HARD TIMES AT MONTICELLO - Tambora: The Eruption that Changed the World - page 126

ican soil in a single year. Official records were not kept in the days of the early republic, but
even during the French Terror of the mid-1790s, annual migration from Europe to the United
States never reached 10,000. In 1817, it spiked to 22,240. 41 To this must be added the British
migrants who teemed south across the border from British Canada: 10,000 in 1817, swelling
to 14,500 in 1818. 42 Few, it seems, intended to settle in the established cities of the North-
east. “I can scarcely walk a square,” a Philadelphian reported, “without meeting with Irish,
Dutch, English, and Scotch emigrants, whose destination is principally Ohio and Indiana.” All
of which meant bad news for the American Indians, who continued to be forced west to make
way for the new arrivals. As a consequence of the first major westward expansion in U.S. his-
tory, a flurry of “treaties” formalized the ejection of indigenous peoples from lands they had
inhabited time out of mind.
At the height of America's first real estate bubble, land prices out west replaced the
weather as the “perpetual topic of conversation.” 43 Makeshift banks sprung up overnight to
handle the deluge of new settlers and their land claims. “The children of Israel could scarcely
have presented a more motley array,” recalled pioneering geographer Henry Schoolcraft, who
traveled with the legions of migrants along the rivers to the interior. Expectations were run-
ning high: “To judge by the tone of general conversation, they meant, in their generation, to
plough the Mississippi Valley from its head to its foot…. What a world of golden dreams was
there!” 44 People called it “Ohio fever,” which one no sooner recovered from than “Missouri
fever” or “Illinois fever” took hold. Before the fever finally broke with the Panic of 1819, five
new states had been established: Illinois, Indiana, Kentucky, Alabama, and, controversially,
Missouri in 1820.
The land rush of 1817-18 lacked one crucial ingredient, however: capital. No national
currency was in place to fund the large-scale movement of population across state lines into
“empty” territory. Moreover, the hard currency Americans depended on—mostly Spanish sil-
ver—was simultaneously flowing in the opposite direction toward Europe to pay for the glut
of imported British manufactures following the end of the war and to retire national debt.
People fled west as money fled east. With specie scarce and no established financial institu-
tions across the Appalachians, the frontier land drive ran on confidence alone, through the
circulation of notes of credit backed by personal endorsements.
In his letters, Thomas Jefferson said little of his own financial woes but predicted disaster
for the country. The new national bank, to which he had essentially mortgaged his property,
had been created on April 10, 1816—the ill-omened first anniversary of Tambora's eruption.
Within a few short years, its haphazard policies would help trigger an implosion across the
entire U.S. economy. To finance the land boom, the light-headed directors of the bank issued
notes in excess of $22 million against a specie reserve of barely $2 million—at a time when
the average farm laborer earned about $10 a month. America in 1817 was, as one pamph-
leteer later put it, a country of “paper gold, and paper land, and paper houses, and paper
revenues, and paper government.” 45
This paper edifice of prosperity duly went up in flames. In July 1818 the national bank,
wary of collapse, directed its branches to sharply reduce the issue of notes. Adding to the
sense of crisis, the bank announced that its own loans would be renewed in the future only at
a reduction of 12½ percent, with the debtor liable for the balance. Jefferson was with James
Madison, about to meet with fellow trustees of the planned University of Virginia, when he
got the news. It came upon him, he wrote that day, like “a clap of thunder.” 46 He had no cash