This is a more condensed version of a post I wrote a few years back. I wanted to repost it because recent financial turmoil in the news involving the collapse of the Silicon Valley Bank, as well as a couple of recent publications, have me thinking of the Panic of 1837.
In reading and publishing on the Second Bank of the United States and Panic of 1837, I have come across frequent citations to Richard Kilbourne’s work. Perhaps one of the reasons that his name appears so frequently in the literature is that he seems to have done original work in examining legal records, plantation records, and some of the little-known records of Natchez office of the Second Bank of the United States that are stored in the Hill Library at LSU. But for the reasons I describe below, I do not recommend citing him.
One of Kilbourne’s core claims, (which takes an inordinately long time to uncover given his dense, convoluted writing style) is that the Second Bank bears substantial blame for creating the conditions that led to the Panic of 1837. Although the allies of Andrew Jackson did make this claim in real time, there are few if any scholars I am aware of who today blame the Second Bank exclusively for causing the panic. And Kilbourne’s claims, when judged in totality with all of the evidence presented, do not amount to a persuasive case. Most scholars attribute the panic to the peculiarities of international trade and global movement of gold and silver, falling cotton prices, or the policies of Andrew Jackson: vetoing the Bank re-charter bill, removing the public deposits, issuing the Specie Circular, and signing the Deposit Act of 1836. It was not the Bank itself, but the Bank’s absence, that allowed the South's plantation banks to inflate a bubble in land, cotton, and slavery that eventually burst. See any number of authors from Jane Knodell to Calvin Schermerhorn to Ed Baptist.
Kilbourne’s words are indicative of a hard-line libertarian discourse. Now, libertarianism in this field of study is not inherently disqualifying. Richard Timberlake, Howard Bodenhorn, and Tyler Cowen are all libertarians who have done excellent work without overtly showing their politics, which is something that I aim for in my own academic work. But the difference between these scholars and Kilbourne is that the latter writes in an unserious, un-nuanced way. It may not be coincidental that Kilbourne, unlike the others, is not an academic historian by training. He seems ideologically predisposed to criticizing central banks and makes it clear that he believes that Jackson was correct for waging the Bank War.
Consider just a few of the problematic statements I have found in Kilbourne's book:
* Talking about current economic conditions (the manuscript dates back to the 1990s), Kilbourne writes, “the mammoth role government plays in underwriting our fiat monetary regime.” p. 1
* the Second Bank of the United States (BUS) “pressed its paper” on all parts of the country p. 4
* the BUS pressed its circulation, p. 40
* the BUS was the Leviathan of Chestnut St.
* the BUS didn’t lower exchange rates or rationalize them, or smooth them out, as most other authors have written, including myself and Jane Knodell. In Kilbourne’s words, the Bank manipulated exchange rates.
* Kilbourne writes that the job of a central banker demands arrogance (p. 104)
* In the conclusion of his book Kilbourne writes a rather bizarre commentary on the dangers of central banking and “printing money” and “currency debasement.” (p. 152)
* Here’s another quote: “[Jackson] was right to be suspicious of the [BUS], not so much because of what it had done, but because of the potential it posed for great mischief in the making and unmaking of the nation’s economy.” (p. 152). As I discuss in my book, there were several reasons to be skeptical of the Bank’s management, but none of the reasons are the ones contained in Kilbourne’s work. It’s also odd to say that one should not look at what the Bank had actually done, but what it might have done.
* Central bank monopolies on the issue of fiat money, according to Kilbourne, have consistently produced currency debasements (p. 152). He adds that central banks are incompatible with democratic government. This is all glib rhetoric at this point and only tangentially related to the evidence he presents. Kilbourne would seem to fit right in with Ludwig Von Mises, Hayek, and the Mont Pelerin Society. To speak of “currency debasement” as if it's an actual thing is shocking and seems reminiscent of gold bugs and those who think it would be a good idea to return to the gold standard.
In his conclusion, Kilbourne writes that central banks have only stuck around because of the modern totalitarian state (p. 152). What on Earth is he talking about? If the U.S. is totalitarian, how would one characterize China and Russia? It also raises the question of what type of political economy Kilbourne thinks is ideal?
What are other issues I have found in Kilbourne’s book? He does not engage historiography in any meaningful way. He understates the role of slavery when it comes to explaining the workings of the southern economy and how slave-grown cotton and slave mortgages helped form the basis of southern plantation banks. He did not identify the Union Bank of Mississippi or the Union Bank of Florida as plantation banks, and thus, omits critical information.
Now, why do I say that one should not cite Kilbourne? Citation styles differ widely among authors. Beyond the requisite avoidance of plagiarism and giving proper credit where credit is due, a citation to me is an alert to the reader, “here is where I borrowed this idea,” or “here is someone who has influenced my thinking,” or “here is someone who has done significant work on this topic and if you want to know more, you should read this person’s work.” For someone who reads my own work, I cannot in good conscience cite Kilbourne’s work without noting the flaws. Reading Kilbourne will only leave you more confused. Another younger scholar whose name I won't reveal agrees with my assessment.
It may not be entirely relevant to his published work but in conversation with Kilbourne in person, over email, and over the phone, Kilbourne made highly ideological and even extreme statements about taxation being theft, inflation being theft, Lincoln being the worst president that destroyed the South’s economy, and how the bank bailouts of 2008 were wrong. I put all of this together with his book and concluded that he’s a bit of a crank. There are plenty of people out there who can describe the mechanics of the banking system in the antebellum era with language that is far more clear, straightforward, and not infused with a crude, un-nuanced libertarianism. Read the authors I cite in my book or article on the Panic of 1837. Cite them, and not Kilbourne.
