 Okay, thank you everyone for attending my talk. I'm not sure why anyone chose to do so, but anyway, here we are. So this is Thursday of Mises You, so we've now passed the less interesting lectures. We can get on to the more insightful and profound talks, the ones you'll remember for years to come after my talk, I guess. So anyway, we're gonna talk about the Panic of 1819 and its relevance for today. I was thinking about this as the whole coronavirus crisis was unfolding and the business cycle and all of that and just to draw some parallels to at least just some things that hopefully we will parallel in the future. So the first thing is, one thing I noticed is I don't know what it is with the year 20, but there seems to always be a very serious business cycle then. So you've got 1720, the South Sea bubble, 1820, the Panic of 1819, 1920, the Depression of 1920, and 2020, the coronation or whatever it will be called for years to come. What 2120 will hold, I have no idea, but it probably will not be good. So anyway, I just thought that was a little interesting, but more importantly, what exactly is this presentation about and why should you care? So this is taken from my forthcoming book, sort of tentatively titled, it's on cronyism, it's called Liberty versus Power, A History of Cronyism in the United States, 1607 to 1849, and it goes through sort of the history of special interest legislation. So when you think about cronyism, it's not legislation passed in the public interest but for special interest. So it's one group, a business, trying to get some sort of favor, subsidy, tariff, regulation, discriminatory tax, et cetera, on their competitors, on someone else, so on and so forth. And related to the story, my narrative is the extremely important but it's neglected even in standard American history is the Panic of 1819, which I will show or sort of argue is caused by the second bank of the United States credit expansion. So I'm not the first Austrian scholar to talk about the Panic of 1819, Murray Rothbard did so in his dissertation, the Panic of 1819, and it's something that's still cited very well in the literature. It's really one of the few studies on the Panic of 1819 and it's still held up. So his dissertation that he wrote in the 50s is still being cited today. So I wish my dissertation would still be cited even though it's only been a couple of years and no one's really looked at it, but anyway, I'm optimistic for the future. So I'm gonna try and show is that there's intense cronyism surrounding everything about the Panic of 1819 and the second bank of the United States. And in particular, I'll show that sort of the Panic of 1819 led to a growth in free market economic thought, a revival in sort of anti-Federalism and those constitutional theories and the future Jacksonian coalition that then later got rid of the second bank of the United States and tried to remove or just try to reduce cronyism overall. So hopefully, you know, our future reformers will learn from 1819, especially in my presentation and we'll just have some parallels because you think this serious crisis that we're in, hopefully similar things will happen to growth in free market thought, a change in our constitutional theories and the emergence of some sort of political coalition that will actually put all of that stuff together. So anyway, so we first have to start off with the War of 1812 to sort of go through this stuff. So the War of 1812, in case everyone's forgotten their history, it started in 1812 and I remember like it was 208 years ago. So we originally had a central bank before the second bank of the United States and before the War of 1812. This was the first bank of the United States. I'll actually be talking about this a little bit more in my talk later today. Alexander Hamilton was very prominent in pushing for this bank. It had a 20 year charter and then it's 20 year charter basically was not renewed. In 1813, so in early 1813, the government needs to borrow money. They don't have a bank that just simply monetized the debt. So you have these very prominent Republican financiers, Stephon Gerard and John Jacob Astor. The latter is known for his, he's basically a fur trading entrepreneur who's involved in the fur trade. They purchased about $10 million which was very large out of the loan at that time. It was about like a $16 million loan. So it was about $10 million of high risk government debt. The United States wasn't doing as good as expected in the war. And so when there's a lot of uncertainty over the outcome of a war, the yields on that debt are gonna be very high. The prices are gonna be very low because an entrepreneur that buys this will be taking on a lot of risk. There's a chance that the government will default or repudiate on the debt. So this in itself is just relatively any purchasing high risk debt is itself not an act of cronyism. Now purchasing government debt is a different story. But what makes this especially sort of an act of cronyism is that they wanna reduce the risk of the purchase and they try and do this by basically lobbying Congress to charter another central bank. Because similar to the first bank of the United States, you could purchase your stock. You could purchase stock in the company by exchanging government debt for it. So this would basically do would make it the government debt more marketable and it would boost up the price. So you're basically doing is you have a high risk debt instrument and you're making it a lower risk debt instrument thanks to the government's monopoly privileges that they would give to this institution. 