 The policies Republicans pursued during the War of 1812 impacted the nation's history more than the war itself. The corrupted Republican Party totally embraced statism to expand their empire. Those are the words of Dr. Patrick Newman, who has joined me once again for this episode of Liberty vs. Power. Today's episode dives into the presidency of James Madison, and as we will learn, a lot of that is shaped by the War of 1812. So before we begin, Patrick, how are you doing today? How should we think about this period of history that we're entering in after the Jeffersonian administration? We have these war drums that are coming in with some expansionist ideas. Where should we be thinking about when we're looking at this particular period? Also when we're analyzing this period, it's important to remember that the Jeffersonian plan to sort of repeal the Federalist cronyism, try and go back to some sort of system akin to the Articles of Confederation, etc. That plan has been totally dismissed by now. The Jeffersonian Republicans are very similar to the Federalists in various ways. And now that we're entering in the era of the Madisonian administrations is kind of this broad sort of moderation. Yeah, the Federalist Party is really just located in New England. It's all but dead. The moderate Republicans, as well as the war hawks and the invisibles, they're all in favor of aggressive wars of various kinds. So the cronyism now at least initially switches to or focuses continuing to focus on land expansion in that this war of land expansion for conquest then leads to pretty much a re-adoption of the whole Federalist program, central banking, protective tariffs, internal improvements during the war, as well as after the tail end of the Madison administration. So Madison started off as a nationalist. He kind of opportunistically switched closer to Jefferson during the 1790s. And then he returns full circle to his old nationalist roots. And there really is just this lust for conquest that really plays out, I think, well, in your narrative within cronyism, liberty versus power in early America. You can get a discount in the Mises store by using the promo code LVP. If you do not have yours yet, what are you waiting for? But one of the things I love is that, again, this is great revisionist narrative, really highlighting that, you know, just how central that that lust for taking over Canada really was to the drumbeats of the war of 1812. I know my history textbook, I think most narrators out there try to, you know, they focus on issues going on with, you know, making sure that the British weren't taking captive of our soldiers and things like that, you know, sailors out there in the ocean, you know, all of the consequences of their hostilities with France and whatnot. But really, though, it is this aspiration to expand the American Empire and, you know, you do a great job of highlighting quotes from individuals like, you know, Chief Warhawk Henry Clay, even Mattis himself that makes it very clear that if they take over Canada, the goal is not to use this as some sort of bargaining ship to get what we really want, which is just to make sure that that we're not going to be molested by the British Militant Navy, that the really goal here really is, again, to expand the American presence throughout North America and Florida and beyond. Yeah, absolutely. So this is the problem of the Louisiana Purchase. So the Louisiana Purchase increased the size of the country by about 500, some odd million acres, this enormous acquisition. So the boundaries of the country have been pushed in that now you have new boundaries. There's sort of this pressure to acquire more territory to strengthen those boundaries. So now that you have a greater presence in the Caribbean, you want to get Florida. Okay. Now that you have a greater presence in the West, you want to also acquire Canada in the North and strengthen your control of the Great Lakes region and so on. And this is really the ultimate goal of Jefferson in his second administration. He comes very close to actually declaring war on Canada and having like a full-scale invasion. And then this is sort of continued on in the Madison administration. We, of course, do not conquer Canada, nor do we get all of Florida during that time. Instead, we just get a small amount of Florida. But it's still important to recognize what the War of 1812 really was. It was a war of attempted conquest. It was not sort of a war where we're once again standing up to the British as we were in the American Revolutionary War. We were the aggressors. The British weren't perfect before this time period, but they didn't want war. We were the aggressors. And we deserve the blame for embarking upon this war that really just led to a tremendous amount of cronyism. And since we're looking at that crony aspect, that economic aspect, can you set up just a little bit? Why was Canada so important? It's not just land for the second land, but obviously the role of rivers and things like that. Why was Canada such a fixation for these war interests? Yeah, sure. So at this time period when we're talking about Canada, there's upper and lower Canada, really we're just referring to the area around the Great Lakes, sort of above New York, etc. Canada wasn't at the time the massive country extending from coast to coast that it is now. So Americans wanted Canada for several reasons. One, they wanted controlling upper and lower Canada because that would monopolize trade in the Great Lakes region. This is a point of contention throughout our relations with Canada, throughout our whole history, but really you got to have control of the Great Lakes region. That's very important, particularly Lake Erie and Lake Ontario are very important because they connect to the St. Lawrence River. And there's a lot of trade that could be going on through there. Canada has a lot of grain around this area, so a lot of lucrative farmland. It's got a lot of fishing and there's various fur trading in the region around this area. So there are various mercantile and commercial interests that want Canada brought into the United States, which is why it's such an important target for Jefferson previously, as well as now Madison and the Warhawks to acquire Canada. So let's now look at the inner politics of this dynamic that's brewing. You mentioned the Warhawks earlier, again led by Henry Clay, who is an actor who will not be going away anytime soon. Along with individuals like Felix Brundy, Peter Border, John C. Calhoun, another