Andrew Jackson destroyed the Bank, no one else. Not Martin Van Buren, not Wall Street bankers, not the Albany Regency, Amos Kendall, Roger Taney, or anyone else. Granted Jackson had the assistance of a number of shrewd, dedicated, and conscientious political operators, notably Kendall, Taney, Benton, Francis P. Blair and others, but they were all of secondary importance. It was Jackson who conceived the idea to smash the financial giant, and it was Jackson who determined how and when it should be done.
What was his motive? To some extent, the President was conditioned by his financial losses at an earlier time, possibly his views on States' rights and maybe even western prejudice, but fundamentially the Bank War was not an economic struggle, nor a contest between sections, nor an expression of hostility by the frontier toward the city, nor an act of spite or revenge; essentially it was a political war, or at least that is how it started. After 1833, it developed into something else again. But, in initiating the battle, Jackson's motivation was fundamentally political. He regarded the Bank as dangerous to the liberty of the American people because it represented a fantastic centralization of economic and political power under private control. It was a "monopoly" with special privileges, and yet it was not subject to presidential, congressional, or popular regulation. Only the financial interest of the B.U.S. constituted any real control of this "monster," and to Jackson that was no control at all.
The political motive, therefore, is absolutely central to the Bank War, at least in its initial stage. However, it was not a simple case of Jackson battling for democracy against a moneyed aristocracy, the few against the many, the rich against the poor, although obviously these can and have been read into the controversy. What Jackson wished to terminate, what he hammered at over and over again, was the Bank's enormous political "power to control the Government and change its character..." He blasted the institution as "an irresponsible power" spending its money "as a means of operating upon public opinion." He termed it a "vast electioneering engine."
For the President to decide by himself that this brain child of Alexander Hamilton had no right to exist in its present form took towering presumption. But Jackson was never especially deficient in that department. It also took courage - another of his virtues. Finally it required extraordinary political skill to bring off the complete destruction of the Bank, and here is where the President really excelled. Yet, despite a deep-seated prejudice against all banks that went back many years, he was very slow to move against the biggest of them, possibly because of his willingness to compromise with it at first, possibly because of his habitual caution, and possibly out of a need to instruct the people, his friends (with some notable exceptions), and Congress at almost every step of the way.
Following the initial battle with the Bank, when recharter of the institution was denied, the war intensified and developed into a disordered contest among politicians and businessmen from every section of the country who scrambled for advantage at the Bank's expense - everyone for himself, pushing for the main chance. It was an incredible demonstrataion of lusty men in a swiftly changing age struggling to get ahead by annihilating whatever stood in their way.
In other words the Bank War involved two phases: the first, stretching from 1829 to 1833, constituted a power struggle between Jackson and the Bank over the President's fear of the Bank's unchecked political and economic privileges; the second, continuing after 1833, was a highly complicated story of political and economic jockeying among "men on the make" who were out for anything they could get, each man for himself, snatching at every advantage...
The Second Bank of the United States was chartered by Congress in 1816, with the charter to run twenty years. The capital stock of the B.U.S. was assigned at 35 million dollars, one fifth of which was subscribed by the federal government, the rest by the public. A board of twenty-five men directed the Bank's affairs, appointed its administrative officers, invested its funds, and established its branch banks in the principal cities throughout the country. Five of the board members were appointed by the President of the United States, the others elected by the stockholders. In effect, the B.U.S. was a central bank, designed to regulate the credit and currency operations of the country. This it did, and did extremely well, despite Jackson's claims to the contrary. The Bank had authority to issue notes that were receivable for money owed the U.S. government, and it served as a depository for government funds that could be invested for the profit of the stockholders. Thus, the B.U.S. exercised tremendous influence in foreign and domestic finance, as well as unrivaled power over state banks. The profits from this tidy arrangement were shared by private investors, both American and foreign, and by the federal government.