1814 late 1814 state banks suspend species payments. If I had more time we could talk about this but this is just it relates to the panic of 1819. They basically expanded credit too much to help the government finance the war. Normally that would lead to the adverse clearing mechanism but that did not happen. And also significant for this drive is that in October 1814 Gerard and Astor Lobby to make their Philadelphia lawyer, Alexander J. Dallas the new secretary of the treasury. This is an important thing. You wanna always analyze when you're looking at some government official a lot of times you just sort of treat this person as if they had no life and what they did before their job and what they did after their job is completely unrelated to their actual job itself. But as Murray Rothbard once said he goes, these people have lives and it's actually important to look at what they did. So the fact that this guy who became secretary of the treasury was very close to these two financial interests who were pushing for essential bank that should hopefully make you think like, okay, what's going on here? Something sounds a little fishy at least. Okay, anyway, during the war Congress did not charter essential bank but after the war basically when the war ended in early 1815 they try again. So by January 1816, Congressman Henry Clay, Congressman John Calhoun and of course secretary of the treasury, Dallas pushed for the chartering of a new central bank. Okay, when we say chartering it was to get a corporate charter, an essence, a license. A corporation back in the day this is very important not only for the history of cronyism in the panic of 1819 but also just American history. A corporation back in the day was a much different legal entity than what we think of a corporation now. Corporations were basically creatures of the state. In order to use that benefit of limited liability in other various advantages of stock ownership you had to actually have the state legislature charter you, create you a company. They'd say, all right, only you or whatever other companies we create can operate in this particular business. So they were like little monopolies. So when back in the day people were railing against corporations, they weren't necessarily being like the Occupy Wall Street people today. They were actually coming at it from a free market bet because they wanted to get rid of the corporate charter which we eventually did in really in the 1840s and the 1850s. Okay, in this corporate charter it, for the second bank of the United States it contained privileges very similar to what the first bank of the United States possessed only bigger. It had a 20 year monopoly over interstate banking, okay. The main office of this institution was in Philadelphia then the financial center of the country, all right. And it could operate, set up branches all throughout the country, all right. And this was a huge, it was a monopoly. It was this monster. No other, the federal government wouldn't charter another bank with the same, with interstate banking, all right. And states didn't like that because now you had this outside competitor seemingly immune from the market forces. It had a $35 million market capitalization. $20 million was government owned. And again, I wonder why that's there is that 21 million of the 28 million of the private stock could be purchased with government debt. Okay, I wonder who did that. That was again, Gerard and Aster. This time they were secretly working behind the scenes because last time they stirred up too much controversy. So in this case is that if you're too blatant well the next time you just be much more subtle about this. And the federal government basically kept all of its money kept its deposits at the bank which was a massive subsidy. This is no different than if Congress has a special deal with a restaurant right outside Capitol Hill saying, all right, every Thursday everyone's gonna go there. You're basically using taxpayer dollars and you're funneling it into this enterprise. This bank kept all the deposits there. It was a huge subsidy and obviously this allowed it to make many more loans and have much bigger market share than it otherwise would have. Okay, Congress passed this bill in April 1816 and Gerard estimates that the profits quote will be immense. All right, Gerard is the guy on the left. Aster's the guy on the right. I didn't really have anything else to add to this slide so you have some pictures fits well. And again, so just to sort of analyze kind of the connection at this, Gerard becomes the largest shareholder. Gerard and Aster become two of the five governor appointed directors at the main office and Aster became