one of those guys is going to come up a lot in future episodes. You have the invisibles who have a similar sort of interest in terms of an aspiration for war with Canada, but they want to go about it a different way. Can you explain a little bit of the differences between these two pro-war factions and some of the main characters in both? Yeah, sure. So the Warhawks were the larger group in Congress around this time period. So you mentioned some figures that would become very prominent later on. So a lot of the famous Americans of the, let's just say, Jacksonian era, many of them sort of started their career in the War of 1812. Andrew Jackson, though he was a senator in the late 1790s, he was a general in the War of 1812. You've got Henry Clay, sort of a young speaker of the house. You subsequently will get Daniel Webster, then you'll get John C. Calhoun, Felix Brundy, all these people who would be important in later era. So the Warhawks were mainly, though, they were located in the South and the West, as well as a little bit in the interior of the mid-Atlantic Peter B. Porter of New York, who I find a fascinating character. He's an example of this. They wanted a war against Canada. They thought they'd get like a quick sort of lightning strike victory against Canada, just sort of snatched the land. They were willing to say maritime grievances were always the main excuse, but that was just what exactly it was. It was just an excuse. It was sort of covering up the fact that they really wanted the land in Canada. The invisibles were those congressmen who wanted a war, but they primarily wanted a naval war. So individuals such as Samuel Smith, he was the senator, the older brother of Secretary of State now, Robert Smith, as well as previous Secretary of War, who spoke about them regarding some naval cronyism during Jefferson's early years. And then you've also got William Branch Giles. I believe he's a senator of Virginia. So they're interested in having a naval war because that's what they think the main battle is at. They want greater protection, U.S. protection for U.S. production of merchant ships and then so on to protect and to help the commerce of the country expand. So they both wanted an aggressive war, but they both kind of differed over how the war would be fought. And that sort of ended up proving to be a source of friction. But the most important thing is that they knew that they wanted an aggressive war against Great Britain. Was there a bit of like a generational sort of aspect going on there? Because it seems like Calhoun, it seems like some younger blood on the part of the Warhawks that might be more energized by the ideas of like great land conquests, whether you might have a more of a mercantilist sort of aspect, the naval stuff. Is that just coincidental with some of the names involved? Or was that sort of a dynamic in all, do you know? Well, I think the younger age definitely matters because they weren't really around in the 1790s and even in the early part of the Jeffersonian era, so they couldn't really see exactly how the Republican Party had changed. For them, the Revolutionary War was a long time ago. If they were, they would have been very young at the time, so they would have just thought of it in terms of just a patriotic battle and they wanted their own sort of war against Great Britain, etc. The age does play a role because this just happened to be a time when you started to see a shift in the composition of the various politicians in Congress, etc. So it sets the stage for the later battles and it just, you know, pun intended, but it just, it is important. They were younger, they were hungrier, they wanted to make a name for themselves, so that's why they supported cronyism. That's one of the things I think is interesting. It's can be overlooked at times when we make this transition. So this really is a kind of a different generation of politicians that's rising up. You go particularly from a very written words or a dominated building of the foundation there to a lot more of the oratory, a lot more of the kind of the charisma in person, the Daniel Webster's and Henry Clay's and the sort of energy. That dynamic between these sort of generations overlapping here, I do think is interesting. So if we look at, that's the pro-war faction that we also have that the pushback to this war buildup, which includes not only the old Republicans, including our good friend, John Randolph, who we'll be talking about later, but also the Federalists who are, I think, just probably what, reflexively anti anything the Virginians want to do. And also the Clintonians in the Republican faction that are more skeptical. Is there anything else that needs to be kind of understood and kind of what is motivating that the pushback to this buildup towards war? Those are really the three main anti-war groups. You have sort of a smattering of old Republicans that are left. You've got John Randolph, you've got Nathaniel Macon, Albert Gallatin, still Secretary of the Treasury right now. He was sort of always kind of a mix between the old Republicans and the moderates, but he's anti-war at this time period, which I'm glad my boy Gallatin is redeeming himself after last year's episode, so this is good. Exactly, exactly. So he's good on the war question. You have the Clintonians, so this is, of course, George Clinton, who was Madison's Vice President until he died and then Elbridge Jerry became Vice President. Elbridge Jerry, one of the anti-Federalists who didn't sign the Constitutional, he didn't sign the U.S. Constitution. He was one of the three members at the Constitutional Convention who did not sign the Constitution. He's also known, of course, for gerrymandering, which is a whole fascinating subject in itself. So the Clintonians were always sort of, they were anti-Federalists. They always kind of went at things their own way. And so now DeWitt Clinton, who's the nephew of George Clinton, he was against a war against Great Britain. And so the election of 1812, which Madison narrowly won, was really almost sort of a quasi-referendum on the war because war was declared in June. And then in November, you have this election in the fall. And then you have the Federalists who are against Republicans, anything the Republicans do, but they themselves also did not want a war against Great Britain. They were very close to Great Britain. They thought this was a mistake. And of course, it's funny because the Federalists being in New England were sort of the most maritime or