The first president of the Second Bank was William Jones, a man of rare incompetence, a onetime Secretary of the Navy and Secretary pro tem of the Treasury. He was followed in 1819 by Langdon Cheves of South Carolina, a former Congressman and Speaker of the House of Representatives. The same year the presidency changed hands an economic depression struck the country. The panic was part of a world-wide dislocation, but it was intensified in the United States by Cheves' policy of restoring the Bank's credit by calling in loans and foreclosing mortgages. The B.U.S. gathered the notes of many state banks and then returned them for payment in cash: gold and silver. Sincy many of these unlucky banks were without specie, they slid into bankruptcy. The resulting depression brought a price collapse, unemployment, and in some areas, starvation. It was especially severe in the West where political repercussions continued to echo for almost ten years.
But the B.U.S was saved. It had gone through a terrible ordeal under Jones' mismanagement, but Cheves had steered it back to a position of financial strength and soundness. His work done, Cheves retired and was replaced as president in January, 1823 by Nicholas Biddle, a thrity-sevenyear-old scion of a wealthy and distinguished Philadelphia family. Biddle, hmself, was one of those impossibly gifted men. He had everything: brains, looks, money, and family, and now he assumed control of a financial colossus. Although he exercised this control with considerable restraint and discretion, nevertheless at times he could be arrogant and would prod the monster to a vicious display of its power. The Bank was subject to no regulatory check except what was imposed by the laws of business and the profit-minded demands of the stockholders. Under Biddle it prospered, branching into twenty-nine cities from its headquarters on Chestnut Street in Philadelphia and doing a business of 70 million dollars a year. As a central banking system, it provided the financial operations of the country with uniformity and regulation, and as such was of immense economic benefite to all the people . Despite rumors to the contrary, it handled only 20 percent of the country's loans; its note circulation was only one-fifth of the nation's total; and it held only one-third of the total bank deposits and specie.
Even so, to Andrew Jackson it was a monster, maybe half asleep, but hardly less dangerous. It was not so much the size of the beast that offended, though that was bad enough, or the amount of money stored in its care, but rather that it was unchained, that it was independent of the government and the people, that it had the means to nullify economic development, and that it frequently interfered in politics. A few years later, in summing up the administration's complaints against the institution, Roger B. Taney listed "its corrupting influence...its patronage greater than that of the Government - its power to embarrass the power of the Government - & to influence elections..." These were all basically political reasons, and the last-named - "influence elections" - was the one that especially concerned Jackson. It was really impossible for him to believe that a Bank with so much money and so many special prviileges could remain independent of the political process. And such involvement, said Jackson, threatened "to destroy our republican institutions." In June, 1829, just three months after his inauguration, the President told John Overton that he planeed to shange "the present incorporated Bank to that of a National Bank - This being the only way that a recharter to the present U.S. Bank can be prevented & which I believe is the only thing that can prevent our liberties to be crushed by the Bank & its influence, - for I [have learned] of the injurious effect & interference of the directors of the Bank had in our late election which if not curbed must destroy the purity of the right of suffrage."
Another thing: the monster discriminated. It did not respond when Andrew Jackson, the duly elected and lawful head of the national government, commanded; it only responded when Nicholas Biddle gave the order. It discriminated in other ways, too. It extended favors to a few men for the help they could render the Bank; and some of these men were important politicians, such as Daniel Webster, Henry Clay, William T. Barry and others, men on both sides of the political aisle, and who were indebted to the Bank for many thousands of dollars. This was another way it interfered in politics. At one point, Webster wrote to Biddle, "I believe my retainer has not been renewed or refreshed as usual. If it be wished that my relation to the Bank should be continued, it may be well to send me the usual retainer..." Now Webster served as legal counsel to the B.U.S., but his "retainer" covered more than his legal fees though a lot less than the "corrupt" intent he was accused of by Democrats.
That the Bank, therefore, did not generally abuse its privileges and that, by 1830, it contributed substantially to the welfare of the country is clear. That at any moment and for any reason it could also abadndon its responsibilities and scorch the nation with its fiery breath as it had done in 1819 is also very clear.
