The Failed State of Franklin

The Failed State of Franklin Founded in 1784 with the intent of becoming the fourteenth state of the new United States, the State of Franklin was located in what is now Eastern Tennessee. The story of Franklin - and how it failed - highlights how the victorious end of the American Revolution in 1783 actually left the new Union of states in a fragile condition. How Franklin Came to Be The costs of fighting the Revolutionary War left the Continental Congress facing a staggering debt. In April 1784, the legislature of North Carolina voted to give Congress some 29 million acres of land - about twice the size of Rhode Island - located between the Appalachian Mountains and the Mississippi River to help pay its share of the war debt.   However, North Carolina’s â€Å"gift† of the land came with a major catch. The cession document gave the federal government two years to accept complete responsibility for the area. This meant that during the two-year delay, the western frontier settlements of North Carolina would be virtually alone in protecting themselves from the Cherokee Indians, many of whom remained at war with the new nation. Needless to say, this did not sit well with the residents of the ceded region who feared that the cash-starved and war-weary Congress might even sell the territory to France or Spain. Rather than risk this outcome, North Carolina took the land back and began to organize it as four counties within the state. After the war, the frontier settlements west of the Appalachian Mountains and east of the Mississippi had not automatically become part of the United States. As historian Jason Farr wrote in the Tennessee Historical Quarterly, â€Å"It was never assumed.† Instead, Congress gave the communities three options: become parts of existing states, form new states of the union, or become their own sovereign nations. Rather than choosing to become a part of North Carolina, the residents of the four ceded counties voted to form a new, fourteenth state, which would be  called Franklin. Historians suggest that to some extent, they may have agreed with George Washington, who suggested that they had become â€Å"a distinct people† with cultural and political differences from those in the Atlantic states who had fought for American independence. In December 1784, Franklin officially declared itself to be an independent state, with Revolutionary War veteran John Sevier reluctantly serving as its first governor. However, as historian George W. Troxler notes in the Encyclopedia of North Carolina, Franklin’s organizers did not know at the time that North Carolina had decided to take it back. â€Å"The December 1784 constitution of Franklin did not formally define its boundaries,† Troxler wrote. â€Å"By implication, jurisdiction was assumed over all of the ceded territory, and area approximating the future state of Tennessee.† The relationship between the new Union, its 13 Atlantic Seaboard states, and the western frontier territories had gotten off to a rocky start, to say the least. â€Å"There was little concern for western political and economic interests during the Confederation era, especially among the northeastern elite,† Farr writes. â€Å"Some even assumed that frontier communities would remain outside the union.† Indeed, Franklin’s declaration of statehood in 1784 stirred fears among the Founding Fathers that they might not be able to keep the new nation together.   The Rise of Franklin A delegation from Franklin officially submitted its petition for statehood to Congress on May 16, 1785. Unlike the statehood approval process established by the U.S. Constitution, the Articles of Confederation in effect at the time required that new petitions for statehood be approved by the legislatures of two-thirds of the existing states. While seven states eventually voted to admit the territory as what would have been the 14th federal state, the vote fell short short of the required two-thirds majority. Going It Alone With its petition for statehood defeated and still unable to agree with North Carolina over several issues including taxation and protection, Franklin began operating as unrecognized, independent republic. In December 1785, Franklin’s de-facto legislature adopted its own constitution, known as the Holston Constitution, which closely tracked that of North Carolina.    