the president of the New York branch. Well, isn't that convenient, right? You know, you lobby for a bank and then you establish all of the, you know, you get a sconst in all of these comfortable positions at the bank. You're basically on the main board of directors or one of the presidents of the main institution. You're one of the largest shareholders. You know, this is gonna be great. Finally, they'll be able to control this bank, right? Unfortunately, there are other crony businessmen who were smarter than Gerard and Aster and they basically seized control of the institution during the election of the main office's president in Philadelphia. The bank charter, and this is what a lot of, you know, back then they say, well, the public interest, we're not gonna allow any large shareholder to exercise undue influence. So one shareholder, excuse me, shareholder, no matter the size, can only exercise a maximum of 30 votes, okay? Of course, there are ways around this, particularly proxies. And this is in particular what the capitalists in Baltimore exploited ruthlessly. So Baltimore back then was sort of an up and coming mercantile city. It did a lot of trade on the ocean, obviously. It wasn't as big as Philadelphia in terms of finance, but it was still, you know, it was up and coming. So quite notoriously, there are many examples of this. Lawyer George Williams, he controlled 1172 shares legally owned by his clients. So what he would do is he would basically just register shares under different names. All right, and he would basically control them as a voting block, okay? This is actually what people did a lot of the times back then to get around these regulations. Sometimes you'd even just go to a homeless person, you know, all right, you sign them up and then like, there you go. And it's like legally under their name, but it's not really under their name. And out of the 16,000 shares held in the city, 15 men in Baltimore basically controlled 75% of that through this method. Okay, this is sort of a ruthless, you know, just disregard for the rules, shows how much sort of these highly-vaunted public regulation, you know, things actually matter. You can just use proxies. So Baltimore secures the election of former secretary of the Navy, William Jones, who was partially secretary of the Navy during the War of 1812. The only thing you really need to know about him, he's a complete political stooge. He doesn't know how to operate a financial institution. He used to be a merchant, but his company went bankrupt and all that stuff and Gerard and Astor are very upset because they try very hard. And then all of a sudden basically, Baltimore just comes, you know, comes from behind and sort of takes control of this institution. And then they proceed to run it straight into the ground. So what they first do is basically the bank opens up in early 1817 and it starts inflating. So just to recall, you know, the Austrians describe inflation as an increase in the money supply. All right, the rise in prices is only an effect of the increase in the money supply. Okay, so the second bank of the United States, it starts off by lending six million to New York City, Philadelphia, Baltimore, Richmond banks to resume species payments. So these banks still had not resumed species payments. They still were not honoring redemption of their notes and deposits for gold and silver. So our country wanted to go back to the gold standard after the war. So you can do this by engaging in the deflation. So trying to contract the money supply, waiting until the increased supply of goods lowers prices so we can return to the old parity or you can just kind of pretend and you can return to the gold standard and you could continue inflating. That's the easiest solution and that's what the Republicans did back then. So they were really trying to have their cake and eat it too. They were trying to resume gold convertibility but at the same time just pretend like they don't actually have to engage in a deflation. So what this bank does by lending to these institutions is since they're not resuming species convertibility it's really just pumping reserves into the system. It's like the discount window, right? They're lending to these banks and they're not using them to call upon the second bank of the United States for species but instead to just basically make more loans themselves. And the second bank of the United States engages in an enormous credit expansion during this time period. So from 1817 to about mid-1818 the second bank of the United States increases credit expansion by about 57%. And you can't really see it too well in the money supply statistics in 1818 for a variety of reasons we'll talk about later but overall from 1815 to 1817 the money supply increases by 25%. So a very large increase it's roughly about 12% per year during this time period and the second bank of the United States is really leading the pack, okay? And it's not just in Philadelphia but particularly in all of its branches scattered across the land so to speak particularly in the south and the west. So the second bank of the United States branches and as well as the