lapses into darkness. The scoundrels! They have doused the gas lights on their precipitate flight from the scene of their defeat. But the Equal Rights Democracy is once again prepared. "Let there be light!" shouts the redoubtable Ming, and as if by magic the members of the Equal Rights Democracy bring forth the new strike-anywhere "Loco-Foco" matches and ignite candles brought for just such a contingency. The last foul strategy of demon Monopoly has been vanquished!
FREE AND EQUAL And then, in the candle-lit auditorium, amid ringing huzzas that shake Old Tammany to its foundations, the Equal Rights Democracy of New York City endorses the anti-monopoly Democratic ticket and adopts a host of thunderous resolutions:
Resolved: That in a free state, all distinctions but those of merit are odious and oppressive, and ought to be discouraged by a people jealous of their liberties.
That all laws which directly or indirectly infringe the free exercise and enjoyment of equal rights and privileges by the great body of the people, are odious, unjust, and unconstitutional in their nature and effect, and ought to be abolished.
For all amounts of money, gold and silver are the only legitimate, substantial and proper circulating medium of our country.
That perpetuities and monopolies are offensive to freedom, contrary to the genius and spirit of a free state and the principles of commerce, and ought not to be allowed.
That we are in favor of a strict construction of the Constitution of the United States, and we are therefore opposed to the United States Bank.…
That we are opposed to all bank charters granted by individual states, because we believe them founded on, and as giving an impulse to principles of speculation and gambling, at war with good morals and just and equal government, and calculated to build up and strengthen in our country the odious distribution of wealth and power against merit and equal rights.…
Additional resolutions favored direct election of the president and vice-president, short terms for all offices, strict accountability to the people, and the right of instruction by the party of its candidates for office.
Thus concluded the most dramatic event in the short but influential life of the "Loco-Foco" Party, as it was derisively termed by the Democratic and banking establishment.
HARD MONEY The seeds of the Equal Rights Democracy had been sown in the late 1820s in a brief movement called the Workingmen's Party. When that movement collapsed, its spirit lived on in the scathing editorials of the New York Post's brilliant William Leggett (see "Leggett: 19th-Century Libertarian," REASON, Feb. 1977), until the arrogant actions of the bank monopolists called forth public outcry within the ranks of the New York Democratic Party.
In those days, a bank might do business only if granted a charter by special act of the legislature. Since private banking offered a golden opportunity to issue unsecured bank notes to the gullible, it was a much- sought-after privilege. Indeed, it was so much sought after that on occasion considerable sums of real money were said to have changed hands prior to a legislative vote. When in 1829 the New York banks–backed by a compliant state government in Albany—contrived a "Safety Fund" to avert the consequences of bank runs and insolvencies, this union of predatory bankers and captive government sparked the Loco-Foco revolt.
The Loco-Focos were, in the words of financial historian Bray Hammond, the proponents of an urban and industrial version of Jeffersonian agrarian egalitarianism. They were the mechanics, small-tradesmen, and workingmen of emerging capitalism, and they were increasingly outraged at the machinations wrought upon them by special privilege conferred by government.
The 1836 Loco-Foco Declaration of Principles laid down their fundamental belief: "unqualified and uncompromising hostility to bank notes and paper money as a circulating medium, because gold and silver is the only safe and constitutional currency." The Loco-Focos recognized that government-authorized issue of private paper money, not backed by specie, meant that increasing amounts of "money" would inflate the prices of rents and commodities, thereby penalizing savings and honest labor. "As the currency expands," they cried, "the loaf contracts." They saw fortunes made in manipulation of intrinsically worthless paper, under the protection and encouragement of a state government hypocritically pretending to protect the rights of the people.
DEBASEMENT Their objection was not only that they were the victims. It was far more principled and high-minded than that. The Loco-Focos sincerely believed that stock-jobbing, speculation, and manipulation of worthless paper were fundamentally immoral and that those who sought to profit by these practices were infecting republican institutions. The result could only be a debasement of the sacred principles of the Declaration of Independence.
Their pure view of government was clearly expressed in their 1836 Declaration. "The rightful power of all legislation," they proclaimed, "is to declare and enforce only our natural rights and duties, and to take none of them from us. No man has a natural right to commit aggression on the equal rights of another; and this is ALL from which the law ought to restrain him.…The idea is quite unfounded that on entering into society, we give up any natural right."
