Democracy and Banking
Americans ushered in their independence with a depression. As a result of British restrictions upon the trade and shipping of the United States, a postwar buying spree in which Americans went heavily in debt to British merchants, and the deflation which followed the inflation of the war years, the new republic was obliged at the outset of its existence to contend with economic difficulties that would have taxed the resources of a far stronger government than that which had been created by the Articles of Confederation.
For those who had gone in debt while money was cheap and the country was prosperous, the deflation was a chastening experience. They found themselves obliged to pay their debts and taxes at a time when money was almost unobtainable, paper money being completely discredited and specie having taken wing to Great Britain. As a result, thousands of onceprosperous Americans farmers were faced with ruin at the hands of their creditors or the tax collectors. At the same time it began to appear that the merchants, speculators and profiteers who had taken advantage of the opportunities afforded by the war for money-making were the material heirs of the Revolution: a new ruling class had stepped into the shoes of the expropriated Loyalist aristocracy. Americans no longer located the seat of tyranny three thousand miles away: it had moved its residence, they declared, to the countinghouses, banks and great landed estates of the wealthy. From these new "headquarters of oppression," they believed, emanated the taxes which bore more heavily upon the poor than upon the rich, the laws put debtors at the mercy of their creditors, and the favoritism of the courts of justice to privileged members of the community.
Instead of accepting this state of affairs as the inexorable consequence of the workings of economic laws, the victims of the depression demanded that something be done to meliorate its effects. Accordingly, when debtors gained control of a state they enacted laws designed to restore prosperity. These measures took the form of stay laws (which imposed a moratorium upon the collection of debts); tender acts (which permitted debtors to pay