other state banks they lend during this time for building construction long-term agricultural improvements purchasing slaves, turnpikes, ship building, steam boats, et cetera. These are all of the higher order goods of the day those long-term production processes that produce for future consumption, right? That a credit expansion would affect the most of. So businesses, farmers, et cetera they were liberally borrowing from the banks to engage in these types of basically production processes. Now overall, and this is what continually has misled critics of the Austrian business cycle theory it's that they say, all right, wait a second. Well from 1816 to 1818 prices fell and that is true, wholesale prices fell 17%. The main reason for that was actually just the resumption of trade with Great Britain our major trading partner. And this is there, they're producing they produce manufacturing goods manufactured goods, excuse me much more efficiently than us and so they're able to sell at lower prices. So during the war you had basically virtual economic autarky, right? And that was one of the reasons leading to higher prices then afterwards you have all these cheap foreign imports coming in and they're lowering prices. Prices of domestically produced goods did not decrease, but in particular prices in these sectors rose, okay? So something very similar to this happened in many other business cycles in the 1800s as well as the 1920s, okay? People say, oh the Federal Reserve isn't inflating during this time period this is because the price level's falling this was something Milton Friedman, his argument, okay? Anyway, so Baltimore leads the pack in the credit expansion in sort of there's so much swashbucklers for blatantly flouting the rules and just illegally sort of electing William Jones and really their business practices show this. So James Buchanan and not the famous economist not the president, but that's just this random guy named James Buchanan. He was a partner in Smith and Buchanan Mercantile House very famous Baltimore Mercantile House back the day and who was the other partner? Well, it just so happened to be a famous politician the congressman also Senator Samuel Smith, all right? Who was very connected with the merchant interests and one of the things he would always try and do is lobby for an increased Navy, all right? To sort of subsidize merchants, you know, exploits and all that stuff across the world. James Buchanan was also another government appointed director at the main branch and he also happened to be the president at the Baltimore branch, okay? So he's clearly got a lot of authority in Buchanan, James McCulloch, the bank cashier and George Williams, remember him? He's the lawyer with, you know, sort of finagling with the proxies. They loaned themselves one million dollars total back then, in total back then there was actually quite a lot of money and this was basically fraud because they claim they secured the loans with collateral and they didn't so they were sort of deliberately basically misleading people. James McCulloch, he took out a loan for let's say $300,000 and just to put things in perspective, I'm reading this in a book, the, his annual salary was about like $3,000 so he's borrowing slightly beyond his means basically. His future income stream will make paying that off difficult and they bribe the second bank of the United States president, William Jones, to sort of look the other way. They also bribe some other people, et cetera and so on. So Baltimore is just really kind of engaging in pretty much malfeasience, you know, just basically illicit behavior, okay? The good times, however, cannot last forever. Excuse me, the good times can't last forever and they also, the way I put it was fine too. During this time, Secretary of the Treasury, William Crawford, sort of a quasi-old Republican, he pushes for a species redemption to return to the gold standard. So being an old Republican, he was sort of a descendant of the anti-Federalists. When Jefferson came into power, these old Republicans along with guys like John Randolph of Roanoke or John Taylor of Caroline, you might have heard of them, they were really pushing for a limited government. William Crawford was kind of like in their camp. He was sort of like the William Harding of the day. He was sort of like low government spending, wasn't too great on that much other stuff. Anyway, sort of like a lovable guy. One of the things I find fascinating, again, we're trying to show the relevance of the panning of 1819 for today is that William Crawford, no one's really heard of him here probably, he was the front-runner in the election of 1824. The famous election where John Quincy Adams basically stole it from Andrew Jackson and what happened though, was about a year before he was running for office, he had a debilitating stroke and he was sort of partially blind, partially deaf. He had trouble speaking, he had trouble moving, et cetera. And you would think this would sort of push you out of the race, but that didn't stop basically his backers who are saying, no, he'll be fine. We can keep him on, have him running, he'll be