Lecture LO II

Learning Objective II

Discuss the function that Jackson saw for himself as President.

Explain how Jackson's leadership strengthened and defined "federalism" in favor of the federal government. Be sure to discuss, the Indian Removal Act, his attack on the Second Bank of the United States and the Nullification Crisis.

The Election of Andrew Jackson

Despite these sectional tensions, the story of America in the early 19th century was one of expansion—expanding economies, expanding territory, and expanding democracy. The man who embraced the spirit of that expansion and to many personified it was Andrew Jackson, who captured the presidency in 182 8.

As President, Jackson favored a formula of state sovereignty, strict construction, and a laissez-faire government because he hoped for a return to old-fashioned, agrarian-oriented Jeffersonianism. On numerous occasions Jackson looked back to the simpler and presumably purer young republic of Jefferson's day and praised it for its virtues. Although the agrarian ideal was already out of date, Jackson, like Jefferson, idealized an agrarian society. He described the agricultural interest as "superior in importance" to all others and the cultivators of the soil as the "...best part of the population. Independent farmers are everywhere the basis of society and true friends ofliberty

Second, Jackson also looked upon himself as the guardian of the people's interest. He felt by reducing the government's role in the economy, it would make it harder for special interest groups to win privileges.

The Election of Andrew Jackson

Despite these sectional tensions, the story of America in the early 19th century was one of expansion—expanding economies, expanding territory, and expanding democracy. The man who embraced the spirit of that expansion and to many personified it was Andrew Jackson, who captured the presidency in 1828.

As President, Jackson favored a formula of state sovereignty, strict construction, and a laissez-faire government because he hoped for a return to old-fashioned, agrarian-oriented Jeffersonianism. On numerous occasions Jackson looked back to the simpler and presumably purer young republic of Jefferson's day and praised it for its virtues. Although the agrarian ideal was already out of date, Jackson, like Jefferson, idealized an agrarian society. He described the agricultural interest as "superior in importance" to all others and the cultivators of the soil as the "...best part of the population. Independent farmers are everywhere the basis of society and true friends of liberty

Second, Jackson also looked upon himself as the guardian of the people's interest. He felt by reducing the government's role in the economy, it would make it harder for special interest groups to win privileges.

"Could it really be urged that the framers of the constitution intended that our Government should become a government of brokers? If so, then the profits of this national brokers' shop must inure to the benefit of the whole and not to a few privileged monied capitalists to the utter rejection of the many." Andrew Jackson

Jackson was not intimidated by congressmen, whose acts he felt were too often controlled by small, selfish groups of powerful constituents, and he used his veto power more freely than all of his predecessors. Nor would he agree that the Supreme Court had the final word on matters of constitutional interpretation; he believed that the President's oath bound him to support the Constitution as he understood it, and not as it was understood by others. This is represented with Jackson's war on the Bank of the United States and his lack of action on behalf of the Cherokee Indians.

THE INDIAN REMOVAL ACT

In 1830 Congress, with the support of Jackson, passed the Indian Removal Act. Under this law, the federal government provided funds to negotiate treaties that would force the Native Americans to move west. Many of the tribes signed removal treaties. However, the Cherokee Nation refused and fought the government in the courts. In 1832, the Supreme Court ruled in Worcester v. Georgia that the state of Georgia could not regulate the Cherokee Nation by law or invade Cherokee lands. However, Jackson refused to abide by the Supreme Court decision, saying, “John Marshall has made his decision; now let him enforce it.”

THE TRAIL OF TEARS

In the years following the Court’s ruling, U.S. troops rounded up the Cherokee and drove them into camps to await the journey west. Beginning in the fall of 1838, the Cherokee were sent off in groups of about 1,000 each on the 800-mile journey, mostly on foot. As winter came, more and more Cherokee died. The Cherokee buried more than a quarter of their people along the Trail of Tears, the forced marches the Cherokee followed from Georgia to the Indian Territory

Views of the Economy and Bank:

As an exponent of laissez-faire, Jackson promised to reduce the government to the simple machine which the Constitution created. This was because Jackson believed that federal intervention in the affairs of the people usually came in the following forms:

(1) special favors to influential minorities or

(2) encouragement to monopolistic corporations.

Jackson realized that there would be distinctions in society

between the abilities of one individual over another; but when laws were undertaken to add to these natural advantages (artificial distinctions which would make the rich richer and the poor poorer), then "the humble members of society--farmers, mechanics, laborers who had neither the time nor the means of securing like favors for themselves"--had a right to complain about the injustices of their government.

Although, reducing the government's role in the economy made it harder for favored groups to win special privileges, it also gave free reign to irresponsible entrepreneurs in a period of frantic economic activity. What the Jacksonian mentality could not foresee was the degree of which, in a growing country, unrestrained enterprise could lead on to new economic combinations, centers of gigantic power largely independent of governmental regulation. But history is forever pursued by irony. Here the ultimate irony would be that the laissez-faire rationale for republican simplicity eventually became the justification for the growth of unregulated centers of economic power far greater than any ever wielded by Biddle's bank.

The Bank Wars

Jackson's most important and controversial use of executive power was his successful attack on the Bank of the United States. The attack demonstrates Jackson's strong prejudices against special interest as well as his contempt for expert advice, even in fields like banking where his ignorance was complete. Furthermore, "The Bank War" revealed some of the deepest concerns of Jackson and his supporters and expressed their concept of democracy in a dramatic way. It also aroused intense opposition to the President and his policies, an opposition that crystallized in a new national party--the Whigs (more on the WHIGS in the lecture "The Development of the Two Party System).

