Transcript Bank of the United States (BUS)

Jacksonian Democracy at
Flood Tide, 1830-1840
The vain threats of resistance by those who (in South
Carolina) have raised the standard of rebellion shew
their madness and folly….In forty days, I can have
within the limits of So. Carolina fifty thousand
men….The union will be preserved. Andrew Jackson,
1832
“Nullies” in South Carolina
• The “abominable” Tariff of
1828 angered the Southerners.
If the federal government could
restrict the economy by raising
such a high tariff, could it not
also restrict or abolish slavery?
• Congress passed a new Tariff
of 1832 which lowered the tariff
from 45% to 35%. This was
still too high for the
Southerners.
• Nullifiers (those who wanted
to nullify the Tariff) and
Unionists (those who wanted
to support the union) clashed
in the South Carolina state
election of 1832.
• The state legislature of South
Carolina met in Columbia
and declared:
– The existing tariff to be null and
void.
– The assembly also called upon
the state legislature to
undertake any necessary
military preparations.
– If necessary South Carolina
would leave the Union
• Jackson, hating Calhoun
(Peggy Eaton affair) pledged
to uphold the Union at all
costs.
• Henry Clay of Kentucky (also a foe
of Jackson-”the Corrupt Bargain”)
proposed a compromise:
– Reduce the tariff by 10% now
down to 20%
• New England and the middle
states (mid-Atlantic) opposed the
tariff decrease.
• Calhoun and the South favored the
compromise
• Jackson did not have to use force
but Congress did pass the Force
Bill or as South Carolina called it,
the “Bloody Bill.” The bill
authorized the president to use the
army and navy if necessary to
collect funds.
• A pro Unionist minority within
South Carolina had been
gathering guns in support of
the Union.
• South Carolina did nullify the
unnecessary Force Act
though nothing ever came of
this act.
A Victory for Both Union and Nullification
• South Carolina emerged as
the winner of this conflict. It
had caused the federal
government to back down and
lower the tariffs.
• Celebrations emerged through
South Carolina. Charleston“the Cradle of Secession.”
• Unfortunately, nullification
eventually gave way to
succession.
• Later generations, looking back,
have condemned the “appeasement”
of South Carolina in 1833 as sheer
folly. In 1860 it was the first to
secede. If Jackson had reacted
harshly, there might not have been a
Civil War.
• However, violence breeds violence.
Armed invasion
might
have aroused other southern states
and started a civil war. “Force is a
confession that statesmanship has
failed.”
• Compromise was in the American
tradition, and in 1833 any other
course of action seemed unwise.
The Bank as a Political Football
• President Jackson did not hate all
banks, he disliked those with enormous
influence and power as did he dislike
overly large and powerful businesses.
He especially disliked the Bank of the
United States (BUS)-(established by
Hamilton using the Necessary and
Proper Clause). He felt that the Bank
hurt the economy by its “wild-cat” banks
in the West and forcing the foreclosure
of many western farms.
• Henry Clay, a National Republican (a
more conservative side of the
Republican Party who favored stronger
national government and less
sectionalism among states) proposed
an extension on the bank four years
early.
• Clay was seeking to trap Jackson.
If Jackson vetoes the bill he would
alienate the Eastern votes; if he
accepted the bank bill, he would
alienate the Western states.
• Seeing what Clay was doing,
Jackson vetoed the extension of
the bank declaring it to be
unconstitutional but overstepping
the constitutionality of the bank
declared by John Marshall of the
Supreme Court (McCulloch v.
Maryland). Jackson also with one
stroke did what it would take
Congress ¾ to do-override a veto.
It appeared that Jackson regarded
the Executive branch to be
superior to the Judicial branch.
• Jackson, not only declared the bank
as anti-western but anti-American. A
large majority of its stockholders
were foreigners, chiefly Britons.
• The West seemed to be against the
east; the log cabin against the
business office; the debtor against
the creditor; the American against
the foreigner, the states’ righter
against the centralizer (unionist).
• Jackson’s veto greatly strengthened
the power of the presidency.
• The Bank issue was now center
stage for the 1832 election.