okay. He'll be good and I'm just thinking, I'm like, wow, that reminds me of something. But, you know, so history does repeat itself, in other words, is so anyway, back I guess to the monetary scene, the state banks refused to convert during this time period. So they're all engaging in credit expansion in this credit expansion would normally be unsustainable aside from the Austrian business cycle theory, but just to the price-species flow mechanism, but not the second bank of the United States. It was converting. So as it was expanding its notes and deposits, which was winding up in the hands of the public and other banks, they were then taking these notes and deposits and they were then presenting them for redemption in gold and silver. And obviously the bank would oblige them and it would start to pay out, it's gold and silver. So in the first half of 1818, species reserves start to decline. It's actually a fairly relatively quick process during this time period, because you had guys like money brokers, et cetera, and so on. So it was expanding, but it couldn't last forever because it was unsustainable. They would run out of gold. And in the second half of the year, the second bank of the United States starts to engage in a massive credit contraction. I mean, truly massive, because from about July of 1818 to January 1819, the bank's liabilities basically contract by a whopping 41%. So huge contraction, they failed, they're not called, excuse me, they're not renewing loans. They're calling in their loans. They're basically just trying to beef up their reserve ratio to make matters worse. In the fall of 1818, Congress investigates the bank, particularly the Baltimore branch. There's sort of accusations of sort of some odd behavior going on, et cetera. And this contraction of the bank was actually so large that from 1817 to 1818, the money supply falls 10%. So you're starting to see the bubble pop basically. You've got sort of this illicit scandal sort of emerging. The bank is seemingly trying to cover up its behavior by literally engaging in a punitive deflation, et cetera. So then this leads us to the panic of 1819. The panic of 1819, it actually wasn't called the panic of 1819 during the crisis. It sort of got this name later because when you think of a bank panic, it's really just a bunch of runs on the banking system. So it's when a lot of people are presenting notes and deposits for convertibility or just trying to take their money out of banks. There's usually like this dramatic stock market crash, et cetera. This actually didn't happen. It was sort of like a gradual but sharp decline throughout the year. And, but it was still later called the panic of 1819. In the middle of 1819, Thomas Jefferson wrote to John Adams. They were still very close, even though some of their earlier disagreements. They were both also very hard money, especially Jefferson. He said the paper bubble is then burst. So basically everything blew up. Now all the projects that seemingly look profitable, those long-term farming projects, those steam ships, those turnpikes, et cetera. Well, now they're no longer profitable. The loans to finance those projects have dried up. From 1818 to 1820, wholesale prices fell by about 30%, almost one-third, so very sharp decline. And this was also shown in the wages. So in least the available statistics for wages, you can really only look at the daily wages for agricultural workers in for unskilled turnpike workers, at least during the first year. They plummeted about 60 to 80%. So huge decline in nominal wages during this time period. So again, very, very sharp decline, right? You have the panic of 1819. It's sort of this very prominent event. This is what most of the country was focused on in 1819, as well as the years after. However, was it so bad? Contemporaries sort of actually thought it was very bad, and as well as some modern historians. But actually when you look at the data, it didn't really, it wasn't actually that bad. The first thing to note is that in terms of counter-signal policy, that the government basically did what they were not supposed to do, right? Normally you're supposed to turn on the monetary jets, and you're also supposed to engage in deficit spending. The money supply remained flat after declining about 10% in that first year. Sort of flat-lined at the early 1820s. And in 1819 to 1821, the federal government spending declined by about 26%. This is largely at the initiative of the Crawfordites. They were called the radicals, the capital R. They were led by Martin Van Buren later on. And they pushed to cut government spending, particularly the military spending harshly during this time period, okay? However, there's no real effect on economic activity, okay? You can look at nominal GDP in those show very serious declines, but at least the available data suggests that it wasn't that serious. 