John Lord - Beacon Lights of History, Volume 12 - American Leaders

McLane was now succeeded in the Treasury department by Mr. Duane of Philadelphia, the firmest and most incorruptible of men, for whom the President felt the greatest respect, but whom he expected to bend to his purposes as he had Ingham. Only the Secretary of the Treasury could remove the deposits, and this Mr. Duane unexpectedly but persistently refused to do. Jackson brought to bear upon him all his powers of persuasion and friendship; Duane still stood firm. Then the President resorted to threats, all to no purpose; at length Duane was dismissed from his office, and Roger B. Taney became Secretary of the Treasury, 23d of September, 1833. Three days afterwards, Taney directed collectors to deposit the public money in certain banks which he designated. It seems singular that the man who two years later was appointed Chief Justice of the Supreme Court, and who discharged the duties of that office so ably and uprightly, should so readily have complied with the President's desire; but this must be accounted for by the facts that in regard to the Bank Taney's views were in harmony with those of Jackson, and that the removal of the deposits, however arbitrary, was not unconstitutional.

The removal of more than nine millions from the Bank within the period of nine months caused it necessarily to curtail its discounts, and a financial panic was the result, which again led to acrimonious debates in Congress, in which Clay took the lead. His opposition exasperated the President in the highest degree. Calhoun equalled Clay in the vehemence of his denunciation, for his hatred of Jackson was greater than his hostility to moneyed corporations. Webster was less irritating, but equally strong in his disapproval. Jackson, in his message of December, 1833, reiterated his charge against the Bank as "a permanent electioneering engine," attempting "to control public opinion through the distresses of some, and the fears of others." The Senate passed resolutions denouncing the high-handed measures of the government, which, however, were afterwards expunged when the Senate had become Democratic. One of the most eloquent passages that Clay ever uttered was his famous apostrophe to Vice President Van Buren when presiding over the Senate, in reference to the financial distress which existed throughout the country, and which, of course, he traced to the removal of the deposits. Deputations of great respectability poured in upon the President from every quarter to induce him to change his policy,–all of which he summarily and rudely dismissed. All that these deputations could get out of him was, "Go to Nicholas Biddle; he has all the money." In 1834, during the second term of Jackson's office, there were committees sent to investigate the affairs of the Bank, who were very cavalierly treated by Biddle, so that their mission failed, amid much derision. He was not dethroned from his financial power until the United States Bank of Pennsylvania–the style under which the United States Bank accepted a State charter in 1836, when its original national charter expired–succumbed to the general crash in 1837.

It is now generally admitted that Jackson's war on the Bank was violent and reckless, although it would be difficult to point out wherein his hostility exceeded constitutional limits. The consequences were most disastrous to the immediate interests of the country, but probably not to its ultimate interests. The substitution of "pet banks" for government deposits led to a great inflation of paper money, followed by a general mania for speculation. When the bubble burst these banks were unable to redeem their notes in gold and silver, and suspended their payments. Then the stringency of the money market equalled the previous inflation. In consequence there were innumerable failures and everything fell in value,–lands, houses, and goods. Such was the general depression and scarcity of money that in many States it was difficult to raise money even to pay necessary taxes. I have somewhere read that in one of the Western States the sheriffs sold at auction a good four-horse wagon for five dollars and fifty cents, two horses for four dollars, and two cows for two dollars. The Western farmers were driven to despair. Such was the general depression that President Van Buren was compelled in 1837 to call an extra session of Congress; nor were the difficulties removed until the celebrated Bankrupt Law was passed in 1840, chiefly through the efforts of Daniel Webster, which virtually wiped out all debts of those who chose to avail themselves of the privilege. What a contrast was the financial state of the country at that time, to what it was when Jackson entered upon his administration!

It is not just to attribute all the commercial disasters which followed the winding up of the old United States Bank to General Jackson, and to the financial schemes of Van Buren. It was the spirit of speculation, fostered by the inflation of paper money by irresponsible banks when the great balance-wheel was stopped, which was the direct cause. The indirect causes of commercial disaster, however, may be attributed to Jackson's war on the Bank. The long fight in Congress to secure a recharter of the Bank, though unsuccessful, was dignified and statesmanlike; but the ungoverned passions displayed by the removal of deposits resulted in nothing, and could have resulted in nothing of advantage to any theory of the Bank's management; and it would be difficult to say who were most to blame for the foolish and undignified crimination and recrimination which followed,–the President, or the hostile Senate. It was, at any rate, a fight in which Jackson won, but which, from the animosities it kindled, brought down his gray hairs in sorrow to the grave. It gave him a doubtful place in the history of the nation.

If Jackson's hostility to the United States Bank was inexpedient and violent, and resulted in financial disasters, his vigorous efforts to put down Nullification were patriotic, and called forth the approval and gratitude of the nation. This was a real service of immense value, and it is probable that no other public man then on the stage could have done this important work so well. Like all Jackson's measures, it was summary and decided.

Nullification grew out of the tariffs which Congress had imposed. The South wanted no protective duties at all; indeed, it wanted absolute free trade, so that planters might obtain the articles which they needed at the smallest possible cost, and sell as much cotton and tobacco as they could with the least delay and embarrassment. Professor Sumner argues that Southern industries either supported the Federal government, or paid tribute to the Northern manufacturers, and that consequently the grievances of the Southern States were natural and just,–that their interests were sacrificed to national interests, as the New England interests had been sacrificed to the national interests at the time of the Embargo. Undoubtedly, the South had cause of complaint, and we cannot wonder at its irritation and opposition to the taxes imposed on all for the protection of American manufactures. On the other hand, it was a grave question whether the interests of the nation at large should be sacrificed to build up the interests of the South,–to say nothing of the great moral issues which underlie all material questions. In other words, in matters of national importance, which should rule? Should the majority yield to the minority, or the minority to the majority? In accordance with the democratic principles on which this government is founded, there is only one reply to the question: The majority must rule. This is the basal stone of all constitutional government, whose disruption would produce revolution and anarchy. It is a bitter and humiliating necessity which compels the intellect, the wealth, the rank, and the fashion of England to yield to the small majority in the House of Commons, in the matter of Irish Home Rule, but an Irishman's vote is as good as that of the son of an English peer. The rule of the majority is the price of political liberty, for which enlightened nations are willing to pay.