The Second Bank of the United States was a large commercial bank which the federal government had chartered for twenty years in 1816 and partially owned (20% of the bank's stock was owned by the government). The bank had long been embroiled in public controversy. Its role in precipitating the panic of 1819 by suddenly calling in its loans had led many, especially in the South and the West, to blame the bank for the subsequent depression. But, after Nicholas Biddle took over the bank's presidency in 1823, it regained public confidence. The bank's most important role was the stabilization of the nation's money supply. Most American money consisted of notes--in effect, paper

money--that state-charted commercial banks issued with the promise to redeem on demand with gold or silver coins.

Nicholas Biddle

The bank played its stabilizing role by regularly collecting these state bank notes, returning them to the banks that had issued them, and demanding that the banks convert them into gold and silver coins.

With the threat of collection hanging over them, state banks had to be conservative in extending credit in the form of bank notes. As the state banks continued to issue more notes they could redeem at any given time, they were expanding the money supply. BUT, under the discipline imposed by the Second Bank, they had to do so cautiously. During the prosperous 1820s, the Second Bank performed well, maintaining steady, predictable increases in the money supply throughout the nation.

Most people did not understand commercial banking, particularly its capacity to enlarge the money supply through the lending of bank notes. Nor did they appreciate the functions of the Second Bank. It was easy to believe that banking was a nonproductive activity and that bankers earned their profits illegitimately through the exercise of special privilege.

Various interest groups played on popular prejudices for the purpose of killing the Second Bank. Wealthy New York bankers, including supporters of Martin Van Buren, (who would be Jackson's hand-picked successor to the presidency) wanted to see federal deposits in their banks, and some bankers in smaller cities, including Nashville supporters of Jackson, wanted to be free of regulation by the Second Bank.In 1832, Jackson's opponents in Congress, led by Henry Clay and Daniel Webster, united to impose a political trap on Jackson. Knowing that many Democrats in Congress supported the Second Bank, and that Jackson was opposed to it, Clay and Webster hoped to lure Jackson into an unpopular veto just before the 1832 elections.

Consequently, plotted the passage of a bill to-recharter the Bank four years earlier than its original recharter date of 1836 in order to make an election issue out of it. Seeming to fall into the trap, Jackson vetoed the bill. But he accompanied his veto with a powerful message that gained wide circulation. Jackson denounced the Second Bank as a nest of special privilege and of monopoly power that advanced the interests "of the few at the expense of the many," damaging the "humbler members of society--the farmers, the mechanics, and laborers--who have neither the time nor the means of securing like favors to themselves." Finally, Jackson made a connection that was especially damning in patriots' eyes. He emphasized the heavy investment by British aristocrats in the Second Bank.

Jackson's charge that the bank was involved with a number of conflicts of interest contained much truth. Biddle cleverly lent funds where the bank would make influential friends. In 1831 alone, a total of 59 members of Congress borrowed from the Bank. Also, during one period Daniel Webster was a director of the bank, its chief paid counsel, its debtor in the sum of thousands of dollars, and a member of the United States Senate, where he eloquently battled for his employer's interest.

A good public image was attempted by the use of judicious loans made to newspaper editors to ensure "good press." In his veto and subsequent "bank war," Jackson had a better sense of the public's anti-corporate mood than did the supporters of the Bank. His most fervent supporters came from a broad spectrum of people who resisted industrialization. Jackson also won support for his position from some promoters of economic growth, such as state bankers who had originally supported the Second Bank, but now believed its demise would open the way for more speculative investments by their banks.

Thus. he managed to expand his coalition of groups, even though some held diametrically contradictory positions on the value of banking and evenindustrialization. Herein lies the reason for Jackson's political success: his ability to gain the identification and support from a wide spectrum of people with different political beliefs, while at the same time able to capture the support of the emerging urban working class. However, the bank veto stimulated significant organized opposition which culminated in the formation of a new political party, the Whig party

Nullification 

In 1824 and again in 1828, Congress increased the Tariff of 1816. Jackson’s vice-president, John C. Calhoun of South Carolina, called the 1828 tariff a Tariff of Abominations because he blamed it for economic problems in the South. The South’s economy depended on cotton exports. Yet the high tariff on manufactured goods reduced British exports to the United States, and because of this, Britain bought less cotton. With the decline of British goods, the South was now forced to buy the more expensive Northern manufactured goods. From the South’s point of view, the North was getting rich at the expense of the South. text

THE NULLIFICATION CRISIS

To try to free South Carolinians from the tariff, Calhoun developed a theory of nullification. Calhoun’s theory held that the U.S. Constitution was based on a compact among the sovereign states. If the Constitution had been established by 13 sovereign states, he reasoned, then the states must still be sovereign, and each would have the right to determine whether acts of Congress were constitutional. If a state found an act to be unconstitutional, the state could declare the offending law nullified, or inoperative, within its borders. The Senate debated the tariff question (and the underlying states’ rights issue). Senator Daniel Webster of Massachusetts opposed nullification and South Carolina Senator Robert Hayne aired Calhoun’s views.

Jackson's Nullification Crisis

In 1832 the issue of states’ rights was put to a test when Congress raised tariffs again. South Carolinians declared the tariffs of 1828 and 1832 “null, void, and no law.” Then they threatened to secede, or withdraw from the Union, if customs officials tried to collect duties. In response, an outraged Jackson urged Congress to pass the Force Bill to allow the federal government to use the military if state authorities resisted paying proper duties. A bloody confrontation seemed likely until Henry Clay forged a compromise in 1833. Clay proposed a tariff bill that would gradually lower duties over a ten-year period. The compromise also included passage of the Force Bill. The tension between states’ rights and federal authority subsided—temporarily.