1816 to 1818 real GDP per capita remained constant. In 1819 real GDP per capita, so real GDP per person fell by about 1%. And then in 1819 to 1824 real GDP per capita actually increased by about 1.5% per annum. So if anything, output increased after the panic than before, okay? Now why was it so serious? Well, or why do people think it was so serious? Well, one, they concentrated on the cities where economic activity could look really bad. There could be high employment there, et cetera. But that was actually very small relative to the overall size of the country. Most people worked on farms. They weren't artisans or craftsmen or merchants, et cetera, in the large cities. And in particular sort of related to this is they concentrated primarily on nominal data. So they saw wages going down or stock prices going down or just prices in general going down and they thought that this was a decline in real values. But this is just the nominal illusion, right? It's not actually a decline in real output. This is basically said by Joseph Davis. He wrote relatively recently in the Journal of Economic History an improved annual chronology of U.S. business cycle since the 1790s. And he showed that actually using a revised industrial production estimate that real business cycles, the actual real output during business cycles declined by much less than what was commonly assumed. So you look at the severity of these crises, they didn't last as long nor they as deep. So he says, okay, if this is what the output shows us then why do people say they were really terrible? Well, and I happen to think he's correct here. He says, quote, one plausible explanation for the disparity in 19th century depressions may be that the media confused commercial crises with financial ones because the latter were better characterized by falling commodity insecurity prices rather than declines in real industrial activity, okay? This is true. It's that you had people were suffering from the nominal illusion. You didn't have widespread economic data back then. You didn't have widespread statistics of unemployment or of output, et cetera. So you're concentrating on a couple of things and you don't really know what you're talking about. And then you just say it's really serious but it actually isn't so serious. So this is what happened. Also, if you call something the panic of 1890, it just sounds terrible. Everyone's panicking. It's like a huge psychological depression or something. And now if you call the recession, it sounds much better. Much less harmful, okay? However, the people are still upset. So obviously they're hurt somewhat and they attack the second bank of the United States. It's this massive new bank that was created. It was fine. There was a very famous quote by William Gowdge after the fact he said, the bank was saved but the people were ruined. So the bank engaged in this mighty credit contraction to save itself but everyone else was not and they are upset. However, as what happens with most government-sponsored enterprises is that the bank employs friends in very high places. So it first gets the intellectual defense, okay? It has the establishment newspaper, the National Intelligencer. It receives loans from the bank. So naturally it's very favorable to the bank. Now these newspapers back then or this newspaper as well as other institutions, this is something that isn't so well known but they were basically subsidized by the government or at least certain ones were. And they would get subsidized through lucrative printing contracts. So back then, we obviously didn't have the internet and the government wanted to print various congressional documents, things for the Senate, the House of Representatives, various bureaucratic documents, et cetera. So you would give the contract to a, the companies that actually had the machinery and the printing contracts were quite lucrative. You'd get like a 50% rate of return for this contract. So it was massive. Now, you get this massive, very lucrative contract from the government and you're gonna support the government's policies, right? So this is what the National Intelligencer did. It was sort of a very cozy relationship between the media and the government. No surprise then that this era was called the era of corruption, okay? It also has the political defense. So Congressman Henry Clay of Kentucky and Daniel Webster of Massachusetts, very prominent politicians during this time, they receive loans from the bank and they also receive a retainer for providing legal services. So Clay's retainer was about $6,000. That's more than the secretary of state salary back then. So it was clearly a lot of money and his job that he did for the bank was he helped sort of foreclose on property. So they didn't really exactly make him like the most likeable person and he could be very selective with this so he could, if his friends owed money to the bank, he wouldn't call on their loans or et cetera, sort of press them to pay and so on. Daniel Webster also received, as I mentioned here, received a lot of money from the bank. He was close with many of the bank's officials and there's a very famous letter of him sort of later on. He says he's writing to the bank's president. He says, my retainer has not been renewed or refreshed as usual. If you'd like me to continue providing my services to the bank, I would like it refreshed and you're like, oh, wow, it's very venal. It