Jackson came to the presidency in March, 1829 with every intention of "chaining" the monster. His prejudice - no doubt nurtured by the bone-rattling financial misadventures of his early days and especially the harrowing history of the Allison land deal which forever confirmed his hostility to paper money and the agencies that issued it - was encouraged by several of his advisers. They assured him that the Bank's vast political power had been used against him in the presidential election of 1828, and that it would continue to be used against him in the future. Amos Kendall, for example, whose own hatred for the Bank emerged during the Relief War in Kentucky five years before, and Isaac Hill, who presented the President with documentary proof that the branch of the Bank in New Hampshire discriminated against friends of the administration, were especially effective in this regard. But, as one member of the Cabinet pointed out, Jackson had expressed "strong opinions against the Bank of the United States" even before becoming President.
In his first message to Congress in December, 1829, the Hero alerted the B.U.S. to his intentions. Those two short paragraphs at the end of the message were the tip-off. Interestingly enough, in this first warning, Jackson did not propose the destruction of the Bank. Probably, at first, he did not intend to kill it outright. He was willing to compromise with it on the bais of certain changes that would eliminate his constitutional objections. Also, he needed time to convince the people, his party, and Congress that tampering with the Bank was not the deranged suggestion of a lunatic westerner.
But Biddle would never compromise. Why should he? He was doing a splendid job, had many supporters in and out of Congress, and enjoyed the knowlege that the country needed and wanted his Bank - just as it was. But, to play it safe, he insinuated his way into the Jackson circle of friends by doing financial favors for those who had the good sense to appreciate them, not realizing that he was proving Jackson's contention that the Bank played politics. As added protection, Biddle generously proposed to pay off the national debt by January 8, 1833 - the eighteenth anniversary of Jackson's victory over the British at New Orleans - recognizing how appreciative the President would be for liquidating the debt and for doing it on such a memorable day. Of course, for this gracious gesture, there was a price: the continuation of the Bank's charter.
Whether he realized it at the time or not, Jackson had touched a very tender spot in the breast of many Americans by his message, particularly those seeking economic advantage who had been denied the assistance of the B.U.S. Several wrote the President complaining how the Bank was contemptuous of their demands and favored only those whose operations guaranteed huge profits to fatten the dividends of the great stockholders. Other would-be antagonists of the Bank were roused by Jackson's message: state bankers, for example, especially in New York and Baltimore, who resented the size, wealth, and controlling functions of the B.U.S. and the amount of profits pumped into Philadelphia; also, freeholding farmers, who regarded the Bank as the embodiment of all the corrupting forces in society threatening their simple republican way of life; and urban wage earners, who viewed the Bank as the largest monopoly among many monopolies equipped with special privileges to grind the faces of the poor; finally, there were lawyers and other professional men, small planters, merchants, and manufacturers - a diverse group of Americans, having at least one thing in common: they were all economically aggressive.
Yet despite this broad spectrum of sympathy for his apparent intention to modify the Bank's charter, Jackson did not proceed any further. He bided his time, for he was not a man to act precipitously. He talked about possible changes in the operation of the Bank, without indicating any urgency in his suggestion. For instance, at one time he tossed out the idea of tying the B.U.S. to the Treasury and restricting its not-issuing powers; at another, he thought of recommending to Congress the creation of a government-owned institution with branches in the several states. Otherwise, he did nothing. Unquestionably, part of his inaction during the early years of this administration was due to his problems over the Eaton affair and the breakup of his first Cabinet. Yet, when he chose his new Cabinet in 1831, he selected men who favored a National Bank - or some variation of it. They were not expressly hostile to a continuation of Biddle's institution, and probably most of them doubted that the matter would come up for a number of years, since the charter of the B.U.S. had several years to go before expiring in 1836.
