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Andrew Jackson Takes on the Banks
Transcript of Andrew Jackson Takes on the Banks
The Age of Jackson
Elections of 1824 & 1828
Brief Overview of the Presidency
The Bank War
The American Economy & Banking
The 2nd BUS
Jackson vs. Biddle
Jackson's policy were disastrous in several ways:
Frenzy of land speculation in western lands
Prices for land become inflated
Jackson stops with order known as Specie Circular
Future purchases of land in hard currency
Bank failures resulted
The Ultimate Result: Panic of 1837, an economic crisis that touches every American (unemployment, food riots, ruination of land speculators, lack of credit)
Champion of the Common Man?
Election of 1824
John Quincy Adams--MA (north)
Andrew Jackson--TN (west)
William Crawford--GA (south)
Henry Clay--KY (west)
Jackson wins the popular vote; no candidate wins majority in Electoral College
Election is then sent to the House of Representatives, where the top 3 candidates are voted on --> Clay is excluded and encourages his supporters to vote for Adams (even though some had been instructed by their state to vote for Jackson)
Adams WINS! (and appoints Henry Clay as Sec. of State)
Called the "corrupt bargain" by Jackson's supporters.
The Election of 1828
Jackson’s campaign was engineered by Senator Martin Van Buren of NY
He wanted to recreate the old Jeffersonian coalition of:
Northern farmers and artisans.
Southern slave owners.
Farmers with small land holdings.
He created the Democratic Party from the remains of Jefferson’s old party:
Created a national committee that oversaw local and state party units.
Mass meetings, parades, picnics.
A lot of political mudslinging on both sides.
Ultimately Jackson is victorious, but at a price...
Inaugural Address: No clear policy statements but did express support of states' rights, economy in government, and revising civil service.
Peggy Eaton (Petticoat) Affair: rumor scandalized the "Cabinet wives" and caused Jackson Administration to stagnate until 1831.
Kitchen Cabinet: Jackson meets with small group of friends for advice instead of holding Cabinet meetings--rooted in distrust of Cabinet from the Petticoat Affair
"Spoils System": political patronage to build party strength--"to the victors belong the spoils"
Tariffs and Veto Power
Tariff of Abominations
1828- “Tariff of Abominations”- Signed into law by President Adams. 50% tax on imported goods
Northeast and West strongly favored a stronger tariff in order to allow the government to pay for internal improvements
Southerners opposed the tariff- it raised prices on imported manufactured goods
Southern economy depended on these imports
Jefferson Day Dinner - 1830 - "Battle of the Toasts"
Attended by leaders of the Democratic Party
Jackson aligns himself with the West and Northeast on the issue of nullification.
Jackson: “Our federal union: it must be preserved.”
Counter-toast by Calhoun: “The Union, next to our liberty, most dear.”
Jackson's use of federal power = VETO
Marysville Road Veto: Jacskon vetoed a 60 mile road in Kentucky on strict constructionist grounds.
Opposed for 2 reasons:
1. road was in a single state
2. felt an amendment was needed for federally subsidized local roads and canals.
May have also helped that Clay, Jackson's rival, was from Kentucky.
2nd BUS was created to stabilize currency after the War of 1812
supported by Clay & Calhoun
2nd BUS's charter was due to expire in 1836
2nd BUS was part of Clay's American System (based on Hamiltonian ideas), which also included high protective tariffs and internal improvements (roads, canals)
Purpose of the BUS was to ensure a strong and stable American economy as well as to promote commerce
HOWEVER, there was the Panic of 1819
directors of the BUS were concerned with "wildcat bank" practices
started when 2nd BUS started to call in loans; forced state banks to follow suit
state bank loans made to land speculators who could not repay => banks FAIL & depositors were wiped out; mortgages were foreclosed upon, agriculture and manufacturing experienced falling prices
American economy did not recover until 1824
Bank then becomes known as "The Monster"
Jackson interprets his overwhelming win as a mandate to proceed against the 2nd BUS
Deposit Removal: Jackson orders federal deposits out of the 2nd BUS and re-deposits them in state banks
called "pet banks" by Jackson's opponents
Clay moves to censure Jackson for exceeding his constitutional authority => both measures pass the Senate (1st censure in US History)
House passed resolutions supporting Jackson's bank policy (Is this evidence of Jackson being an everyman's president?)
2nd BUS charter expires in 1836
2nd BUS goes bankrupt in 1841
Jackson dislikes and distrusts Nicholas Biddle, the director of the 2nd BUS
Biddle represented what Jackson did not like--elitist northern "aristocrats"
also opposed by two banking factions:
"Soft" $ advocates (paper bank notes):
state bankers felt it restrained their banks from issuingbank notes freely.
supported rapid economic growth & speculation.
"Hard" $ advocates (specie):
felt that coin was the only safe currency.
didn’t like any bank that issued bank notes.
suspicious of expansion &speculation.
Jackson questions constitutionality of the bank
VETOES early re-charter in 1832
becomes the leading issue in Jackson's 1832 re-election campaign
1st president from west of the Appalachians
representative of the "common man": from a poor, frontier family & had little formal education
fought in the Revolutionary War as a teen
Military hero at the Battle of New Orleans (War of 1812)
Invaded Florida (against Pres. Monroe's wishes)
First President to have a nickname: Old Hickory (from his actions in FL)
Political Aside 1: Jacksonian Democracy
Part of a strong trend during the early to mid 1800s known as Democratization
Jackson’s Core Beliefs:
People themselves should manage governmental affairs
Reflected an agricultural as well as rising industrial society
Expanded democracy from its political aspects to include social and economic
Purpose of democracy was to provide OPPORTUNITY for those who could vote.
Political Aside 2: Political Democratization
Between 1824 and 1840 there was a sevenfold increase in number of votes cast from 350,000 in 1824 to over 2.4 million in 1840.
Less restrictions on voting qualifications
Changes in political parties and campaign methods
Increases in newspaper circulation
Key Political Changes
Universal Male Suffrage
Party Nominating Conventions
Popular election of the President
Two Party System
Rise of Third Parties
More Elected Officials
Spoils System and Rotation of Officeholders