also has the central banking defense. Nicholas Biddle, sort of a young Alexander Hamilton type of figure, if you know about him, he was appointed director in January, 1819. He was good friends with President James Monroe, the United States and in early 1823 became the bank's president and he was sort of known as really like the first central banker but he was a very prominent, powerful figure. He was the one who went toe to toe against Andrew Jackson in the early 1830s and he lost. However, so you've got the intellectual defense. You've got the political defense. You've got the central banking defense. What's the most important defense though? It's the legal defense, okay. Chief Justice John Marshall, very prominent land speculator. He also just happened to own stock in the bank. Okay, so, all right, maybe a little conflict of interest there. In this very famous court case, McCulloch versus Maryland, Maryland, the state of Maryland tried to tax the Baltimore branch just like it taxed its other banks, the other state banks. They said, hey, this is unfair if they're not being taxed, but the other banks are. In this case, wound up. So that McCulloch was the same McCulloch of before who was caught embezzling. And the basic court case said, can states tax the second bank of the United States branches just like they tax their own banks? Important, Daniel Webster served on the bank's legal team, right, the one getting money. Marshall did sell his shares right before the case in early 1819, but this is sort of like indicative, like he almost knew it was a conflict of interest. Marshall actually couldn't be in many prominent Supreme Court cases during this time period because he was tied up in land speculation that was sort of involved in there. So he had to excuse himself, but anyway, he was here for this. And the Marshall ruling in March, 1819 said, states cannot tax the second bank of the United States branches. And really for that matter, the federal government can do whatever it wants, which is more or less his argument. It says, we're not a confederation, we're a consolidated government. The government can do what it wants. The 10th Amendment doesn't mean anything because it does not have the word expressly in it and so on and so forth, et cetera. And to make it worse, like for the people, right? So a week after the decisions, investigations reveal bank cashier James McCulloch as a massive embezzler. And then the three guys basically get off scot-free, right? So it looks really bad, right? You have this court case that defends the bank, right? And then you have this later on, oh yeah, these people who, yeah, we found out they did a bunch of bad stuff. Wow, you know, they're gonna walk away, okay? So that really got the public riled up. You had this bank that was sort of engaged in all sorts of crony behavior, the motivations behind it were crony. It was all sort of special interests they're benefiting from at the expense of the public. They caused this big business cycle and then the bank sort of gets off scot-free. It doesn't suffer any real penalties, et cetera. Is that like, what does this lead to? Is there any hope? Okay. So well, first of all, one of the things it leads to, it helps contribute to, is the growth in free market economic thought after the War of 1812. So after the War of 1812, and increasingly after the panic, hard money economic theories flourish. So you've got guys like David Ricardo, John Peptice, DeSut de Tracy, and so on. They're very anti-bank. They are pro hard money, pro gold standard. They're saying banks are all these charters. They're getting all these special privileges from the government. They're engaging in this credit expansion. It leads to all these problems later on. They sort of support various 100% reserve requirements or various sort of free banking proposals, these free market solutions, and so on. And very important is that Jefferson and others, they promote these writings in colleges and public forums. Jefferson even writes some forwards to books. He's saying, well, this is sort of explaining the free market theories of the Enlightenment, Adam Smith, and so on. I hope the public will read this, et cetera. They're publishing these books. This is what colleges would read. One of the stable college textbooks or the authors was John Peptice say, colleges back in the day were, we say they're liberal back then. We were saying like they're the good liberal. They're basically classical liberal. They're very free market limited government, and so on. They're not big government because they were all small private liberal arts colleges. They weren't linked in with the state as they are now. As a great quote, as an important quote, in April, 1821, Condi Rigo, a very famous free trader, as well as a hard money economic theorist later on, he wrote to David Ricardo because the banks were still sort of stubbornly refusing species payments, and they had sort of state government backing. He said, the whole of our population are either stockholders of banks or in debt to them. This is not the interest of the first to press the banks and the rest are afraid. So he's just sort of