Part 2: The Bank Wars
Jackson was from the frontier, a common man that had ascended to the most powerful elected office in the country. He thought that the office of the President was, should be, and shall remain the most powerful office in the United States government. That, to defend the union and preserve its wholeness, a President should be willing to do whatever it takes to hold the team together. Along with this attitude came his fierce desire to fight for every issue the people came to him with; he believed that most presidents had just tried to appeal to the general masses aiming for goals that were achievable and, for the most part, what people wanted. Jackson believed that "he was in the White House to fight the people's battles as the best he could." (Meacham, 121) and if left to the elites they would only fight for the wellbeing of the elites while the common man was left out of the loop. He believed in a strong presidential office, but that did not mean that he believed in a strong central government; two things many people often loop together. He believed in the mandate of the people and the powers that they permitted both him and congress to have was directly responsible for the wellbeing of the people.
The Bank War of 1832 was no less of a fight for Jackson. Although it started as a simple political rivalry, he truly wanted to do the best thing for the country in regards to its economic future and stability.
Henry Clay, the speaker of the House and Jackson’s longtime political opponent, had passed a bill through the House and Senate, renewing the Bank of the United States charter before its first charter even expired. Jackson realized that Clay and the (arrogant) President of the Bank, Nicholas Biddle, were buddies and were making a move for Clay to win the presidency in the 1932 election. Jackson didn't necessarily have a problem with the Bank until he realized who within the bank was best friends, then the Bank was a monster that needed to be killed. He also did not like its potential as a power rival to the presidency, a fact that Biddle did not hide. Jackson would personify the Bank as his own personal enemy, as well as a direct threat and enemy to the people’s liberties claiming that no government institution should have that much control over a country’s economy, favoring certain people over others for economic gain.
The people were also okay with the Bank having an indifferent attitude towards it. It was only when the two leaders made the subject a polarizing issue that they took up opinions. (Howe, 377)
Both Clay and Biddle believed that they could force Jackson to sign the bill when it came across is desk on July 4th but Jackson eloquently defied them and vetoed the bill sending a note with it back to the floor starting with this explanation:
The bill " to modify and continue " the act entitled "An act to incorporate the subscribers to the Bank of the United States " was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it ought not to become a law, I herewith return it to the Senate, in which it originated, with my objections.
(Andrew Jackson, The Avalon Project, Yale Law Library)
Jackson's enemies called Jackson an “authoritarian scoundrel” that was out for the demise of the people’s liberties. The cartoon below shows the kind of attacks that were common in the newspapers during the time. Jackson is depicted as the "King Andrew the First," with the constitution under on foot and the Central Bank Charter under the other, who can do as he pleases with the power of the Presidency.
The cartoon below shows Andrew Jackson and Nicholas Biddle boxing for the prize of the future of the central bank.
The people backed their president and his actions the next November in the 1832 elections by electing Jackson for a second term, crushing Henry Clay. Jackson took his re-election as a sign that he had the permission from the people to once and for all crush the bank.
In May of 1833, Jackson went in for the kill and ordered his Secretary of Treasury, Louis McLane, to withdraw all federal money and deposit them evenly in to state banks leaving the national bank in a state of despair and with no choice but to close. McLane refused warning Jackson that it would cause a serious economic "catastrophe" if the bank were to go down that way; a central bank was an easy way to provide an effective source of credit creating a necessary condition for the economic development of the country as well as performing other "essential financial services, mobilizing capital, providing information to prospective investors about risks and rewards, and facilitating financial transactions." (Howe, 493) For all of that to disappear would create a struggling market down the road. McLane also reminded Jackson that to move any deposited according to the charter he needed the permission of congress. But with Congress not in session he claimed he did not need their authority to move the money.
McLane was conveniently moved to Secretary of State to make room for a more willing Secretary of Treasury, William J. Duane. On Duane's first day in his new post was informed that he would need to withdraw all of the federal money to be deposited into the state banks for the sole purpose of destroying the national bank. He was fine with doing this as long as he had Congress' permission. Again, something Jackson did not have time for. Duane refused to resign and was fired by Jackson that September.
With the congressional session closing in, Jackson needed a Secretary of Treasury that would do what he wanted, no questions asked, and the third time he got what he wanted. Jackson appointed General Roger B. Taney, who did as he was told straight away upon taking up his post. The money was withdrawn from the central bank and deposited into the state banks.
One interesting ally for the destruction of the bank that Jackson did have in his administration was James Alexander Hamilton, who ironically is the son of Alexander Hamilton who fought venomously within George Washington's administration for the establishment central bank.
When Congress did finally go into session the money had been moved and as Congress mobilize for a response to Jackson's actions he pointed to Biddle's economic warfare as the very reason why a central bank was dangerous for America. Regardless, Congress was furious and Jackson was officially censured for violating the constitution and abusing his allotted powers as President.
As time went on, many people admitted that they were more worried about what a guy like Biddle could do with that kind of economic power than what Jackson was doing to the bank ensuring that the bank would stay dead. So in February of 1836, the Bank became a private bank in Pennsylvania.
This whole ordeal, however, would cause the Panic of 1837 (exactly what Jackson's first Secretary of Treasury McLane had warned him about). With Jackson's second term coming to an end, Martin Van Buren would unfairly be the face of blame for the Panic.
Howe, Daniel Walker. What Hath God Wrought: The Transformation of America, 1815-1848. New York: Oxford University Press, 2007.
Jackson, Andrew. President Jackson's Veto Message Regarding the Bank of the United States; July 10, 1832. Avalon Project. Yale Law School, Lillian Goldman Law Library.