The Loco-Focos also had a high-minded view of how an honorable credit system would operate. Enthusiastic applause punctuated the reading of a letter from Samuel Young to a party meeting in 1837, in which Mr. Young set forth these principles: "Credit is the offspring of the individual confidence which one man reposes in his fellow-man. It results from the security which one individual feels in the integrity and ability of another. Like love, joy, hope, faith, confidence, &c., it is an emotion of the heart which was bestowed upon man for beneficial purposes, and can be well regulated only by individual impulse and direction. Legislation cannot create, but may mar and destroy it. If government should institute monopolies to make discounts of love and matrimony, those commodities would soon become as spurious and as much below par as the bills of the broken banks. The late explosion of the banking system [the Panic of 1837] is an eminent example of the extent to which the misdirected framers of human government in the creation of monied monopolies may paralyze and extinguish individual credit and confidence. The principle of free competition which was implanted in man by his maker, is the only sure and safe regulator of all the business purposes and pecuniary transactions of human society. But the [advocates] of legislation have pronounced the great Architect to be a bungler, and have essayed to better the movements of the machinery, by applying to the community the strait jacket of restraining and usury laws, and the complex tourniquet of 'safety fund' and 'credit system.' Demoralisation, oppression, taxation, fraud, perjury, and failure, ever have been, and will ever be the result, until mankind shall acquire sufficient strength and confidence in themselves to tear off these shackles."
RISE AND FALL The dramatic Loco-Foco takeover of Tammany Hall caused extreme consternation among the Regency Democrats and their bank allies. "The cholera itself scarcely carried with it more terrors," wrote one leading New York Democrat to President Van Buren. Governor Marcy, with an utterly straight face, lamented the appearance of the "hideous monster of Loco-Focoism." Certainly, if the Loco-Foco movement were to prevail, many a sweetheart deal between the politicians and the bankers would be swept away, exposing the latter to the unspeakable perils of free competition.
After one turbulent mass meeting in February 1837—which degenerated into the looting of various provision houses by some hungry hangers-on excited by the Loco-Foco rhetoric—the Loco-Focos came together in May to again denounce the banks and to "adopt measures to retrieve our country from the desolating influence of paper money." A few days later, runs on several banks, leading to the suspension of specie payment, were interpreted by the Loco-Focos (without justification, as it turned out) as evidence of growing public support for their principles. So was the outcome of the 1837 legislative elections, in which a Democratic majority of 82 in Albany was converted to a Whig majority of 64, a net change of 146 seats. While the Loco-Focos, as a faction of the Democratic Party, had little reason to support the largely unprincipled Whigs, they had great reason to punish backsliding and corrupt Democrats, which accounted for a handful of the Democratic defeats.
Meanwhile, in September 1837, President Van Buren, a New Yorker, asked Congress to create an independent sub-Treasury system to manage the government's accounts in specie only, ending all reliance on private bank deposits or notes. Damning the incestuous relationship between the banks and the government, Van Buren declared that "government was not intended to confer special favors on individuals or on any classes of them.…The less government interferes with private pursuits the better." This was pure Loco-Foco doctrine, and the New York faithful toasted the message with shouts of exultation.
For seven years, 1837-1844, the anti-monopoly, hard-money, Jeffersonian tenets of the Loco-Focos dominated national Democratic Party doctrine. But in the city of its birth, Loco-Focoism fell prey to the fate of many an idealistic reform movement. With Van Buren's apparent espousal of their doctrines, the Loco-Focos, in modem parlance, "had the action." So the regular Democrats, yielding to unpleasant necessity, recruited the most electable and least ideological leaders from Loco-Foco ranks. The movement split into "rump" and "buffalo" factions, the one holding out for a restoration of true Jeffersonian democracy, the other seeking a tactical alliance with the party regulars.
By 1840 it was finished. Of the Loco-Foco faithful, only one remained, a mildly retarded but enthusiastic gentleman who, at the appointed time for monthly meetings, religiously repaired to the old Fifth Ward Hotel. But the meeting room, for so long the scene of tumultuous demonstrations against special privilege and for the equal rights of the people, had long since fallen silent. And when one day the wrecking ball came to the Fifth Ward Hotel, that abandoned old man stood on the sidewalk, tears running down his cheeks, as the last symbol of Loco-Focoism passed silently into history.
John McClaughry, a frequent REASON contributor, is the director of the Institute for Liberty and Community and is presently serving on the National Commission on Neighborhoods.