But they figured without Biddle. Suddenly, almost without warning, he decided to ask for a recharter in 1832, four years before the date of expiration. On the face of it, this action seemed an excellent idea, since 1832 was a presidential election year. Biddle guessed that Jackson would never risk re-election by making the Bank an issue in the campaign. Inasmuch as he must request recharter anyway, Biddle felt he had a better chance of getting it if he asked before the election rather than afterward. Besides, if Jackson refused the request and vetoed the recharter bill, then Congressional candidates up for election would have to commit themselves on the issue one way or the other, and Biddle believed there were enough Americans who favored the B.U.S., and that a sufficient number of Congressmen would be elected to override the veto. Henry Clay, John Quincy Adams, and Daniel Webster concurred in the wisdom of the course. But what they failed to tell Biddle was that the action deliberately baited Jackson - it goaded him into a veto.
"Now as I understand the application at the present time," wrote Roger Taney, "it means in plain English this - the Bank says to the President, your next election is at hand - if you charter us well - if not - beware of your power." This was it precisely. Other men who were friends of the Bank and friends of the administration warned Biddle that the application would resoundingly prove the President's contention that the Bank was a political agency interfering in the electoral process and was in effect ordering the government either to comply with its will or be prepared to sustain a "severe chastisement."
Clay disagreed with this argument, however. "The course of the President in the event of the passage of the bill," he told Biddle, "seems to be a matter of doubt and speculation. My own belief is that, if now called upon he would not negative the bill..." Biddle concurred, and he initiated action by writing to Senator George M. Dallas of Pennsylvania on January 6, 1832 and presenting a memorial asking for renewal of the Bank charter. Three days later, the memorial was placed before each house of Congress, and, in turn, was referred to separate committees:
one in the House chaired by George McDuffie and one in the Senate presided over by Dallas.
Two months later, the Senate bill came to the floor for debate, and the support for the measure was so strong and so spontaneous that immediate action was necessary if the President's objections were to get a proper hearing. after a consultation among Democratic leaders, it was decided to move a House investigation of the B.U.S., thereby giving anti-Bank Jacksonians time to consolidate their forces and perhaps come up with information to discredit Biddle's company in the eyes of the American people. In the forefront of this fight in Congress stood Senator Thomas Hart Benton of Missouri, "Old Bullion," whose views about the danger of paper money corresponded exactly with those of the President. In the ensuing battle, he was an army in himself, converting Democrats into anti-Bank men, drilling Congressional forces against Biddle, and through his speeches in the Senate propagandizing the country about the evils practiced by the monopoly. He even arranged the details for the investigation of the Bank initiated in the House of Representatives, and he saw to it that the eventual report by the majority of the committee was loaded with enough examples of alleged abuses by the Bank to substatntiate the President's case against recharter.
Though the subsequent report shimmered with distorition, it made beautiful propaganda. Its charges were restated in Democratic newspapers across the country, libeling the Bank with claims of having violated the terms of its charter. The Washington Globe, edited by Francis Blair, led the other party organs in circulating the document and in arousing poublic opinion in defense of the President's cause. It launched a massive attack to "display the evil of the [B.U.S.], rouse the people [and thereby] prepare them to sustain the veto." It was a magnificently conducted campaign at all levels, one that again demonstrated the organizational splendor of the Democratic party.
Despite the strategy directed by Benton in Congress, the pro-Bank forces in Congress led by Clay and Webster could not be turned. Even some Democrats went along, fearing that without recharter "the country will be ruined...& that there will be no sound currency extant." On June 11, 1832, the bill for recharter passed the Senate by a vote of 28 to 20, and almost a month later, on July 3, it passed the House by 107 to 85. The vote indicated solid support for the Bank in New England and the Middle Atlantic states, strong opposition in the South, and an almost divided opinion in the Northwest and Southwest. Biddle was ecstatic over the vote. "I congratulate our friends most cordially upon this most satisfactory result. Now for the President. My belief is that the President will veto the bill though that is not generally known or believed."
Ill, tired, and debilitated by the hot, sticky Washington weather, Jackson was irritable and cranky when the recharter bill landed on his desk for signature. Martin Van Buren, just returned from England after his rejection by the Senate, came to see the President and found him lying on a sofa in the White House, looking more like a ghost than a man. On seeing his friend for the first time in many months Jackson brightened, then reached out and grasped the Magician's hand. "The bank, Mr. Van Buren, is trying to kill me," he said, "but I will kill it!" His voice, reported by the Red Fox, was entirely devoid of passion, anger, or bluster, but there was no mistaking his mind or mood. He was indeed determined to kill the Bank, not compromise with it, not change its charter and nudge it into the orbit of governmental control, but eliminate it once and for all. What convinced him of this was undoubtedly Biddle's action in seeking recharter at a time, carefully selected, whereby he thought he could tamper with the electoral process to get what he wanted.