mercantile-minded people. And yet they didn't want to go to war, which kind of shows you at least, okay, then really is it the maritime grievances that are leading us to war? And narrowly, we declared war. They weren't able to form enough of a sizable opposition. But those are really the main groups, at least the main anti-war groups during this Republican hegemony. Well, let's now go into a little bit of the buildup as well in terms of the framing of the war from a congressional authorization standpoint. One of the things I find really interesting is he highlighted how the language in particular, how a House resolution is pushed that would declare within hostilities in this war that the U.S. federal government would protect Canadians' lives, liberty, property, and religion in the same manner as U.S. citizens. That this has very much kind of a feeling today of the American CIA talking about the importance of defending democracy abroad and just making sure we're interested only because we want to make sure these poor individuals, that their liberty is protected from these these British oligarchs, that there is still this humanitarian sort of cover being used to justify what is a blatant attempt to take over Canadian territory. Yeah, it's really humanitarian hubris because a big thing, a big reason a lot of war hawks wanted to invade Canada was not only economic reasons, but they just massively underestimated the cost. They thought it'd be really quick and they honestly thought they could just waltz in. We would just send American militia and some land troops and we would take it that the Canadians would want to be released from their British oppressors and join the United States. So yeah, it kind of does have this. We're here. We're Americans now. We will protect you. You're safe, right? And of course, you imagine like the whole city is burning and they're like, you're safe now. And yeah, and so we had pushed for that, the war of actual conquest, though is a major reason, ended up basically not succeeding because enough of the invisibles did not side with conquering Canada. And what's fascinating about this is you actually look at the big supporters of this, the South and the West were the war, the war hawks there and really just the relevant senators there were in favor of acquiring Canada at this point. And in fact, there was mainly sort of Northern resistance that didn't want Canada, which is sort of a very fascinating point to bring up. It really shows you how slavery was not a main factor in this, unlike later sort of conquests and dividing up of territory between the North and the South, et cetera. But it's a fascinating push. You got to give the war hawks credit. They certainly tried, but in the end, military inept, you know, just in an inept action with the battles in Canada were disasters and the necessary sort of political legislation just pareded Canada from from from being annexed or being taken into the union. It might be more accurate award. Right. And then that definitely is an important part. Like in spite of all of the failures on the political level on trying to get sort of the big authorization they wanted to for outright conquest, the military practicalities would have restrained it anyway. But it is just interesting that even though there was a majority sentiment in favor of the war, there was still this kind of playing its interest against each other in terms of some of the minor politics framing it. I think it's also interesting, you highlight, again, you know, that this is very much, we see war profiteering play out in a very early American sort of setting here. You know, there's some stuff going on that Robert Morris will be very proud of. Can you touch again, going back to our friend, Chairman Porter, who is now a chairman of the Foreign Relations Committee, again, one of those war hawks. Can you talk a little bit about, you know, his sort of machinations here of, you know, making sure that he can profit from any potential land acquisitions that come about from this matter? Yeah. So Peter Porter is a fascinating figure. He was at least sort of drawing up some initial invasion plans. So he had a business, Porter Barton and company. It was near basically near Buffalo, so near the two great lakes, Erie and Lake Ontario. He was very big in getting New York to build a canal to Lake Ontario. So during the internal improvements drive in the early 1800s, which we spoke about, New York was trying to devise, okay, we want to build a canal that will connect the Hudson River to the western part of the state. So basically he said, okay, are we building a canal to either Lake Erie or Lake Ontario? So if you know your history, you know, there's something known as the Erie Canal, which we will, I'm sure, we'll get into later. That was the route actually chosen. Porter wanted a canal to Lake Ontario. So the Lake Ontario is the Lake above Lake Erie. The issue though is that it was decided it would be unprofitable for the state to embark upon such a project because Lake Ontario also empties out into the St. Lawrence River, which Canada controlled. So a lot of traffic would have been diverted away from the canal through Lake Ontario and instead just through traditional Canadian means. So what he wanted to do is he wanted to basically conquer upper and lower Canada. So in order to basically the United States would then block out any like a traffic or disincentivized traffic on the St. Lawrence River in order to increase the profitability and the viability of a canal to Lake Ontario, right? So he would have profited immensely from this. If this plan sort of bore fruit, I just find it fascinating because it's just a connection of how intricate sort of foreign policy maneuvers in many ways they can be directly related to sort of commercial interests. So in this case, it was Porter who was okay with invading a foreign country just to make it so New York would build a canal to the lake that he wanted it to be built to, which I just find fascinating. I'm like, why don't we learn about this in high school basically? And so he was one of the one of the interests John Randolph in his opposition war speeches was very critical of Porter with his, because of his connection and how his firm would profit from the, you know, the a conquered Canada. But so it's just a fascinating illustration of how personal cronyism dovetails quite nicely with say military cronyism. I wonder if there's something to be said about the nature of some of these, these more western states, particularly