THE BANK AND THE TREASURY
Again in 1832, as in 1828, it had been a man rather than a party that
had won the presidential election. The real issue of the contest had
been the re-election or rejection of General Jackson, upon his record as
President and political leader. Although he took the result as a verdict
against South Carolina, as a verdict against every one who withstood his
authority either as man or as President, the nullification issue had not
been made a test of doctrine or policy by either party. It was passed
by, as if politicians wished to ignore it. So far as it was a contest
concerning policy at all, and not a mere attack of the conservative
forces of the country upon General Jackson himself as a radical and the
author or spokesman of all revolutionary error, the contest centred upon
the question of the Bank. It was the President’s hostility to the United
States Bank that was the Opposition’s chief item of indictment against
him. They attacked him also, it is true, for his unfriendly attitude
towards the protective system and for his unwillingness to allow liberal
outlays to be made for internal improvements. But he had in fact been
more tractable than they had expected in those matters. He had really
suffered Congress to go its own way in adjusting the tariff, and had
yielded now and again to its ardor for spending money out of the federal
treasury for the improvement of harbors and for the prosecution of other
public works which promised to result in a general benefit to commerce.
Only on the question of the Bank had he stood stubborn and forced the
fighting.
[Illustration: THE OLD UNITED STATES BANK, NOW THE CUSTOM HOUSE,
PHILADELPHIA]
The charter of the Bank was not to run out until 1836. It had not been
necessary or wise to force the question of its renewal to an issue in
1832, to be confused with the question of General Jackson’s popularity
and personal prestige. The conservatives in Congress had been betrayed
into a grave tactical blunder, because they shut their eyes to the real
signs of the times. They did not yet know the rules of prudence in a
day of personal politics; did not understand the subtle elements of the
play; did not know the opinion of the country or comprehend the drift of
affairs.
The Bank of the United States had been first created in 1791, and
the question of the right of Congress to establish it had been duly
fought out then, as it were at the very founding of the government.
Both Congress and the Executive had accepted the conclusions of Mr.
Hamilton in the matter, and rejected the conclusions of Mr. Jefferson.
Mr. Jefferson’s party had allowed the charter of the Bank to lapse in
1811, when their day of power came, professing themselves opposed to it
on principle; but in 1816, finding the exigencies of finance powerful
solvents of their scruples, they had changed their minds and had given it
another twenty-year charter. Three years later the Supreme Court of the
United States (_McCulloch vs. Maryland_, 1819) confirmed the reasoning of
Mr. Hamilton with regard to its constitutionality in a formal decision,
and set the views of every scholarly lawyer in the country once for all
at rest on the matter.
But General Jackson had come in “to simplify and purify the workings of
the government, and to carry it back to the times of Mr. Jefferson,—to
promote its economy and efficiency, and to maintain the rights of the
people and of the States in its administration”; and from the outset,
with something of the instinct of the communities in which he had
been bred, he looked upon the Bank as an enemy of constitutional and
democratic government. His attack upon it, begun in his first inaugural
address, had been continued in every annual message he sent to Congress.
He had begun by plainly intimating a doubt as to the legality of its
institution, the Supreme Court to the contrary notwithstanding; and had
asserted that it had failed to establish a stable currency. He next
pronounced it an “un-American monopoly.” Finally he expressed serious
misgivings as to the soundness of its management. At each mention of
it his warmth sensibly increased; his hostility became more open and
aggressive. The purpose apparently grew upon him to destroy it. He forced
it to meet him, as challenger, and fight for its life in the open field
of politics. Influences were at work upon him which were only by degrees
disclosed to his opponents.
The constitution of the Bank unquestionably placed it very near the
government itself. Its capital stock was $35,000,000, and of this
the federal treasury held nearly one-third by direct subscription
($11,000,000); five of its twenty-five directors were appointed by the
President of the United States; it was the depository of the public funds
and enjoyed the use of them without interest; it was empowered to issue
circulating notes to the full par value of its capital stock; and its
notes were made receivable by the United States as cash for all debts.
Congress pledged itself to create no other bank while the charter stood.