Brickbats and Bouquets for the Bank
• The bank was undeniably anti-western
in its strong hostility to the “wildcat
banks” that provided financial help for
western expansion. The bank had
foreclosed on many western farms
and had aided eastern businesses.
• The bank was Plutocratic (run by an
elite aristocracy) headed by Nicholas
Biddle (Czar Nicholas I). The bank
was in some degree autocratic (ruled
by one) and tyrannical (absolute
power).
• Biddle lent funds where they would
make influential friends. In 1831 59
members of Congress borrowed sums
from “Biddle’s Bank.”
• Biddle’s loans to newspaper editors
ensured a “good press.”
• There was good in the bank:
– It made a financially sound
organization with some restraint
on fly-by-night banks.
– Reduced bank failure
– Promoted economic expansion
by making credit and sound
currency reasonably abundant
– Safe depository for the funds of
the Washington government
• The bank though, seemed against
the egalitarian (equality in
government, economy, and under
the law) credo of American
democracy.
“Old Hickory” Wallops Clay in 1832
• The election of 1832 saw Jackson as
a Democrat and Clay as a National
Republican.
• In 1832 a new party, the Anti-Masonic
party, entered the presidential race. It
was opposed to the fearsome secrecy
of the Masonic order. It grew in New
York and the middle Atlantic and New
England states. Since Jackson was a
Mason, the party was also an antiJackson party.
• Many religious groups seeking to use
political power to effect moral and
religious reforms, such as prohibiting
mail deliveries on Sunday and
keeping the Sabbath holy. Jackson
was generally opposed to all
government meddling in social and
economic life.
• The Anti-Masons and the
National Republicans called for
a national nominating
convention to name
candidates. They also added a
formal platform, publicizing
their positions on issues.
• Clay had the Bank of the
United States (Biddle’s Bank),
Daniel Webster, and
newspaper editors on his side.
• Jackson won with the West
and South, Pennsylvania, New
York, and New England. The
poor was on his side (1824,
1828, and 1832)
Transplanting the Tribes
• The American population rose to
nearly 13 million by 1830, three
times that of 1790. Most of the
states east of the Mississippi had
been admitted, leaving islands of
Indians surrounded by hungry land
buyers.
• More than 120,000 Native
Americans lived east of the
Mississippi in the 1820’s. Federal
policy varied:
– The Washington government
recognized the tribes as
separate nations and agreed to
acquire land through formal
treaties
– During the late 1700’s a great
movement went out to “civilize”
and “Christianize” the Indians.
– In 1793 Congress appropriated
$20,000 to promote literacy,
agricultural and vocational
instruction
• The Cherokees of Georgia made
remarkable efforts to learn the
was of the whites. They adopted
a system of settled agriculture
and a notion of private property.
Missionaries opened schools.
They adopted a written
constitution that provided for
executive, legislative, and judicial
branches of government. Some
became prosperous cotton
planters and slaver holders.
• The Five “Civilized Tribes” of the
Southeast were: the Cherokees,
Creeks, Choctaws, Chickasaws,
and Seminoles
• The Georgia legislature in 1828
declared the Cherokee tribal
council illegal. They appealed to
the Supreme Court which upheld
their rights. Jackson who wanted
to open Indian lands to white
settlement, refused to recognize
the Court’s decisions. He said,
“John Marshall has made his
decision; now let him enforce it.”
• Jackson proposed a removal of the
eastern tribes beyond the
Mississippi to Oklahoma. Many
died along the way. This was
called “The Trail of Tears”.
• The bureau of Indian Affairs was
established in 1836. Oklahoma was
to be the Indian’s land. It only lasted
about 15 years.
• Sauk and Fox braves from Illinois
and Wisconsin led by Black Hawk
resisted eviction. They were crushed
in 1832 by Lieutenant Jefferson
Davis of Mississippi and by
volunteers including Captain
Abraham Lincoln of Illinois.
• The Seminole Indians, joined by runaway black slaves, retreated to the
swampy Everglades of Florida. From
1835-1842, they waged a guerrilla
war that took the lives of some fifteen
hundred soldiers and proved to be
the costliest Indian conflict in
American experience.