Kentucky and Tennessee. I see, but definitely some of the most ambitious men of this era tend to come from Kentucky or Tennessee. That must be a material sort of connection there. Well, so absolutely. Yeah, absolutely. I mean, you would say there's the connection. So one, there was a lot of people from Virginia, you got to imagine Virginia is the biggest state. I mean, it's still like a huge state, right? It's Virginia, and it's also West Virginia, right? So West Virginia at this time period is part of Virginia. So Virginia is an enormous state. Virginia, since really Jefferson's presidency or Jefferson in Madison's really, I guess we think Virginia's influence is sort of declining, but that's the people are moving out West people from Virginia. So during this time period, you had Jefferson, Madison, Monroe as presidents from Virginia, you start to see a lot of Virginians go out in the Midwest. So Ohio, Indiana, Illinois, then you start to see a lot of Virginians go to Kentucky, Tennessee used to be part of North Carolina. So it's sort of part of that. And yeah, it's just the frontier commerce, you know, commerce minded frontier. It's right on along the Mississippi River. So there's there's a lot of interest there. So the country geographically sort of the influence is slowly shifting. And this happens through out American history, it's shifting westward. So the new power structure has become either that what's known as the border states, Kentucky or Tennessee, right? Henry Clay from Kentucky, a lot of Jacksonians from Tennessee, as well as the Midwest, which gets populated. So yeah, it's all it's all part of that. The traditional South along the coast experiences declining influence. Why? Because you're getting the rise of Alabama and Mississippi, Texas, Florida and so on. It's people are people are moving. And yeah, it's related to sort of the political control in, you know, where the influential people are coming from. So sorry for that. That aside, I just, you know, got to go into some old, old American history, regional history, I guess. That's what we're here for. That's the good stuff. Because if you're looking for a battle for battle breakdown of the war of 1812, please find another podcast. Yeah. Because we're going to focus on the important stuff now, such as the financing of the war. We're going to keep diving in the economic issues at play. Because I think there's another thing that's interesting that you highlight is that, you know, there's all this drumbeat for war and all these financial benefits that will come if only we could take over that sweet, sweet Canadian land. But we don't want to pay taxes for it, right? So immediately we get to debt financed military efforts here. And then even Albert Gallatin, who simply talks about the need for tax increases to pay for it. He is accused of chilling the worst spirit by just simply saying, Hey, look, we're going to have to pay for this one way or another. Can you just touch a little bit about this dynamic as well? Like we now see the Republicans kind of going full bore, not only on expansionist dreams, but, you know, we're going to build up war debt in order to do it. Yeah, absolutely. So one of the issues in the buildup to the war was that the war hawks and the invisibles wanted war, but they didn't want to pay it. So of course, no one wanted to raise taxes. Another issue you got to realize here that's important is that 1812 is a presidential election year. So Madison's up for reelection as well as some senators and of course, all of the House of Representatives. So if you're the party in power, you never want to raise taxes before an election, you'd rather just defer. And Gallatin in one way, he's trying to delay the war or discourage. He's just trying to support tax increases because he knows that it'll be so unpopular people won't want the taxes or they won't want the war. So he's trying to actually put the costs up front and make them visible, which I think is a sort of an ingenious plan. But the Republicans are having nothing of it. And it's basically just agreed that, okay, we will raise some tariffs later on. And we're just going to borrow money for this. And so instead, it's just, all right, just push the cost onto later generations, right? And so they borrow a tremendous amount. The federal government borrows a lot. And similar to the war, the Revolutionary War, who actually buys these bonds? It's not always the patriotic American. The real mover and shakers are the wealthy financiers, right? Because they're the ones fronting the capital, they're taking on a tremendous amount of risk, of risk, which they're hoping the government will subsequently get rid of, as we'll talk about. So John Jacob Astor and Stefan Gerard, these two prominent financiers in the Republican Party, they subscribed to about like a $10 million loan. This loan is, they get it, sort of the bonds were risky. They were using depreciated banknotes to pay for it. So they're buying the basically junk bonds because the government, the United States government is having a hard time selling their securities because the war is not doing good. And of course, what they're going to hope for is they're going to push for another central bank, which will increase the price of their debt, right? If those securities are made exchangeable for bank stock. So we'll probably get into that later. But it just shows you, again, once you embark upon this war, that you have to ally yourself with sort of crony interests, right? This happens in the American Revolutionary War, happens in the War of 1812. And as we'll talk about later, it happens in the Mexican War. And this of course leads to various privileges, it's benefiting elites, and so on. And in the debt financing of the War of 1812 is no different. Yeah, Astro I think is a fascinating character. If I recall correctly, he gets big into opium smuggling, right? He's one of the richest men of this era, I think maybe the de-richest. He's extremely wealthy. Yeah, he made most of his money through fur trading. The opium, yeah, I think he was involved in that. I have to see precisely how much or if it was involved in the China trade. I know some New England merchants were involved in that too, as well as still illegally engaging in the slave trade. But Astro makes his money through the fur trade. And he also has his hand in a fair amount of cronyism as well. Of course, I just want to take a small moment to highlight the political consequences that are now arising. If you're looking at all of this