SOUTHWESTERNERS were reluctant to abandon their hopes for quick riches immediately after the Panic. But in the early 1840s, when they finally had to admit defeat and recognize that the whole inflated economic system had been built on false optimism, Democrats in Mississippi, Louisiana, Arkansas, and Alabama took more drastic steps against the banks than did most of their compatriots elsewhere. By the middle of the decade two states, Louisiana and Arkansas, had succeeded in constitutionally prohibiting banks within their boundaries, and Alabama and Mississippi were in the process of winding up their broken banks by legislative action. So, paradoxically, it was the Democrats in the Southwest who eventually were hailed by hard-money Jacksonians throughout the country as being in the vanguard of the fight against the banks.
If Mississippi was the most representative state in the section, the older and more settled Louisiana was the most atypical. Almost all statistics for the years surrounding the Panic point to Louisiana as being the most stable and mature of the Southwest states. The population there was increasing, but not nearly so rapidly as elsewhere in the Southwest. In the decade of the 1830s the free population in Louisiana increased by 50 per cent and the slave population by a third. At the same time, the slave populations of Alabama, Mississippi, and Arkansas doubled, tripled, and quadrupled, respectively. Arkansas's free population tripled during the decade, while Mississippi's doubled. Alabama registered an increase in free population of 60 per cent.1____________________