showing the entrenched power of the banking, sort of as they were called, parasites in the country. He's writing to David Ricardo. He's not like Joe Blow. I mean, he's like a big guy in Britain, very famous economist, et cetera. So sort of showing him the problems in America. Okay, what does all of this cronyism cause? Well, it also causes a rebirth in anti-Federalist thought, sort of this limited government states' rights thought. Martin, excuse me, McCulloch versus Maryland continued the consolidating trend of the Supreme Court. In 1816, there was this very famous Supreme Court, Martin versus Hunterlessy, basically saying the federal government can overrule state laws and so on. It's also dealt with land speculation and I might have some time to talk about this, my next talk, et cetera. So this was really, it was just continuing the trend. The, it was really the most prominent event during this time period. This McCulloch versus Maryland sort of shocked the public and it shocked a lot of prominent politicians, et cetera. Old Republican John Randolph described, he described the decision as quote, wrong, wrong, all wrong. It's a good way to put it, John. Old Republican John Taylor wrote these two new works, Construction Construed and Constitutions Vindicated in new views of the Constitution, sort of talking about this, sort of saying how well the Constitution's causing a lot of problems, this consolidation, it's something we have to be worried about and so on. Very notably, Ohio dismissed the ruling. The state legislature went so far as to quote, recognize and approve the Kentucky and Virginia resolutions written by Jefferson and Madison in 1798, for showing states have an equal right to interpret the Constitution themselves. So in these documents, it's really Jefferson's Kentucky resolution, that was the good one, sort of that goes so far as to almost support nullification and secession, these radical theories of the compact theory of the government and so on. So they're saying, well, we don't have to pay, you know, the states have a right, the Supreme Court, you know, they're not the boss. Second Bank of the United States refused to pay Ohio's tax. Well, then you had the court case Osborn versus the Bank of the United States in 1824. Clay and Webster were the bank's legal counsel. Unsurprisingly, the second, the Supreme Court protects the second bank of the United States. Again, okay, so just sort of showing the entrenched relationship of all this stuff. So it seemingly looks like the bank can't be killed. All right. Well, it also causes, it leads to the Jacksonian coalition, the Panic of 1819. In 1820, the Tennessee state legislature contemplates passing a paper money government loan office. These was really the Tennessee state government was saying that, well, we're just gonna print our own money. In the states where this actually was instituted, it got shot down because the Constitution explicitly forbids state governments from printing their own money. But anyway, we'll talk about that a little bit later. General Andrew Jackson, he sends a petition to the legislature. This petition cites, quote, judicious political economists, okay? Maybe like these guys, right? Who demonstrated that the, quote, large emissions of paper from the banks by which the country was inundated have been the most prominent causes of the stresses at which we at present complain, okay? So he's recognizing that these banks, when they engage in a great deal of inflation, they will lead to these periods of boom and bust. So he's saying we shouldn't be inflating anymore, right? It's just going to cause further problems down the road. In Jackson, very famously vetoed the second bank recharter in 1832. So he was the one who killed the bank. A lot of people say that Jackson is sort of unprincipled in this regard. I think they're being a little too harsh with him. He was clearly sort of, you know, he knew about this literature as well as, more importantly, many of his advisors who were writing a lot of his documents, et cetera. So this is sort of part of that free market economic thought that was resurging during this time period, okay? So you have these, the panic of 1819, it leads to growth in free market economic thought, right? This is very influential in the 1830s and 1840s when we particularly got rid of bank charters as well as charters from any other corporations using free market economic theory. It led to the rebirth and sort of this anti-federalist thought of a decentralized government, a confederation. This is very prominent especially later on in the 1830s. And then it also led to the Jacksonian coalition that really sort of combined all of this stuff together and Andrew Jackson became president in 1829, okay? So in conclusion, the panic of 1819 was a defining moment in American history. It demonstrated the immense corruption after the War of 1812. It just sort of showed that there's a pervasive cronyism, special interest politics and so on. It led to the growth in free market thought and future reform efforts and you should read my book when it comes out. So I think with that, I will end here. So thank you so much.