• Americans wanted Texas which they
had abandoned to Spain when
acquiring Florida in 1819. Mexico
won its independence before Spain
was able to populate the area.
• In 1823 the Mexican government
gave a huge tract of land to Stephen
Austin under the condition that:
– He would bring into Texas three
hundred American families
– Immigrants were to be Roman
Catholic
– The Immigrants would become
Mexican citizens
– Could not bring slaves into
Texas
• The immigrants did not obey the
rules. About 30,000 Americans
came into Texas. Most of the people
were God-fearing but some were
just ahead of the sheriff (“G.T.T.”gone to Texas).
• Davy Crockett and James Bowie
also came. Sam Houston, exgovernor of Tennessee also came to
Texas.
• Tensions mounted between the
immigrants and Mexican authorities
over slavery, immigration, and local
rights. Mexico had emancipated its
slaves in 1830 and prohibited their
further importation into Texas.
Dictator General Santa Anna
imprisoned Stephen Austin in Mexico
City in 1833. In 1835 Santa Anna
wiped out all local rights and started
to raise an army to suppress the
Texans.
• In 1836 the Texans declared their
independence and unfurled their
Lone Star flag with Sam Houston as
commander in chief. Santa Anna
brought 6,000 men against 200
Texans at the Alamo in San Antonia
and killed all of them after a 13 day
siege. More Texans were killed at
Goliad.
• “Remember the Alamo” became
the war cry of those in the United
States.
• On April 21, 1836, Sam Houston
routed the Mexican army and
captured Santa Anna. He signed
two treaties:
– Withdraw Mexican troops
– Recognize the Rio Grande as
the extreme southwestern
boundary of Texas.
• When released, he repudiated
the whole agreement as illegal
because it was extorted under
duress.
Texas: An International Derelict
• Americans had aided the war. Mexico
claimed that the Washington
government had violated international
law of neutrality. Though the federal
government did not collectively act, the
citizens did.
• Jackson did not want to recognize
Texas since it would set off the slavery
issue. Wanting Martin Van Buren
elected, Jackson did not recognize
Texas until after the election of 1837.
Jackson recognized Texas on the day
before he left office in 1837.
• Texas did not want just
recognition of their
independence, but union with
the United States.
• Anti-slavery crusaders in the
North were opposed to
annexation.
• Texas went to Britain and
France for support against
Santa Anna. This could have
violated the Monroe Doctrine
The Birth of the Whigs and the
Election of 1836
• As early as 1828, the
Democratic-Republicans of
Jackson had adopted the name
of “Democrats.” Jackson’s
opponents condemned him as
“King Andrew I” and adopted the
name of “Whigs” from the British
who opposed the monarchy in
the Revolutionary War.
• The Whigs emerged in the
Senate where Clay and Calhoun
joined forces in 1834 censuring
Jackson for the removal of
federal deposits from the Bank of
the United States (BUS).
• The Whigs encompassed those groups
opposed to Jackson. They included:
– Supporters of Clay’s American
System
– Southern states’ righters offended by
Jackson’s stand on nullification
– The larger northern industrialists and
merchants
– Evangelical Protestants associated
with the Anti-Masonic party.
• The Whigs strategy in 1836 was to run
several prominent “favorite son”
candidates (those who supported the
Whig party) in order to rob Jackson of
51%. If the vote went into the House of
Representatives, the Whigs could win
the vote. Henry Harrison, the hero of
Ohio at the Battle of Tippecanoe,
became the leading “favorite son.”
• Jackson supported Van Buren “Little
Van,”
Jackson’s Legacy
• Jackson’s Legacy-(Good
attributes):
– Bolstered the power of the
executive branch
– Signaled the political
coming-of-age of the West
– Led the common people
into national politics
– United the common people
into the Democratic party
– Proved that the people
could be trusted with the
vote
• Jackson’s Legacy-(Negative
attributes):
– Encouragement of the spoils
system (rewarding government
jobs for votes)
– Damage of the nation’s
financial system by weakening
the BUS. The nation was
deprived of a sound central
bank just s it was entering an
era of rapid industrialization
– The banking system was
composed of thousands of local
banks, many poorly managed.