In reading and publishing on the Second Bank of the United States and Panic of 1837, I have come across frequent citations to Richard Kilbourne’s work. Perhaps one of the reasons that his name appears so frequently in the literature is that he seems to have done original work in examining legal records, plantation records, and some of the little-known records of Natchez office of the Second Bank of the United States that are stored in the Hill Library at LSU. But for the reasons I describe below, I do not recommend citing him.
One of Kilbourne’s core claims, (which takes an inordinately long time to uncover given his dense, convoluted writing style) is that the Second Bank bears substantial blame for creating the conditions that led to the Panic of 1837. Although the allies of Andrew Jackson did make this claim in real time, there are few if any scholars I am aware of who today blame the Second Bank exclusively for causing the panic. And Kilbourne’s claims, when judged in totality with all of the evidence presented, do not amount to a persuasive case. Most scholars attribute the panic to the peculiarities of international trade and global movement of gold and silver, falling cotton prices, or the policies of Andrew Jackson: vetoing the Bank re-charter bill, removing the public deposits, issuing the Specie Circular, and signing the Deposit Act of 1836. It was not the Bank itself, but the Bank’s absence, that allowed the South's plantation banks to inflate a bubble in land, cotton, and slavery that eventually burst. See any number of authors from Jane Knodell to Calvin Schermerhorn to Ed Baptist.
Kilbourne’s words are indicative of a hard-line libertarian discourse. Now, libertarianism in this field of study is not inherently disqualifying. Richard Timberlake, Howard Bodenhorn, and Tyler Cowen are all libertarians who have done excellent work without overtly showing their politics, which is something that I aim for in my own academic work. But the difference between these scholars and Kilbourne is that the latter writes in an unserious, un-nuanced way. It may not be coincidental that Kilbourne, unlike the others, is not an academic historian by training. He seems ideologically predisposed to criticizing central banks and makes it clear that he believes that Jackson was correct for waging the Bank War.
Consider just a few of the problematic statements I have found in Kilbourne's book:
* Talking about current economic conditions (the manuscript dates back to the 1990s), Kilbourne writes, “the mammoth role government plays in underwriting our fiat monetary regime.” p. 1
* the Second Bank of the United States (BUS) “pressed its paper” on all parts of the country p. 4
* the BUS pressed its circulation, p. 40
* the BUS was the Leviathan of Chestnut St.
* the BUS didn’t lower exchange rates or rationalize them, or smooth them out, as most other authors have written, including myself and Jane Knodell. In Kilbourne’s words, the Bank manipulated exchange rates.
* Kilbourne writes that the job of a central banker demands arrogance (p. 104)
* In the conclusion of his book Kilbourne writes a rather bizarre commentary on the dangers of central banking and “printing money” and “currency debasement.” (p. 152)
* Here’s another quote: “[Jackson] was right to be suspicious of the [BUS], not so much because of what it had done, but because of the potential it posed for great mischief in the making and unmaking of the nation’s economy.” (p. 152). As I discuss in my book, there were several reasons to be skeptical of the Bank’s management, but none of the reasons are the ones contained in Kilbourne’s work. It’s also odd to say that one should not look at what the Bank had actually done, but what it might have done.
* Central bank monopolies on the issue of fiat money, according to Kilbourne, have consistently produced currency debasements (p. 152). He adds that central banks are incompatible with democratic government. This is all glib rhetoric at this point and only tangentially related to the evidence he presents. Kilbourne would seem to fit right in with Ludwig Von Mises, Hayek, and the Mont Pelerin Society. To speak of “currency debasement” as if it's an actual thing is shocking and seems reminiscent of gold bugs and those who think it would be a good idea to return to the gold standard.
In his conclusion, Kilbourne writes that central banks have only stuck around because of the modern totalitarian state (p. 152). What on Earth is he talking about? If the U.S. is totalitarian, how would one characterize China and Russia? It also raises the question of what type of political economy Kilbourne thinks is ideal?
What are other issues I have found in Kilbourne’s book? He does not engage historiography in any meaningful way. He understates the role of slavery when it comes to explaining the workings of the southern economy and how slave-grown cotton and slave mortgages helped form the basis of southern plantation banks. He did not identify the Union Bank of Mississippi or the Union Bank of Florida as plantation banks, and thus, omits critical information.
Now, why do I say that one should not cite Kilbourne? Citation styles differ widely among authors. Beyond the requisite avoidance of plagiarism and giving proper credit where credit is due, a citation to me is an alert to the reader, “here is where I borrowed this idea,” or “here is someone who has influenced my thinking,” or “here is someone who has done significant work on this topic and if you want to know more, you should read this person’s work.” For someone who reads my own work, I cannot in good conscience cite Kilbourne’s work without noting the flaws. Reading Kilbourne will only leave you more confused. Another younger scholar whose name I won't reveal agrees with my assessment.
It may not be entirely relevant to his published work but in conversation with Kilbourne in person, over email, and over the phone, Kilbourne made highly ideological and even extreme statements about taxation being theft, inflation being theft, Lincoln being the worst president that destroyed the South’s economy, and how the bank bailouts of 2008 were wrong. I put all of this together with his book and concluded that he’s a bit of a crank. There are plenty of people out there who can describe the mechanics of the banking system in the antebellum era with language that is far more clear, straightforward, and not infused with a crude, un-nuanced libertarianism. Read the authors I cite in my book or article on the Panic of 1837. Cite them, and not Kilbourne.
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