and you're seeing, hey look, we now have Republican policies directly financing a financial interest in New York, Philadelphia, and right around D.C. I mean, this is the embodiment of that the Hamiltonian dream, right? And of course you have our good friend, John Randolph, one of the soul voices out there really standing against all of this. You highlight a great quote from John. He laments that the party that had once vaulted of paying off the national debt of retrenching useless establishments has yet now become as infatuated with standing armies, loans, taxes, navies, and war as ever were the Essex Junto, the big wigs of the Federalist Party. What republicanism is this? And as I think that's such a powerful illustration of exactly what this political party had become. And then I love that for his efforts, he gets kicked out of office in 1813. That there really is no mercy here for that old guard within this moment. Oh yeah. And it's sort of the final panel. It shows how much it hurts to be criticizing the establishment or the criticizing the administration. So Randolph had already experienced this when he had to split with Jefferson over some of Jefferson's cronyism. And then he was fighting the war of 18. He's fighting the drive to the war. He was trying to prevent war appropriations from taking place, arming the military. He was fighting against the declaration. He's fighting against the war during the war. And what happens is he loses office. So he gets kicked out. So he does go back to Congress after the war, particularly the important term after the war when they're trying to establish the Republicans in Madison. They're trying to establish all their peacetime cronies and so to speak. But yeah, it just shows you it's like, well, sometimes good ideas only go so far when they're lacking other people supporting them and other sorts of important ingredients. But yeah, it's unfortunate. I always love that quote. And then I think, oh, wow, he lost office after giving that quote. After saying that quote, it shows how much that worked out for him. Another important element going on at this time is something that I know Murray Rothbard touches on a great deal with his book on the history of money and banking in the United States. There's a major issue with the way that increase of banknotes within the country through the state banking apparatuses that have become the standard after the fall of the first bank of the United States. Can you touch on a little bit of this issue, what the traditional spin is of it? Because I know they kind of point to this as an example of, oh, here's why free banking doesn't work, right? They try to use this period as one of those little historical anecdotes against the idea that we can have, you know, laissez-faire in money and banking. Can you touch a little bit about this before we get to the big battle over reviving the central bank? What is it about this system right here that is playing out on the monetary side of things? Yeah. So that's a great question. It's very important to talk about because traditionally when you're taught American history, you're taught that any sort of deregulated banking system that existed in our country's past always led to all sorts of problems. This is the problem of the wildcat bank. So the wildcat bank, where the wildcats roamed supposedly, these fly-by-night operations, they would just set up shop, print a bunch of notes, then they would just sort of skip town. So if you don't have a wise central bank restraining all of this deregulated inflation, so to speak, then you're going to get, you know, skyrocketing money supply, rising prices, blah, blah, blah, blah. So a lot of people, they're going to argue, they say, look, we had the second, we had the first bank of the United States, Hamilton's Bank from 1791 to 1811. We get rid of the bank, and then during the War of 1812, we see this massive inflation, inflation right now just defining as the rise in prices. And then we institute another central bank in 1816. So it's very clear that we got rid of the central bank. The central bank was restraining all of the state banks from increasing credit expansion, and then they all just go willy-nilly and increase credit expansion. This is incorrect on several accounts. One, free banking actually does stabilize and limit credit expansion because of competition. The wildcat banks just did simply not exist at the extent people thought they did or in terms of their negative effects. The other reason, the other flaw in this argument is that the central bank didn't restrain the state banks. The central bank aided their credit expansion and without the central bank during the War of 1812, we still would have had inflation because the real reason for the inflation was because the government privileges to the banking system through cronyism. One, the government issued treasury notes, which could be used by the banks as reserves, which they used to expand the money supply and help the Republicans finance the war effort. And the other issue is that the other privilege is that once the Federalist New England banks started to try and redeem the banks in the rest of the country, their liabilities, you saw the government basically allow them to suspend specie payments, which encouraged further credit expansion. So with the central bank, you would have seen something very similar. The central bank would have monetized a bunch of the government's debt during the War of 1812 and you still would have had a tremendous amount of inflation. So the reason why you have inflation during wars such as the War of 1812 is because the government is increasing the money supply to help finance the war using the hidden tax of inflation. Just print the money and you'll be able to use that new money first before other people are able to. And of course, when they get the money prices will rise. So this is something that I was always very influenced by. I'm glad you brought it up. Rothbard's analysis of this, when he goes in the history of money and banking, explaining this process. And of course, I integrated into my own analysis of cronyism during this time period because it's very clear that these privileges benefited the banking system. And it wed the banking system closer to the government and almost a sort of a preparation for when the new central bank comes out, the state banks will be able to work with that central bank. That breaking of specie payments, that's so huge. That is the injection of bailing out these financial institutions