Still unchecked - or perhaps unnoticed due to its isolated location - by the federal government, Franklin created courts, annexed new counties, assessed taxes, and negotiated several treaties with area Indian tribes. While its economy was based mainly on bartering, Franklin accepted all federal and foreign currencies. Due to the lack of its own currency or economic infrastructure and the fact that its legislature had granted all of its citizens a two-year reprieve on paying taxes, Franklin’s ability to develop and provide government services was limited. The Beginning of the End The ties that  held Franklin’s unofficial statehood together  began to unravel in  1787. In late 1786, North Carolina offered to waive all back taxes owed to it by Franklin’s citizens if the â€Å"state† agreed to reunite with its government. While Franklin’s voters rejected the offer in early 1787, several influential citizens who felt disenchanted by the lack of government services or military protection in Franklin supported it the offer. Ultimately, the offer was rejected. North Carolina subsequently sent troops led by Col. John Tipton into the disputed territory and began to re-establish its own government. For several very contentious and confusing months, the governments of Franklin and North Carolina competed side-by-side.   The Battle of Franklin Despite the objections of North Carolina, the â€Å"Franklinites† continued to expand to the west by forcibly seizing land from the Native American populations. Led by the Chickamauga and Chickasaw tribes, the Native Americans fought back, conducting their own raids on Franklin’s settlements. As part of the larger Chickamauga Cherokee Wars, the bloody back-and-forth raids continued into 1788. In September 1787, the Franklin legislature met - for what would be the last time. By December 1787, the loyalties of Franklin’s war-weary and debt-laden citizens to its unrecognized government was eroding, with many openly supporting alignment with North Carolina. In early February 1788, North Carolina ordered Washington County Sheriff Jonathan Pugh to seize and sell at auction any property owned by Franklin’s Governor John Sevier in order to repay taxes he owed to North Carolina. Among the â€Å"property† seized by Sheriff Pugh were several slaves, who he took to Col. Tipton’s home and secured in his underground kitchen. On the morning of February 27, 1788, Governor Sevier along with about 100 of his militiamen showed up at Tipton’s house, demanding his slaves. Then, on the snowy morning of February 29, North Carolina Colonel George Maxwell arrived with 100 of his own better-trained and armed regular troops to repel Sevier’s militia. After less than 10 minutes of skirmishing, the so-called â€Å"Battle of Franklin† ended with Sevier and his force withdrawing. According to accounts of the incident, several men on both sides were wounded or captured, and three were killed. The Final Fall of Franklin The final nail in Franklin’s coffin was driven in March 1788 when the Chickamauga, Chickasaw, and several other tribes joined in coordinated attacks on frontier settlements in Franklin. Desperate to raise a viable army, Governor Sevier arranged for a loan from the government of Spain. However, the agreement required Franklin to be placed under Spanish rule. To North Carolina, that was the final deal-breaker. Strongly opposed to allowing a foreign government to control what it considered to be part of its state, North Carolina officials arrested Governor Sevier in August 1788. While his supporters quickly freed him from the poorly protected local jail, Sevier soon turned himself in. Franklin met its final end in February 1789, when Sevier and his few remaining loyalists signed oaths of allegiance to North Carolina. By the end of 1789, all of the lands that had been part of the â€Å"Lost State† rejoined North Carolina. The Legacy of Franklin While Franklin’s existence as an independent state lasted less than five years, its failed rebellion contributed to the framers decision to include a clause in the U.S. Constitution regarding the formation of new states. The â€Å"New States† clause in Article IV, Section 3, stipulates that while new states â€Å"may be admitted by the Congress into this Union,† it further stipulates that no new states â€Å"may be formed â€Å"within the jurisdiction of any other State† or parts of states unless approved by votes of the state legislatures and the U.S. Congress. Historical Events Fast Facts April 1784: North Carolina cedes parts of its western frontier to the federal government as repayment of its Revolutionary War debt.August 1784: Franklin proclaims itself as the 14th independent state and secedes from North Carolina.May 16, 1785: Petition for Franklin statehood sent to U.S. Congress.December 1785: Franklin adopts its own constitution, similar to that of North Carolina.Spring 1787: Franklin rejects an offer by North Carolina to rejoin its control in return for forgiving the debts of its residents.Summer 1787: North Carolina sends troops to Franklin to re-establish its government.February 1788: North Carolina seizes slaves owned by Franklin Governor Sevier.February 27, 1788: Governor Sevier and his militia attempt to recover his slaves using force but are repelled by North Carolina troops.August 1788: North Carolina officials arrest Governor Sevier.February 1789: Governor Sevier and his followers sign oaths of allegiance to North Carolina.By December 1789: All areas of the â€Å"Lost State† of Franklin had re-joined North Carolina.

