The end of the American Revolution brought Americans peace. But prosperity? Not so much.
Waging and winning a war with Britain had run the new nation heavily into debt. Worse yet, Britain seemed to take the whole business of losing rather poorly, and continued the conflict by inflicting economic pain on its former colonies. The British cut off American access to important markets in the West Indies, which would have helped the new country pay off its debts.
People felt the separation from Britain keenly when they tried to settle their own debts. When the British left, so did easy access to British coinage, which is what creditors demanded for repayment. They weren’t interested in bartering for goods or accepting paper money issued by the various state governments, because those notes were worth just a fraction of their face value. Therefore, many people faced debts they had no way of repaying.
Actually, courts ruled they still had one way to pay: Judges regularly intervened and foreclosed on debtors’ property.
From the creditors’ perspective, what was not to like about this arrangement? They got their money back. The people losing their farms, however, understandably felt differently.
In 1786, outrage over the debt crisis triggered some of the most extreme civil unrest the United States has seen. It also sparked uprisings in Vermont, which wasn’t actually part of the United States yet — it wouldn’t become a state for five more years.
If Vermonters were divided over the issue, so too was their government. Gov. Thomas Chittenden and his political allies were firmly on the debtors’ side. Vermonters petitioned the government to address the crisis. Some complained that the tax system unfairly burdened “the poor and middling class of people.” Others proposed a variety of remedies, Chittenden said, including the suggestion to “kill the lawyers and deputy sheriffs” who carried out the judges’ orders.
Chittenden agreed that lawyers were part of the problem. He called them “pettifoggers,” a term for unscrupulous lawyers.
But he offered a less draconian solution than wholesale slaughter. Chittenden asked the Legislature to give debtors more time to repay their loans. He also wanted to allow debtors to repay creditors with livestock, grain or other goods, instead of with hard currency. And his plans called for those goods to be assigned an inflated value — a sweet deal for debtors.
But wait, there’s more. Chittenden also wanted the government to create a bank that would issue scrip, essentially paper IOUs in lieu of legal tender, to Vermonters in exchange for a mortgage on their property.
Chittenden’s plans faced a serious obstacle, however: the Vermont Legislature. At the heart of the opposition was Nathaniel Chipman of Tinmouth. Though he had just left the Legislature, he still held sway over a sizable faction of lawmakers.
Chipman felt nothing but contempt for the people pleading for debt relief. He believed they were the authors of their own misery, and blamed their indebtedness on “their own shiftless habits — the idleness and dissipation so characteristic of the lower classes,” in the words of one historian.
In fact, when a group of farmers gathered in Wells to highlight the economic conditions that had driven them into poverty, Chipman published a poem mocking them. If there was going to be class warfare, Chipman was all in.
He hated Chittenden’s proposals, which he saw as giving in to the mob. As a lawyer, Chipman believed in the sanctity of contracts. The last thing government should do retroactively, he believed, was change the terms of loan agreements.
He also made a pragmatic economic argument: If the government created a bank to issue scrip, it would cause inflation to soar. The value of that temporary paper money would plummet, and soon Vermonters’ debt problems would be even worse, he argued.
As positive as he was that his reasoning was correct, he believed the timing was wrong. The uproar over foreclosures was so strong that it was politically dangerous to oppose Chittenden’s proposals immediately. Instead, Chipman’s faction argued passionately and disingenuously that some sort of debt relief was indeed vital — so vital that the people should decide what form that relief should take.
The faction called for a public referendum on the matter to be held in a little over two months’ time, in January 1787. It was a stalling tactic. They hoped that in the meantime popular support for debt relief would wane.
Chittenden formally presented his relief proposals to the Legislature at a session in Rutland on Oct. 31, 1786.
His timing seemed impeccable. Just before sunrise that same day, a group of about 30 ordinary Vermonters had tried another approach to stop court-ordered foreclosures. Led by blacksmith Robert Morrison from Hartland and farmer Benjamin Stebbins from Barnard, the men gathered outside the courthouse in Windsor, where many debt cases were heard. They tried a tactic being used around the region, including in western Massachusetts, where farmers were fighting to stop foreclosures by preventing courts from convening.
That uprising became known as Shays’ Rebellion after one of its leaders, farmer and Revolutionary War veteran Daniel Shays. Foreclosure opponents believed they were continuing the struggle for freedom that had started with the recent Revolution, but government leaders viewed them as a threat to the new country.
Members of the mob in Windsor were armed with guns, bayonets, swords and clubs. For good measure, some men brought the fife and drum. The prospect of a little music did nothing to lighten the mood. Everyone knew the instruments were also used to issue orders in battle.
State’s attorney Stephen Jacob and county sheriff Benjamin Wait rushed to the courthouse to ensure that it would open. They read the men the riot act, warning them that if they didn’t disperse, the sheriff and his men would meet them with force. The threat worked; the protesters dispersed.
But Jacob and Wait weren’t willing to leave it there. They hauled Morrison into court for his role in the near-riot. Morrison threw himself on the mercy of the court, which sentenced him to a month in jail and fined him.
In response, a group of 30 to 40 armed men gathered at a home in Hartland and devised a plan to march on the jail to free Morrison. Jacob and Wait got wind of the meeting and took a posse to break it up. In the ensuing fight, involving clubs, the butts of guns and bayonets, Jacob and Wait were both injured, but no one was killed. Many of the plotters were arrested and fined.
The unrest didn’t end there. In late November, a hundred local residents, many of them armed with clubs, stormed into Rutland’s courthouse and demanded that it adjourn for the day rather than hear debt cases. When the judges refused, the mob called for reinforcements and soon grew to 150 people. The Vermont militia arrived and scared off the mob, arresting some of the leaders.
Chipman had been wise to delay the public vote on debt relief measures. The unrest showed the fierce contempt some people felt toward foreclosures, but the intensity of those feelings also apparently unnerved Vermonters, who voted overwhelmingly against the debt proposals.
Shays’ rebellion in neighboring Massachusetts continued until that state’s militia defeated it. Hundreds or perhaps thousands of Shaysites, as the rebels were known, including Shays himself, fled into Vermont.
When Massachusetts sent an envoy to ask Vermont to arrest rebel leaders, Chittenden was in a quandary. Realizing that Chipman’s faction was in the ascendancy, he supported a resolution praising the Vermont militia’s role in defeating the local insurrections.
But his government stopped there. He refused to help Massachusetts root out the rebels who now called Vermont home.