at the federal level. The complete employment of state privilege and rewarding irresponsible financial behavior. And again, the interesting aspects there, particularly in this scenario more than others perhaps, that you even have that regional aspect on display where you have federalist banks not wanting to be a part of this effort. And yet, they're the ones that kind of end up getting screwed over the most because it's their manufacturing goods being used, being bought up with this devalued paper money. And they're not getting in return that that hard money that they're supposed to be getting. This is the start of so many of these episodes that have now led to the financial system we have today. And I think it's such an interesting aspect of all this. Yeah, no, it's a great analysis of yours because once the federal and state governments allow the banks to kind of breach contract and suspend specie payment, they waive their own laws requiring banks to honor note and deposit conversion. This just simply sets up the stage for future panics and other sorts of crises where the governments are going to allow banks to suspend specie payments. It's kind of once you do this, once you spare the rod, you of course spoil the child because now banks are going to say, all right, well, if enough of us get into trouble, we'll be able to suspend specie payments. And there's going to be no sort of legal side effects of that. And yeah, so it's important that this happened because it's set a very bad precedent. Yes, yes, it does. So this is all kind of going on within the aftermath of the theater of war. And the military victories are, this is not a particularly grand moment for the American military. We have the Bernie of Washington, which is perhaps a historical highlight in some other ways, but not on behalf of the American military. What really is it that drives us to peace? What were the factors that really got us out of this disaster that greedy war hawks kind of got us into? So one Napoleon, his war in Europe is stopped. He goes similar to Adolf Hitler. There's the rule never wage a land war against Russia. That's what brought both Hitler and Napoleon down. They wage a land war against Russia. And the issue with Russia is there's just so much land, so you're just not going to win that. So anyway, Napoleon's out. And then this initially looks bad for America because now Britain can basically turn their whole might against us. But Britain starts to be fatigued by war. It's citizens, it's businesses, they've been dealing with high taxes and regulations for the Napoleonic War. They don't want to continue to deal with this during this war. So we have a peace commission that goes over the Europe. I believe it's the treaty, they signed the treaty of Ghent between the United States and between Britain. And this is really, I think that we just sent like our a squad when it comes to diplomats and Britain kind of sent like their B squad because everyone else was dealing with like the Napoleonic War. So we basically get a treaty that says like, all right, we're going to return to the status quo. It's like, all right, we got that. There's no real discussion of the Impressman issue or anything that dies down because of the Napoleonic War, but it just sort of shows you somewhat how irrelevant it was to the major forces at work. And this is, okay, we get this treaty that basically we go back to the status quo, which was really a victory for us considering how much of a disaster this war was. And then you have this great battle of Andrew Jackson. He defends New Orleans. And this is seen as a smashing victory. We defend against the British invaders who wanted to try and capture New Orleans and maybe split the country up or just do something. And this really, this of course happens after the treaty was signed, but just due to communication delays from the technology at the time, we don't know this. So we get this treaty and then around the same time we hear that Andrew Jackson victoriously defended New Orleans. So this just seems like, oh, obviously this was a great victory. Like, you know, we won the war. And not really, we didn't win the war. We didn't get what we wanted. We didn't get Canada. We barely got anything in Florida. There was no real change in the impressment issue. That just died down simply because Napoleon wasn't a threat. This was just a massive government boondoggle that did nothing except increase our debt and lead to a whole bunch of government interventions in the future. Well, it did do one other thing. It created a new American hero, thanks to that battle of New Orleans. I think it's very interesting that it's just a cultural moment within sort of early America. Like, I think there's multiple songs that are still, I mean, not that they're popular, but I mean, you can still find them on YouTube, right? The Hunters of Kentucky, you know, there's, you have, you know, within that moment of the battle of New Orleans, the creation of a new great man of America. But I've got, got right here, a bronze, a medal struck at the past of Congress, recognizing the great victory of General Andrew Jackson. You know, obviously the significance of this and what it has done for the popularity of him will pay off in future episodes. But, you know, this was a very interesting, you know, that just creating a national figure. I think it's interesting. But that's it, right? We're now out of this war. You would think that this entire period would perhaps sow some humility with some of these figures. The guys like Clay and Calhoun and some of these folks are not going to go anywhere anytime soon. Since he has come up already, can you touch on just a little bit, Calhoun, because he is a very interesting figure here. Obviously, during this episode, he is very much aligned. You know, he's making arguments right alongside the national Republicans, right? And yet he has then kind of remakes himself as a confederate in a, you know, making legal defenses of secession and kind of plays himself off in a different way. Can you just talk a little bit about where someone like a John C. Calhoun is at this period in time, since he, again, is one of those figures of this era that really stands out in some interesting different narratives out there with him? Yeah. So John C. Calhoun, I guess I would say the politician I find him the closest to is James Madison, right? Which means I don't really like him. My book, it's sort of negative on Calhoun. For a lot of reasons, people don't necessarily know. I think most