Seasonal Effects in Stock Markets

Seasonal Effects in Stock Markets Read about how the seasons of the year affect the prices at stock markets. Prices in stock markets around the world are mostly driven by rapid changes in relevant information. But certain seasonal and calendar-related trends, and trends that have very little to do with the stocks themselves or economic conditions also influence the prices. The trends are well-known and are anticipated by most investors, so it is debatable how great an effect they really have; however, there are still ways a smart investor can take advantage of them. From a research and analysis point of view, understanding seasonal effects is important because they often explain changes in the markets that are not attributable to prevailing economic or business circumstances, and as such become a significant variable. The January Effect, the December Effect, and Santa Claus Rallies These three phenomena are closely related. The first to occur is the December Effect, which usually happens during the weeks immediately before and after Christmas, in which markets will decline. The reason for this is that many traders will sell off shares just before the end of the year, in order to claim a capital loss for the year and reduce their taxes. The January Effect is a market rally in the first week of January when the shares sold at the end of the year are repurchased. The effect is significant: According to investment advisors, Ibbotson Associates, since 1924 the average monthly returns for stocks in the S P 500 have been approximately half a percent higher in January than in the other 11 months of the year. Sometimes, particularly in years when the December Effect is especially strong or happens a bit earlier in the month of December (typically in years when Christmas Day falls in the middle of the week), the markets will experience a â€Å"Santa Claus Rally†. This is a bit of a recovery, though usually not as strong as the January Effect, thanks to share buying by bargain hunters. Read also:  Black Economy  |  Financial Crisis of 2008   The September Effect In the US markets, September is historically a low point during the year. Since 1926, the monthly average return for the S P 500 has been positive for every month except September, even taking into account huge declines in the stock market in 1929, 1987, and 2008. The September Effect is largely an American phenomenon; it does appear in markets outside the US, most often when the September drop in the US markets is especially strong, but not as consistently. The usual explanation for the September Effect is the end of summer, which is traditionally marked by the Labor Day holiday on the first Monday in September in the US. Consumer spending tends to decline in September, and the month is the beginning of the third quarter, historically the weakest period economically in the year. Markets rise again after September, as businesses and consumers begin to prepare for the holiday season in the last two months of the year. Turn of the Month Since at least the 1880s, and possibly earlier, the cycle in stock markets all over the world has been one in which the markets are highest in the few days at the beginning and end of the month, and lowest in the middle of the month. In the modern era, the effect is attributed to the behavior of mutual funds, a large proportion of which serve as investments for retirement funds. Money is usually directed into mutual funds at or shortly before the end of the month, increasing share purchases across the entire market for a brief period of time – usually, six to eight days overlapping the end of one month and a start of the next. The effect, however, has existed for much longer than mutual funds have, and so the explanation for it is incomplete. Some researchers have speculated that it is largely a psychological effect; people tend to be more optimistic and active at the beginning or end of a month, and more inclined to spend money. Turn of the Quarter Just as the beginning and end of the month tend to be more active periods in the stock market, the market at the end of the quarter usually advances as well. This is a more modern effect, and can usually be attributed to an activity derisively called â€Å"window dressing†: Fund managers who report their activities in detail on a quarterly basis will often purchase stocks that have performed well during the quarter in order to make their portfolios more attractive. Because window-dressing involves stocks that are generally already comparatively high-priced, the activity can have a big effect on the entire index. Prices changes in stocks in short periods – hours or days – move up or down in a logarithmic rather than a linear trajectory, so prices change upward when there is a significant amount of window-dressing taking place actually accelerate. Window-dressing is not illegal, but is generally regarded as unethical; many trustworthy fund managers do not engage in the practice, but enough others do that it has a noticeable impact on the market. Blue Mondays The first day of the work week traditionally is the worst day of the week for stock markets. Since 1885, the average daily return in the US markets has fluctuated between 0.4% and 0.8% during the Tuesday-to-Friday part of the week. The average daily return for Mondays, however, is actually a loss of about 1%. The effect is partly psychological; most people are apparently not enthusiastic about getting back to the daily grind after the weekend. There is also an identifiable cause in the reporting habits of companies, one which can be attributed, oddly enough, to a trend started by Adolf Hitler. Brutal megalomaniac though he was, Hitler was capable of being clever at times; in the last few years before the outbreak of World War II, he developed the habit of making his most provocative political moves over the weekend – a time he knew that politicians in France, England, and Russia were likely to be enjoying their days off in the countryside, unable to assemble and react quickly to whatever rotten stunt he was pulling. These days companies that have particularly bad news to report, items such as large financial losses, unexpected changes in key personnel, or other things that would surely have a negative impact on their share prices, tend to release the information over the weekend.