Hidden History: How Pressure to Expand Slavery Led to the US War on Mexico

Episode 11: A Restless South Expansion and Conflict

A New History of the American South

Dr Edward Ayers (2018)

Film Review

Ayers uses this lecture to explain the development of the US two-party system in the 1820s and how pressure to expand slavery led to the US War on Mexico. The founding fathers had warned against political parties, worried scheming opportunists would seize control of them.

The election of America’s first populist president Andrew Jackson (1828) would play a major role in the formation of the two party system. Also important was the decision by many legislatures to eliminate property qualifications for voting. In 1828 the popular vote for president was double that of 1820.

Identifying himself as a man of the people, Jackson claimed to have wrested control of the country from the wealthy elite. In doing so, he also increased the powers of the presidency beyond those described in the Constitution. Although his forced march of Native Americans to Oklahoma supported southern interests, he sided against the South when he shut down the South Carolina nullification movement in 1933.*

Jackson’s opponents (men with business and trade interests) saw themselves as a counterbalance to the “monarchical” powers of the Jackson presidency and began calling themselves Whigs.** His supporters (small farmers and urban immigrants) became known as Democrats.

In 1845 a 3rd party candidate split the Whig vote and Jackson protege and expansionist*** James K Polk narrowly won the presidency. In 1846, Polk seized on a border skirmish north of the Rio Grande as an excuse to invade Mexico. After a two year war (1846-48), Mexico and the US signed a peace treaty that gave the US undisputed control of Texas,**** established the U.S.-Mexican border along the Rio Grande, and ceded to the United States the present-day states of California,

Although the Whigs (and most northerners) had opposed the war, they sought to capitalize on General Zachary Taylor’s military prestige by offering him the 1848 nomination. Following his election, growing congressional conflict over slavery led to a law declaring California a slave free territory and the Fugitive Slave Act (requiring northern states to return escaped slaves to their masters)

The Whigs split in 1854, following enactment of the Kansas-Nebraska Act proclaiming new states could decide for themselves whether they would allow slavery (effectively repealing the Missouri Comprise banning slavery north of the 33rd parallel). Most northern Whigs joined the anti-slavery Republican Party (formed in Wisconsin in 1854) and most southern Whigs joined the American Party and later the Constitutional Union Party.

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*The Nullification Crisis was a confrontation between South Carolina and the federal government in 1832–33 over the former’s attempt to declare null and void the federal Tariffs of 1828 and 1832. The resolution of the crisis in favor of the federal government helped to undermine nullification doctrine, the constitutional theory that upheld the right of states to nullify federal acts within their boundaries.

**The Whigs were a British political party between the 1680s and 1850s.

***The southern states favored westward expansion of the US as acquisition of new plantation land was essential to the health of the southern economy.

****The major fighting in the Texas war of independence (with several hundred state militiamen fighting the 3,000-strong Mexican army) ended on April 21, 1836. However the Mexican Congress refused to recognize the independence of the Republic of Texas, as the treaty was signed by Mexican President General Antonio López de Santa Anna under duress as prisoner of state militias. The United States recognized the Republic of Texas in March 1837 but declined to annex the territory as a state until its economy, based entirely on slaves and cotton, collapsed follow the panic of 1837. Texas formally became a state in 1845

Can be viewed with a library card on Kanopy.

https://pukeariki.kanopy.com/video/restless-south-expansion-and-conflict

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Marijuana Cash-Only Business in Colorado

 

Owing to recent legalization, recreational marijuana use is a growth industry in both Colorado and Washington State. In Colorado alone, annual turnover is projected to reach $10.2 billion by 2018. Yet owing to archaic federal banking laws, it remains a cash-only industry.

A BBC Business report gives the example of Pinkhouse Blooms. A chain of five marijuana dispensaries grossing over $100,000 a day, they remain a cash-only business. No Denver bank will give him a checking account. As Avinash Tharoor reports in the Huffington Post, the FBI is pursuing Bank of America, JP Morgan and HSBC for laundering billions of dollars of Mexican cartel money. Meanwhile they thumb their nose at legal marijuana merchants.

Relying on armored cars and armed security guards, owner Elliott Klug uses cash to pay his suppliers and employees – as well as $35,000 in monthly sales tax and $45,000 in state licensing fees.

Federal Laws Encourage Money Laundering

Although the Obama administration has directed federal attorneys not to prosecute marijuana users, growers, and distributors in states which have legalized marijuana (for recreational and/or medical use), banks that do business with marijuana producers and distributors remain in legal limbo. At present all federally insured banks that accept deposits from “drug dealers” are subject to suspension of their banking license and criminal prosecution under federal drug racketeering laws.

Both the Bank Secrecy Act and the Anti-Money Laundering Act were enacted to prevent money laundering. Ironically they do just the opposite in the eleven states with legal marijuana dispensaries. Cash-only businesses are notoriously susceptible to both tax evasion and money laundering. Without bank records, there’s no audit trail. Federal and state authorities only have the owner’s say-so for the amount of business they take in.

In February the Obama administration issued “guidance” that the Justice Department and FinCEN (under the Treasury Department) is “unlikely” to prosecute banks provided they meeting specified conditions, including reporting suspicious criminal activity to law enforcement. Unfortunately this “guidance” offers no real legal immunity, as all marijuana use is still illegal under federal law.

In 2011 Congressman Jared Polis (D-Colorado) tried to legislate immunity for banks doing business with medical marijuana dispensaries with his proposed Small Business Banking Improvement. The bill died in committee, and it doesn’t appear that similar legislation is forthcoming any time soon. Not if a myopic press release by Senators Charles Grassley and Diane Feinstein, as co-chairs of the Senate Caucus on International Narcotics Control, is anything to go by.

Their joint letter and press release castigate the Obama administration for “assisting those businesses that seek to inject the proceeds of criminal activity into the nation’s financial system.”

Makes you wonder when Feinstein was last in California, the state she supposedly represents. California was the very first state to set up legal marijuana dispensaries in 1996 when voters passed an initiative legalizing marijuana use for medical purposes.

Big Boost from State Marijuana Tax

Both Colorado and Washington have suffered major budget difficulties since the 2008 downturn. And in both states, legalizing (and taxing) recreational marijuana use promises a major cash injection for state coffers.

In Colorado, retailers pay a 10% marijuana tax in addition to 2.9% general sales tax to the state. County and city authorities may charge additional tax. In Denver, for example, the total sales tax can reach as much as 21%. This is in addition to a 15% excise tax charged on marijuana as it leaves the cultivation facility.

Washington charges a 25% excise tax on sales at each transaction level: from the producer to the processor, the processor to the retailer and the retailer to the customer. This is in addition to B&O (Business and Occupations) and sales tax all businesses pay. As of July 8, producers will be licensed by the Washington State Liquor Control Board to sell directly to consumers.

Small Local Credit Unions Do Business with Washington Dispensaries

In Washington State, two brave local (federally insured) credit unions (Salal Credit Union and Numerica Credit Union) have announced their intention to do business with marijuana dispensaries when they begin operation July 8. Unlike the big boys, they aren’t laundering money for the Mexican cartels or, presumably, speculating on derivatives and food futures

photo credit: Wikimedia Commons

Cross posted at Veterans Today