people who are in favor of like they like Calhoun from a state's rights perspective or something like that, they don't really know the whole story. They also don't really know his whole kind of his positions around things. And even when he was doing a lot of those state's rights arguments, you know, and particularly in South Carolina with the South Carolina, the exposition and protests during the nullification crisis, he's actually trying to prevent the state from seceding. He's not the most, there are more radical people in South Carolina. Calhoun's number one goal throughout his entire career was he wanted to be president. He and Clay, they both really wanted to be president. So Calhoun obviously doesn't want South Carolina to secede because then he can't be president, right? So Calhoun, at this time, he is a big nationalist. South Carolina up until the 1820s was a vocal nationalist state. South Carolina was a strongly federalist state during the Hamiltonian era. Okay. A lot of people don't know this. They had it still an enormous amount of debt. So they benefited from Hamilton's assumption of state debts and they wanted to use government money to embark upon internal improvements on all sorts of stuff. So Calhoun, he was a very big nationalist. You look at his speeches during this time period. He wanted internal improvements, a federal system of internal improvements to bind the country together and to explicitly stop secession. And he also was a broad constructionist. So he's giving arguments. He's saying the Constitution is not like this logical document that we're all supposed to overanalyze. Just read it with plain common sense, which I just find hilarious because it's like, he does the complete opposite later and you get various other people trying to make all these hoops, jumping through everything. And he's just a big time nationalist. He wants a central bank. He's okay with protective tariffs. Okay. And he's in favor of a system of federal internal improvements. So he's pretty much on board with Henry Clay on a lot of issues. Okay. So we'll talk about Henry Clay, the American system in the 1820s. But it's similar to Madison in many regards. He starts off as a big nationalist. Then he switches. He takes some opportunistic shifts. And then at the tail end of his career, he kind of goes back to the nationalist fold, though much less than Madison just given where he was in the 1840s and 1850s. Well, this does lead us to one of the next great battles, which is over that central bank. Calhoun is one of the great champions of putting in place a new central bank. This is after, again, after the war of 1812. But this all goes back to our good friend, John Jacob Astor, and some of his people that have been able to manage to get into as the position of Treasury Secretary replacing Mr. Gallatin, an individual named Alexander Dallas, who becomes a very important ally in their desire to make sure that all of these loans that they have financed on behalf of this war, they want to eliminate all the risk and profit the money there. Can you talk a little bit about the establishment of this new central bank, particularly given the timing of it? Yeah. So it's after the war. And there's this big question that, okay, we know bank suspended species payments. We're not on the gold standard. How exactly do we go back? So there's some, there's the old Republican route, which says, well, we just need to contract the currency. We need to sort of get rid of all the bloated credit expansion and everything. Then there's other groups that say, really, the national Republicans that say, well, why don't we just charter a new central bank in that the central bank will help the state banks resume species payments by providing them loans, right? This is really just a complicated roundabout way of saying, we're going to inflate our way out of resuming a species payments, which doesn't make any sense whatsoever. And it's not intended to. So there's this big push to get a central bank. Well, it's all the wildcat banks. We just standardized the currency. We need to have one large central bank check all of the other all the other banks and just sort of slowly take over the nation's currency, et cetera. These are kind of the political arguments. The big sort of economic kind of crony motivation was you get Aster and Gerard, they had bought a bunch of government debt during the war. And they wanted to have Congress charter a new central bank where you could acquire ownership, acquire stock in this bank by exchanging your government securities for the stock. So this would increase the demand for government bonds, which would increase their price, which would lower some of the risk of the investment. So if you bought bonds at a highly depreciated rate, you're now getting the government to increase the value of that debt. So you can make a windfall gain. And this is what Aster and Gerard hoped to do, which they were able to get through, which they were able to accomplish once Congress did charter the central bank. I also just want to note that and during this time period, the central bank is just one of the policies that John Randolph remarks is out Hamilton. It's out Hamilton's Alexander Hamilton, which I just find like a really great way of describing it. But yeah, we have this new second bank of the United States. It was chartered in 1816. It opens its doors in 1817. And it's just there to provide a bunch of credit to privileged businesses, to state banks, et cetera. So it's just a repeat of Hamilton's bank and it just shows you how much the Republicans, how far gone the Republicans are. Previously, fighting the bank was their big criticism of the federalists. Now they're just chartering their own bank. And just to add insult to entry, then on top of this, we have a whole new level of tariffs and things like that. So we are now seeing once again, Republican party engaging in the same sort of protectionist policies, just to round it out on nicely. And so again, it is now taken between the Jeffersonian administration, the Madison era, all the remnants that were there of whatever existed of the old republic is gone, then buried. John Randolph is out there by his own, as a lone wolf, just being completely disrespected. This is the environment which we are now left with 16 years in. It is interesting, though, that they go one step too far. You highlight there's a congressional attempt to increase their pay that backfires spectacularly. As perhaps a moment of humility to all of the goings on in DC at