In return, the Bank had paid the federal government a million and a
half dollars for its franchise, and undertook to negotiate the loans of
the government without charge or commission. Its notes it was obliged
by law to redeem in specie on demand. Although a private corporation
and carefully planned upon conservative and prudent principles, it was
unquestionably the ruling force in the money market, and took its power
from its connection with the government. Undoubtedly, too, it had been
intended to play this dominating part and was by design a political
institution. It had been Mr. Hamilton’s object, in setting up the first
Bank of the United States, to bring the money transactions of the country
under a central control, to check the experimental banking operations of
the States, and to draw the capitalists of the country and the greater
organizers of industry to the active support of the federal government
upon grounds of interest. The second Bank, now under fire from the
Executive, had been given the same constitution and function.
[Illustration: ALEXANDER H. STEPHENS]
The supporters of the Bank were in a measure justified in claiming
that it was for such a purpose that the very government itself
had been set up. Nothing had more obviously threatened quick and
overwhelming disaster to the country in the days of the Revolution and
the Confederation than the reckless financial operations of the States,
their unlimited issues of irredeemable paper, their piled up promises
and meagre means of redeeming them; and the constitution of the Union
had been framed almost as much to avert ruin from that quarter as to
create a real government, clear up the relationships of the States to
one another, and steady their political action. It absolutely forbade
the States to issue bills of credit, did not give the federal government
itself power to do so, and was meant practically to prohibit the use of
any currency which was not at least based directly upon gold and silver.
But the courts had opened new flood-gates. They had ruled that, although
the States themselves could not legally issue bills of credit, they could
incorporate private banks authorized to issue notes at pleasure, with
or without proper security for their redemption,—could even themselves
invest public moneys in the stock of such banks and become virtual
partners in the irresponsible business. Gold and silver were hard to
get, came within reach of eager borrowers only in the most niggardly
quantities, and could be had only for securities in hand. The adventures
of growth and industry in a new country where everything was making and
to be made demanded easy credit, to be had for the asking, and abundant
money; and had only promises and hopes to offer for security. Banks
of issue sprang up everywhere that there was expectation and sanguine
confidence; and every possible vagary attended their operations. No
man could tell a day’s journey from the bank whose paper he carried
whether it would be accepted and serve him as money or not. Only a
great commanding bank, everywhere known, whose notes really and always
represented gold could supply paper worth its face value in all places or
keep exchanges from chaos.
Such an agency of adjustment and control the Bank of the United States
had proved itself to be. It had not only served its purpose as a fiscal
agent of the government, to the satisfaction of the Treasury, but had
also steadied and facilitated every legitimate business transaction
and rid the money market of its worst dangers. But many of the men to
whom General Jackson was accustomed to listen believed, or affected to
believe, that it had done much more: that its power was used to serve a
party and to keep men who were no friends of the people or of popular
rights in a position to manage and corrupt the whole politics of the
nation. They reasoned out of experience. The state banks were everywhere
notoriously tainted with political partisanship,—were almost everywhere
familiar, recognized engines of party supremacy. No one who was not of
the political majority in the State could get a banking charter from a
state legislature; no one was absolutely sure of credit or indulgence at
a state bank except those who were of the party of its directors. It had
come to be looked upon as a matter of course that banks should be used
as parts of the machinery of political control. General Jackson and his
partisans could not believe that the great Bank of the United States was
free from a similar taint. It had certainly been established by men of
the party which they were now trying in all things to supplant, the men
who had turned away from General Jackson and followed Mr. Clay. It was
part of the old, suspected, aristocratic order which the new democracy
had come in to set aside, and everything that it did was subjected to
suspicion.
