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1786 Economic Crisis in Vermont: Gov. Chittenden Wants to Tax La
1786 Economic Crisis in Vermont: Gov. Chittenden Wants to Tax Lawyers
by Sen. Bill Doyle
While the new nation was going through an economic crisis in 1786, the independent Republic of Vermont had its own economic crisis.
While Vermont had little debt compared to the thirteen original states after the Revolutionary War, it was not immune to currency inflation. As before the war, many old and new settlers used credit to buy land and build homes. Many settlers became financially overextended, and when they could not pay their creditors, foreclosure proceedings were instituted in the courts.
In 1784 people from Wells and other towns nearby met in convention and adopted resolutions “for a redress of grievances.” While the grievances were not printed, the following poem in the Vermont Gazette illustrates the concern about debt and courts:
Then lawyers from the courts expel,
Cancel our debt and all is well —
But they should finally neglect
To take the measures we direct
Still fond of their own power and wisdom,
Will find effectual means to twist ‘em.
Governor Chittenden, responding to these concerns, made a public address to Vermonters that was printed in Vermont newspapers. In discussing the reasons for the discontent he said, “law suits are become so numerous that there’s hardly money sufficient to pay for entering the actions, not to mention the debts or lawyers and officers’ fees. I have reason to believe that the expense of law suits for two years past has been nearly equal to that of any two years of the War, for a remedy one cries a Tender Act, another, a hank of money and others, kill the lawyers and deputy sheriffs.”
In the address he made reference to the Old Testament:
“In the time of war we were obliged to follow the example of Joshua of old, who commanded the sun to stand still while he fought his battle, we commanded our creditors to stand still while we fought our enemies.”
Gov. Chittenden spoke about the imbalance of trade. He said too many articles manufactured or grown in foreign countries had been bought by Vermonters instead of Vermonters producing wool and flax and manufacturing them. This had the effect of taking from Vermont much of its currency and most of its cattle.
Chittenden suggested “raising and manufacturing every article Vermont could produce.” He suggested that there should be a tax on lawsuits and all goods imported into Vermont except for absolute necessities. He also recommended the taxation of lands of recently chartered towns not settled in a timely manner.
Chittenden favored a state bank in order to make it easier for debtors to pay their creditors and a general tender act that would make paper script legal tender.
Needless to say, the lawyers in the state were angry with Chittenden’s plan to tax lawyers. The lawyers feared that establishment of a bank to issue paper money would lead to inflation and the devaluation of money.
The two leading lawyers who opposed Chittenden were Nathaniel Chipman, who late would become a United States senator, and Isaac Tichenor, who later became a 10-term governor. The method they devised to block Chittenden’s plan was to call for a referendum on many of his proposals. The referendum took place in 1787 and all of Chittenden’s proposals were defeated.
Not only were Chittenden’s legislative initiatives blocked by Chipman and Tichenor, lawyers made gains in the judicial branch. In 1786 the Vermont General Assembly elected Chipman as the first lawyer to serve on the Vermont Supreme Court.
Poem Calling for a Legal-Tender Act
(1786)
Thomas Rowley
By hardy creditors oppressed.
Who of our ruin make a jest,
While to assist them in their plans,
The law has furnished numerous clans
Of judges, justices and lawyers,
Relentless as their vile employers;
Sheriffs and deputies by scores,
That still are thundering at our doors;
And if we dare not given them battle,
Seize on our hogs, sheep, and cattle,
And to our creditors transfer them.
Who, with themselves and lawyers, share them.
Is not the Scripture full of phrases?
That speak aloud all poor men’s praises?
Declaring them God’s chosen ones,
To whom the earth of right belongs?
Forbidding all t’oppress their debtors,
Whom God esteems so much their betters?
Is’t not declared damnation waits
All creditors of great estates?
That they’ll be saved less easily
Than camel pierces needle’s eye?
Their good, far more than ours, we seek,
To make them humble, poor and meek,
That they may share those heavenly mansions,
To which they now have no pretensions.
Source Vermont Gazette (Bennington), 21 August, 1786.
Senator Bill Doyle serves on the Senate Education Committee and Senate Economic Affairs Committee, and is the Senate Minority Leader. He teaches government history at Johnson State College. He can be reached at 186 Murray Road, Montpelier, VT 05602; e-mail wdoyle@leg.state.vt.us; or call 223-2851.
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