this time. Can you just touch on that episode? Yeah. So there's one thing you have to understand that people really got upset at back in the day. And this was just something that whenever they tried to do it in Congress, people always revolted the next election. And this is why I think we now have an amendment that was passed in the early 90s. Long after it was announced, way at the beginning of the country's founding, basically preventing this. If you're a politician and you want to raise your own pay, don't raise your own pay for the current congressional session and then sock the taxpayers with the bill. This just seems like an enormous insult to most people because the public is suffering during the war. There's all these issues. There's all these sacrifices being made. And then sort of in this chaos of the post war economy, Congress basically votes to increase its pay. And then they just present the taxpayers with the bill. So this compensation was just seen as enormously egregious. And it leads to a significant turnout and turnover in the elections of 1816 when Monroe is made president. He was pretty much running unopposed at that time period. But a lot of congressmen are kicked out because they had voted for this law. And just as kind of one last kind of Machiavellian gesture on behalf of Madison, you highlight how even though he vetoes a bill for internal improvements, that the underpinning here, that the actual justification for the intent is not quite some sort of last second return to old Republican values, but rather a way of trying to have his cake and eat it too as he kind of exits from the stage here. Yes. Because Madison basically wanted, he wanted an amendment to enable Congress to engage in this, not as like a restrictive amendment. He just wanted to have Congress basically settle the issue once and for all. He had voted for appropriations for the National Road before. This is kind of him just sort of raising his constitutional screw, you know, scruples a little bit and just sort of arrogantly saying, well, this isn't as nationalist as I want to do it again. He had previously done that with the bank. He had actually vetoed a bank bill earlier because it was too private. He wanted the government to have more control over it. So this, again, some people have thought this is him making kind of like a laissez-faire stand. That's not Madison. You got to sort of realize it in its full context here, but this is Madison just simply saying he wanted more cronyism involved, basically. And the election that that leads us with is Monroe who, it's James Monroe, versus the man named William Crawford, who's one of those figures that is very interesting in this period of time, often overlooked. Is there anything from this early battle that people need to know just within this contest between Crawford and Monroe? Yeah. So by the time of the election of 1816, the Republican Party is basically the only party. The Federalists are more or less dead. Whoever they put up is just going to get slammed at the polls. They might scrape up some of New England, but that's about it. So really, whoever gets the Republican nomination really wins the presidency. So at this time, things were decided through a congressional caucus where basically the caucus of congressmen would decide who would get the nominee of their respective party, Federalist or Republican. So the Republican contest was between James Monroe, a former anti-Federalist who had really just become Madisonian, and William Crawford of Georgia. He was from Virginia. He moved to Georgia. He in many ways was sort of the old Republicans hoped he was a small government in certain respects. And so they were kind of hoping that, okay, we could get him, we could secure, maybe have some sort of return to what we want. Just, he's our best option. There's a couple issues with this. One William Crawford basically says he's going to run, says he's not going to run. Then he basically agrees to let Monroe become the nominee with the expectation that eight years from now he'll be the chosen one. You don't never run your life off of promises. This is always a big issue. Another important point, I don't talk about this in my book. This is one of the things that got cut. So I find this whole thing fascinating. So William Crawford was Secretary of War at this time. And right before the caucus, he announced some sort of policy, announced the policy with how to best deal with the Indian question in the Southwest at this time here, the Southwest, Western Georgia, Alabama, Mississippi, you know, parts of Tennessee, you know, around this part. So he said, we're getting these issues. We're getting these problems where settlers are getting into fights with Indians over land ownership and all of this stuff. That's a fascinating story. So William Crawford's solution was he said, well, he takes a very like progressive response. He says, we should just engage in interracial marriage. Like that's the way we resolve these conflicts. We'll just marry, we'll just marry the Indians. And his rationale is really funny because he says, look, we're already letting in all of these immigrants from Europe. He's referring to Irish people. So he's like, we're marrying the Irish. We might as well marry the Indians, right? Like that's the solution. And Crawford has this, there's proposal that like just mortifies people in Virginia. They're like, what? So that was one reason why the tail end, he basically did not get the nominee in the caucus was he sort of sabotages himself with this perfectly reasonable plan. That's just like, it's just, it's just way too far ahead for the year 1816. But yeah, there's no Crawford. And then we get stuck with Monroe, which is kind of unfortunate. But I've always been a Crawford fan. I like him. He's a good guy. And we'll talk more about him in the election of 1824. Because who else liked him? Our good friend, Martin Van Buren. Good friend, Martin Van Buren. Stay tuned. So with that being said, we have now made it through the Madison administration. And if you do not hate Jimmy Madison yet, well, then you need to just do further reading that you can get in cronyism, liberty versus power in America, 1607, 1849. Again, there is a nice coupon code in the Mesa store using LVP. It will get you savings on that. But until next time, if you have been enjoying the content here on liberty versus power, please rate, review, share all that good stuff on all major platforms for Patrick Newman. This has been Thode Bishop. Thank you for joining us.