The Bank had branches throughout the country, at points of convenience
where business centred. Friends of General Jackson complained that
men openly opposed to them in every party interest were appointed
officers of these branches, even in States which had cast their votes
for General Jackson and the new régime; that loans were refused and
collections insisted on in a way which was offensive to the partisans
of the Administration; and that money was used in the elections against
them. They were particularly indignant that Mr. Jeremiah Mason, an
incorrigible Federalist, had been made president of the branch bank at
Portsmouth, in New Hampshire, and had shown himself disinclined, as they
had expected, to afford friends of General Jackson any unusual indulgence
or accommodation in matters of business. Concrete cases fixed General
Jackson’s convictions in such matters as no argument upon the merits
could fix them. Here was a very tangible example of what he had been led
to suspect. The story came straight from friends whom he trusted,—from
Mr. Levi Woodbury and Mr. Isaac Hill, the two men who had been chiefly
instrumental, he had reason to believe, in winning New Hampshire over
from the Federalist to the Jackson interest. Mr. Hill was editor of the
_New Hampshire Patriot_, and had an editor’s inside view of the politics
he had had so large a share in shaping. He was also one of the officers
of a bank at Concord which was operated under a charter from the State,
and had a state banker’s knowledge of what the branches of the Bank of
the United States could do to dominate credit and control exchanges. Mr.
Woodbury had been chosen a senator of the United States in 1825, and
had from the first been received into the intimate counsels of the new
President. Mr. Hill had left his bank and his paper in New Hampshire to
put himself at the service of the Administration in Washington, and had
become, as everybody knew, a member of the “Kitchen Cabinet.” When such
men told him of the influence of the Bank in New Hampshire, the President
could but believe them. Mr. Kendall brought him the same report of its
influence in Kentucky. It had undoubtedly, he said, spent money there to
secure the success of Mr. Clay and the defeat of General Jackson.
It seemed a significant thing that Jeremiah Mason should have been chosen
for president of the branch bank at Portsmouth. He was unquestionably
the political opponent whom the Jackson leaders in New Hampshire most
feared, and had most reason to fear. His character gave him a very
noble eminence; his extraordinary abilities as a debater and his exact
knowledge as a lawyer gave him an instant hold upon every thoughtful
audience. All the country knew how formidable Mr. Webster was in debate,
and Mr. Webster ascribed no small part of his own power to the lessons he
had learned when pitted against Mr. Mason at the bar.
[Illustration: NICHOLAS BIDDLE]
The President had no mind to let the case go unnoticed. Mr. Ingham, the
Secretary of the Treasury, brought it to the attention of Mr. Biddle,
the President of the Bank of the United States (1829), in a letter in
which he frankly took it for granted that Mr. Mason had been appointed
because of his hostility to General Jackson; plainly intimated that the
whole object of the Bank’s establishment and management had been to
strengthen “the arm of wealth” in order to “counterpoise the influence
of extended suffrage in the disposition of public affairs”; and urged
that the Bank clear itself of the suspicion by drawing its officers
and appointees from both political parties without discrimination. Mr.
Biddle replied with natural indignation. It was easy to refute the
charges made. In the particular case of the branch bank at Portsmouth
the well known character of Mr. Mason made them ridiculous. It could be
shown conclusively enough that, whatever party the officers of the Bank
happened to be chosen from, its affairs were conducted in accordance
with sound principles of business, and with no view to either giving or
withholding favors upon political grounds. Mr. Biddle found no difficulty
in framing a reply which should have convinced all candid men upon the
main points at issue.
He made a grave tactical blunder, none the less, in the tone and method
of his defence. He knew the temper and susceptibilities of the men he
was dealing with and the temper of opinion in the country as little as
Mr. Clay did and the men who stood with Mr. Clay against the President
in Congress. The warmth of Mr. Biddle’s reply to the Secretary, however
natural, was most impolitic; and he did not content himself with
refutation, but went on to utter what seemed little less than a defiance.
He reminded Mr. Ingham that the Bank of the United States, whatever
its business connections with the federal government, was a private
corporation, accountable to no one but its own directors for the conduct
of its affairs. Mr. Ingham responded with a pointed threat. He reminded
Mr. Biddle, in his turn, that the law by which the Bank was incorporated
authorized the Secretary of the Treasury to withdraw the deposits of the
United States when he deemed good cause for the withdrawal to exist.