– The banking system was
“democratized” in the sense
that no bank held a monopoly
on financial power. This though
led to thousands of bank
failures.
Big Woes for the “Little Magician”
• Martin Van Buren was the first
president to be born under the
American flag.
• Many Democrats resented him being
pushed into office by Jackson. Van
Buren inherited many of Jackson’s
political enemies.
• Worst of all, Van Buren inherited a
searing depression from Jackson.
Depression Doldrums and the Independent
Treasury
•
•
•
The panic of 1837 resulted from
speculation prompted by a getrich-quickism. Western land
speculators borrowed capital
from “wildcat banks.” The
speculation craze spread to
canals, roads, railroads, and
slaves.
The “Bank War” and the Specie
Circular also gave an additional
jolt to the poor economy.
Failures of wheat crops caused
grain prices to go high. Mobs in
New York City stormed
warehouses and broke open flour
barrels three weeks before Van
Buren took office.
• Two prominent British banks failed in
1836 while Jackson was still
president.
• Banks crashed including “pet banks”
(banks that Jackson channeled
money into that would have gone to
the BUS).
• Factories closed an unemployed
workers milled in the streets.
• The Whigs wanted government
intervention to help with the crisis.
Van Buren, following Jackson’s lead
of keeping government out of the
economy rejected the ideas.
• Van Buren devised the “Divorce Bill”
which created an independent
Federal Bank with branches in
several major cities. This bank would
not be tied to private banks. This
established government bank
eventually led to the Federal
Reserve System which was enacted
in the early 20th century and still used
in America.
“Tippecanoe” Versus “Little Van”
• Martin Van Buren was
renominated by the Democrats in
1840 and General William Henry
Harrison was nominated as the
Whig candidate. Harrison was
nominated, not so much for
excellence, but that his views were
not known and he had no political
enemies.
• The Wigs kept their platform
hidden so as not to create waves.
A Democratic newspaper editor
gave Harrison a political boost by
insulting him as an impoverished
old farmer who lived in a log cabin
and a barrel of hard cider. The
Whigs took the theme and ran with
it, portraying Harrison as being
from the West.
• The real Harrison was from one of
the FFVs (“First Families of
Virginia”). He was not povertystricken; he did not live in a log
cabin; and he did not drink hard
cider.
• The Whigs portrayed Van Buren as
an aristocrat who ate French food
with golden teaspoons from golden
plates. Ban Buren had actually
been raised in poverty.
The Log Cabins and Hard Cider of 1840
• The Whigs marched miles for
Harrison, making miniature log
cabins. Whigs cried, “Tippecanoe,
and Tyler too…Van is a used-up
man.”
• The election of 1840 reached an
intellectual low in 1840.
• Harrison won the election.
However, the Democratic party
was soon to emerge as a powerful
force.
The Two-Party System Emerges
• Political parties had been
thought to be injurious to the
health of the country.
However, the American
political world changed
dramatically I the era of the
New Democracy. Jackson had
given formation of a vigorous
and durable two-party system,
which had fully come of age
by 1840.
• Both parties, the Democrats
as well as the Whigs, grew out
of the Jeffersonian republican
party. Each laid claims to
different aspects of the
republican inheritance.
• Jacksonian Democrats
promoted the liberty of the
individual and were against
the privileged in government.
• Whigs promoted the natural harmony of
society and the value of community, and
were willing to use government to
achieve their objectives.
• Democrats clung to states’ rights and
federal restraint in social and economic
affairs.
• Whigs tended to favor nationalism; a
renewed national bank; protective tariffs;
internal improvements; public schools;
and increasingly, moral reforms such as
the prohibition of liquor and eventually
the abolition of slavery.
• The two parties also had much in
common:
– Both were mass-based, “catchall”
parties that tried to mobilize as many
voters as possible for their cause.
Democrats tended to be more for the
common folk while Whigs served the
more prosperous. However, in
actuality, both parties had loyalties of
all kinds of Americans from all social
classes and in all sections.
• The social diversity of the two
parties had very important
implications. It fostered
compromises within each party
that prevented either from
assuming extreme or radical
positions.
• The geographical diversity within
the two parties kept the union
from becoming split into purely
sectional lines.