Yet, Jackson was too good a politician to miss the danger to his re-election and the election of other Democrats if he vetoed the charter. Politically speaking the moment for battle was all wrong. An election year is no time to disturb the public mind with momentous, quarrelsome issues - not when they are unnecessary and can be avoided. The public is never anxious to settle portentous questions, least of all in an election and certainly not when members of their own party are themselves divided over the issues. The voters bitterly resent being stirred up and having a choice thrust upon them; it agitates and frightens them; and Jackson, by playing into Biddle's hands, was unduly exciting the people and thereby courting electoral disaster. As professional a politician as Silas Wright understood this and told one friend that if the Democrats lost the election it would not be for the want of organization or spirit but because the people "were not equal to the conflict." Still Jackson believed he was acting for the public good in eliminating this extragovernmental "power in the State," that the people would recognize this and that they would sustain him. "Providence has had a hand in bringing forward the subject at this time," he told Kendall, "to preserve the republic from its thraldom and corrupting influence." Thus, certain of popular approval, and convinced of the Bank's evil influence, Jackson made up his mind to write the veto.
The actual writing of the message was the work of several men: Jackson himself, Amos Kendall, Roger B. Taney, Andrew J. Donelson, and Levi Woodbury. What the President wanted was a message that had force and logic and strength to carry it across the nation and convince the people of its fundamental truth. Naturally he needed a closely reasoned paper, but he also desired one that would stir men and reach their minds and hearts, one that could later serve as a propaganda document during the election. His assistants, working three days at fever pitch, did not fail him. What they produced was the most important presidential veto in American history, a powerful and dramatic polemic that can still reach across a century and more of time and excite controversy among those who study it.
In the veto, delivered to the Congree on July 10, the President claimed that the Second Bank of the United States enjoyed exclusive privileges that, for all intents and purposes, gave it a monopoly over foreign and domestic exchange. Worse, some eight millions of the bank's stock was held by foreigners. "By this act the American Republic proposes virtually to make them a present of some millions of dollars," said Jackson - and why should the few, particularly the foreign few, enjoy the special favor of this country. "If our Government," he continued, "must sell monopolies...it is but justice and good policy...to confine our favors to our own fellow citizens, and let each in his turn enjoy an opportunity to profit by our bounty." Over and over, like the intense nationalist he was, Jackson repeated this foreign-influence theme, no doubt striking fire in the hearts of millions of patriotic Americans. Then he turned to the constitutional question involved in recharter. He noted that the Supreme Court in the case McCulloch vs. Maryland had judged the Bank constitutional. "To this conclusion I can not assent," aanounced Jackson. Elaborating, he declared that the Congress and the President as well as the Court "must each for itself be guided by its own opinion of the Constitution. It is as much the duty of the House of Representatives, of the Senate, and of the President to decide upon the constitutionality of any bill or resolution which may be presented to them for passage or approval as it is of the supreme judges when it may be brought before them for judicial decision. The opinion of the judges has no more authority over Congress than the opinion of Congress has over the judges, and on that point the President is independent of both. The authority of the Supreme Court must not, therefore, be permitted to control the Congress or the Executive when acting in their legislative capacities, but to have only such influence as the force of their reasoning may deserve." This is an extraordinary concept. In effect what Jackson said was that no member of the tripartite government can escape his responsibility to consider the constitutionality of all bills and act as his knowledge and good judgmeent dictate. And in this instance, Jackson did not agree with the Court about the Bank. Since the matter was subject to legistlative and executive action, he simply claimed the right to think and act as an independent member of the government.
-Robert V. Remini, Andrew Jackson, 141-151
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