Historum - History Forums  

Go Back   Historum - History Forums > World History Forum > American History
Register Forums Blogs Social Groups Mark Forums Read

American History American History Forum - United States, Canada, Mexico, Central and South America


Reply
 
LinkBack Thread Tools Display Modes
Old June 28th, 2013, 12:28 PM   #1

Aya Katz's Avatar
Citizen
 
Joined: Jun 2012
From: The Missouri Ozarks
Posts: 38
Blog Entries: 11
Causes of the Run on the Banks in New Orleans in 1814


When there was a run on the banks in 1814 in New Orleans, everyone blamed the Baratarian smugglers -- Jean Laffite and Pierre Laffite and company -- for the shortage of silver and gold.

Pam Keyes has recently published an article explaining that the true cause of the run on the banks was the machinations of bank cashiers trying to best each other.

http://www.historiaobscura.com/the-new-orleans-bank-run-of-1814/

I don't actually understand how a bank run could be anyone's fault except the banks' for being under-capitalized. How could a bank run result in an indictment for piracy?
Aya Katz is offline  
Remove Ads
Old June 28th, 2013, 09:20 PM   #2
Scholar
 
Joined: Aug 2012
Posts: 669

I think there isn't the kind of quality statistical information necessary to come to any kind of firm conclusion on this subject. Especially very early economic information in the United States is often extremely lacking.

Still, one can speculate. Perhaps war-time uncertainty caused specie hording. Perhaps the blockade caused such a significant disruption to the flow of specie money through the New Orleans financial system that the New Orleans banks were left with severely thin reserves (and thus vulnerable to a sudden confidence shock). The smuggler's actions may indeed have cause issues if they were declining to deposit their profits in specie at New Orleans banks.

Consider this a tag. I'm curious as to whether there is anyone who knows more.
MAlexMatt is offline  
Old June 29th, 2013, 07:38 AM   #3

Aya Katz's Avatar
Citizen
 
Joined: Jun 2012
From: The Missouri Ozarks
Posts: 38
Blog Entries: 11

Quote:
Originally Posted by MAlexMatt View Post
The smuggler's actions may indeed have cause issues if they were declining to deposit their profits in specie at New Orleans banks.
I'll concede that a reluctance to deposit money in the bank by those who have money may be one of the causes of a bank's failure, just as a reluctance to buy goods by those who can afford to can lead to the failure of a store, but what seems odd is to bring criminal charges for causing the failure in this way.
Aya Katz is offline  
Old June 30th, 2013, 07:17 PM   #4
Suspended indefinitely
 
Joined: Jan 2013
Posts: 445

Jean Laffite was the original mafia godfather in the USA. He ran goods up the "Contraband Bayou" into Lake Charles to avoid import tax. Yes, it was a hard group Jackson put together...but they crushed the "right and proper" British Army at N.O. bad "tea-time" that day.
IKE52 is offline  
Old July 1st, 2013, 07:48 AM   #5

JTWuest's Avatar
Historian
 
Joined: Dec 2012
From: Savannah, GA
Posts: 1,116

If this subject interests you than you absolutely must read this book.

[ame="http://www.amazon.com/Nation-Counterfeiters-Capitalists-Making-United/dp/0674032446"]A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States: Stephen Mihm: 9780674032446: Amazon.com: Books@@AMEPARAM@@http://ecx.images-amazon.com/images/I/51q87mWIiiL.@@AMEPARAM@@51q87mWIiiL[/ame]

Personally, I think the evidence presented in this book puts Andrew Jackson and others against the creation of a national bank in a pretty bad light.
JTWuest is offline  
Old July 1st, 2013, 02:22 PM   #6
Scholar
 
Joined: Aug 2012
Posts: 669

Quote:
Originally Posted by JTWuest View Post
If this subject interests you than you absolutely must read this book.

A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States: Stephen Mihm: 9780674032446: Amazon.com: Books

Personally, I think the evidence presented in this book puts Andrew Jackson and others against the creation of a national bank in a pretty bad light.
Antebellum banking is one of my favorite research topics and I'm immediately suspicious of this book. It seems to be upholding a view of the era that prevailed up until the 70's and 80's when serious, rigorous statistical analysis of the 'free banking' era really began.

I will withhold real judgment until I can pick up a copy, but I wouldn't put absolute faith into it. Like most popular history of an obscure topic, it's probably a few decades out of date.
MAlexMatt is offline  
Old July 1st, 2013, 02:42 PM   #7

JTWuest's Avatar
Historian
 
Joined: Dec 2012
From: Savannah, GA
Posts: 1,116

Actually it was published in 2008 by Harvard University Press. The author Stephen Mihms is a very highly regarded US economic historian, it certainly isn't what I'd call popular history.
JTWuest is offline  
Old July 1st, 2013, 03:45 PM   #8
Scholar
 
Joined: Aug 2012
Posts: 669

OK, I will look into. The Amazon description just made me rather...suspicious of what the contents might be.
MAlexMatt is offline  
Old July 8th, 2013, 05:48 AM   #9

Aya Katz's Avatar
Citizen
 
Joined: Jun 2012
From: The Missouri Ozarks
Posts: 38
Blog Entries: 11

Quote:
Originally Posted by IKE52 View Post
Jean Laffite was the original mafia godfather in the USA. He ran goods up the "Contraband Bayou" into Lake Charles to avoid import tax. Yes, it was a hard group Jackson put together...but they crushed the "right and proper" British Army at N.O. bad "tea-time" that day.
Well, if by "mafia godfather" you mean a smuggler who did not pay import taxes and therefore saved the American consumer money that would have gone to finance the likes of Commodore Patterson of the US Navy, then yes that was what Jean Laffite was. But they called him a pirate, and he wasn't one.

I think that not only were the Baratarian's a better defense force than the conventional govt armed services paid for by taxes, but that this way of funding war is preferable for a number of reasons. I wrote about it here:

Who Should Pay for Waging War? | PubWages
Aya Katz is offline  
Old July 8th, 2013, 05:52 AM   #10

Aya Katz's Avatar
Citizen
 
Joined: Jun 2012
From: The Missouri Ozarks
Posts: 38
Blog Entries: 11

Quote:
Originally Posted by JTWuest View Post
If this subject interests you than you absolutely must read this book.

A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States: Stephen Mihm: 9780674032446: Amazon.com: Books

Personally, I think the evidence presented in this book puts Andrew Jackson and others against the creation of a national bank in a pretty bad light.
So I take it this book supports the Hamiltonian view of centralized banking.
Aya Katz is offline  
Reply

  Historum > World History Forum > American History

Tags
1814, banks, orleans, run



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
The 1814 Burning of Washington DC Salah American History 103 August 2nd, 2013 02:30 PM
Hartford Convention 1814 tjadams Speculative History 3 January 13th, 2013 03:17 PM
The Spanish Ulcer, 1808-1814 SPERRO War and Military History 36 October 18th, 2011 12:30 PM
The Congress of Vienna 1814-15 Bismarck European History 23 October 23rd, 2010 01:38 AM

Copyright © 2006-2013 Historum. All rights reserved.