Alan Axelrod - Complete Idiot’s Guide to American History

Pour the whole thing down the drain.

From 1811, when constitutional challenges prevented the rechartering of the Bank of the United States, until 1816, when it was revived under Monroe, a host of shabby state banks rushed to provide credit to practically all comers. Then, when the war broke out, all the state banks (except for those in New England) suspended the practice of converting paper bank notes to gold or silver (“specie”) on demand. The value of all that paper money so recklessly loaned now plummeted. Banks failed, investors collapsed, businesses went belly up.

Monroe’s Second Bank of the United States stepped in with a plan to stabilize the economy by sharply curtailing credit and insisting on the repayment of existing debts in specie. This plan preserved the Bank of the United States, but it hit the nation hard. “The Bank was saved,” one pundit of the day observed, “but the people were ruined.” In the West and South, individuals were particularly hard hit, and these states passed laws to provide debt relief, but not before 1819, when the panic peaked.

The nation ultimately weathered the Panic of 1819, but it created lasting resentment against the Bank of the United States (called “The Monster” by Missouri Senator Thomas Hart Benton). The panic deepened sectional rivalries, chipping away at the solidarity of the Union. The West and the South mightily resented the economic stranglehold of the Northeast.

The deepening gulf between the northern and southern states gaped its widest in 1818-19. At that point, the United States Senate consisted of 22 Senators from northern states and 22 from southern states. Since the era of the Revolution, the balance between the nonslaveholding North and the slaveholding South had been carefully and precariously preserved with the addition of each state. Now, the territory of Missouri petitioned Congress for admission to the Union as a slaveholding state. The balance threatened suddenly to shift, like a heavy burden on the back of a weary laborer.

Representative James Tallmadge of New York responded to Missouri’s petition by introducing an amendment to the statehood bill calling for a ban on the further introduction of slavery into the state (but persons who were slaves in the present territory would remain slaves after the transition to statehood). The amendment also called for the emancipation of all slaves born in the state when they reached 25 years of age. Thus, gradually, slavery would be eliminated from Missouri. The House passed the Tallmadge amendment, but the Senate rejected it—and then adjourned without reaching a decision on Missouri statehood.

When the Senate reconvened, a long and tortured debate began. Northern Senators held that Congress bad the right to ban slavery in new states, whereas the Southerners asserted that new states had the same right as the original 13, to determine whether they would allow slavery or not. Not until March 1820 was a complex compromise reached on this issue, which, in reality, could admit of no satisfactory compromise. Missouri, it was agreed, would be allowed to join the Union as a slave state, but simultaneously, Maine (hitherto a part of Massachusetts) would be admitted as a free state. By this means, the slave state/free state balance was maintained.

Then, looking toward the future, the Missouri Compromise provided that a line would be drawn across the Louisiana Territory at a latitude of 36 Degrees 30’. North of this line, slavery would be forever banned, except in the case of Missouri. Nobody was really pleased with the Missouri Compromise, but it did manage to hold together the increasingly fragile Union for another three decades.

The single strongest candidate in the presidential election of 1824 was Andrew Jackson (1767-1845), “Old Hickory,” “The Hero of New Orleans,” the candidate of the people. However, Jackson did not win the election. As the facade of the Era of Good Feelings crumbled away, no party had replaced the Federalists to oppose the Democratic-Republicans. Within the Democratic-Republican camp, however, a host of candidates emerged, each reflecting deep regional divisions. The Tennessee and Pennsylvania state legislatures nominated Jackson, Kentucky nominated Henry Clay, Massachusetts nominated John Quincy Adams, and Congress presented William H. Crawford.

In the subsequent election, Jackson received 99 electoral votes, Adams 84, Crawford 41, and Clay 37. Because none of the candidates had a majority, the election was sent to the House of Representatives to choose from among the top three. Illness forced Crawford out of the running, and the choice was between Adams and Jackson. Because Adams had supported the American System, Henry Clay threw his support in Congress behind him. The House voted Adams into office over Jackson, who had received the greater number of electoral votes. Charging that a corrupt bargain had been made, Jackson’s supporters split from the Democratic-Republican party and became Democrats. Supporters who remained loyal to Clay were known as National Republicans.

Adams bad a tough time as a “minority president,” but he nevertheless boldly submitted a nationally based program to a Congress and a public that had become increasingly splintered into regional and other special interests. Adams’s support of canals and other internal improvements, his call for the establishment of a national university, and his advocacy of scientific explorations—all for the common, national good—were largely rejected by Congress. Instead, Congress focused on laissez-faire expansionism and frontier individualism. This attitude, which prevailed through the nation, swept Jackson into office in 1828.

Jackson, seventh president of the United States, was the first who had not been born in patrician Virginia or New England. Although he was, in fact, a wealthy man who lived in a magnificent mansion, the Hermitage, outside of Nashville, Tennessee, Jackson was also a self-made son of the Carolina back country. By the political geography of the day, he was a “westerner.”

There can be no doubt that Andrew Jackson’s two terms as president-from 1829 to 1837-brought a greater degree of democracy to American government. Jackson’s contemporaries, as well as subsequent generations of historians, have debated whether the kind of democracy his administration fostered was always a good thing. During the Jackson years, most states abandoned property ownership as a prerequisite for the right to vote. This move broadened the electorate and made elected officials act in a way that was more fully representative of the people who had put them in office. While this transformation nurtured democracy, it also encouraged demagoguery.

Although Jackson introduced a policy of equitable rotation in federal jobs—the forerunner of the modern civil service system—he also brought with him the so-called “spoils system,” boldly rewarding his supporters with lucrative and secure government jobs (known today as political patronage). Jackson also engineered the defeat of a program of internal improvements that was sponsored by Henry Clay and John Quincy Adams. Jackson argued that the plan favored the wealthy; yet, in defeating it, he retarded the development of commerce in the West—the very territory of his constituency. A believer in the paramount importance of preserving the Union, Jackson worked vigorously to silence the growing abolitionist movement, fearing that those who wanted to end slavery would tear the nation apart.

Jackson reserved his strongest venom for the Second Bank of the United States. Never persuaded of the bank’s constitutionality, Jackson was also acutely aware that his supporters hated the institution. When the bank’s charter came up for renewal, Jackson opposed it, vetoing a recharter bill. After winning reelection in 1832, he issued an executive order withdrawing all federal deposits from the bank. That was a fatal blow, and the bank fizzled, finally closing its doors when its charter expired in 1836. With the demise of the Second. Bank of the United States, credit became more plentiful, and westward settlement proceeded more rapidly. But for the rest of the 19th century, the American economy—especially in the rough-and-tumble West-was doomed to a punishing roller-coaster ride, repeatedly rising to “boom” only to plummet to “bust.”