Mr. Ingham retired from the Treasury upon the reconstruction of the
cabinet which followed the President’s breach with Mr. Calhoun, and Mr.
Louis McLane, of Delaware, took his place (August 8, 1831), a man of
better balance and more liberal spirit, trained in the older school of
politics. In December, 1831, his report to Congress ran strongly and
unmistakably in the Bank’s favor, and it began to look as if the temper
of the Administration had already cooled and altered in the needless
quarrel, which was of its own making. But the friends of the Bank were
not wise enough to let the matter drop. Its charter was safe at least
until 1836, and General Jackson, they might have hoped, would learn the
Bank’s value by experience, should he remain President until then. But
Mr. Clay advised that application be made at once for a renewal of the
charter, while the houses certainly held a majority favorable to it; and
the advice was imprudently taken. The matter was pressed at once, and
in the summer of 1832 (June-July), during the session which immediately
preceded the presidential election, a bill renewing the charter passed
the Senate by a vote of 28 to 20, and the House by a vote of 109 to 76.
It was a direct challenge, and General Jackson of course met it with a
veto, delivered point-blank and without hesitation. The Bank’s majorities
in the houses were not large enough to pass the bill over the veto; and
Clay men and Jackson men alike turned to the country for its verdict.
The folly of staking the fortunes of the Bank against the popularity of
General Jackson at the polls was quickly enough demonstrated. It was
much easier for the mass of men who now held the votes of the country
to believe the Bank a dangerous and corrupt monopoly than to understand
the arguments of statesmen who argued of its services to the government
and to commerce. They recognized General Jackson as a man of their own
instincts, and deemed those instincts a sure enough guide in politics.
Statesmen might approve of the Bank, but the people thought of it only to
suspect it, and preferred General Jackson to all the statesmen the Bank
could muster to its standards. A second time they chose General Jackson
President. He interpreted their votes to mean a deliberate verdict
against the Bank,—a command to destroy it; and its fate was sealed. The
President proceeded with characteristic promptness and directness. He
first turned to Congress (December, 1832), the very Congress which had
passed the vetoed bill, and asked for an investigation, to ascertain
whether it was still safe to leave the deposits of the government with
the Bank, in view of its mismanagement and probable insolvency. No one
but General Jackson and a handful of politicians about him seriously
questioned the good management of the Bank or for a moment doubted its
solvency, even then, with its charter evidently doomed; and the House
very emphatically declared that in its opinion the deposits were safe.
General Jackson, accordingly, determined to act without Congress and on
his own responsibility. He resolved that the Bank should no longer be
given the custody of the public funds.
The statute under which the Bank was incorporated conferred the power to
act in that matter, not upon the President, but upon the Secretary of
the Treasury. The President therefore wrought his will upon the Treasury
Department. Mr. McLane, whom he knew to be favorable to the Bank, he
transferred from the secretaryship of the Treasury to the secretaryship
of State, appointing Mr. Edward Livingston, then Secretary of State,
minister to France, and putting Mr. William J. Duane, of Pennsylvania,
who was known to be an opponent of the Bank, in charge of the Treasury
Department. Mr. Duane showed unexpected scruples, and declined, out of
a mere sense of duty, to make way for the execution of the President’s
radical plan. He was dismissed, therefore, within four months of his
appointment, and the Treasury was put into the hands of Mr. Roger B.
Taney, of Maryland, the Attorney General, whose views the President knew
to be his own (September 23, 1833). An order from Mr. Taney forthwith
directed (September 26) that the revenues thereafter accruing should
be deposited, not with the Bank of the United States, but with certain
state banks selected by the Secretary for the purpose, and that the
balance of the government in the Bank of the United States, then nearly
ten millions, should be drawn upon for the government’s expenses until
exhausted. The thing was done at infinite hazard of financial panic. The
Bank was obliged to curtail its loans very sharply and at once, in order
to bear the drain, which was to be offset by no replenishment; there was
immediate distress in the money market, a sudden flutter of credit; and
only the sound condition of business at the moment prevented crisis and
disaster.
The President spoke of the matter in his annual message with his usual
intrepid frankness: took the whole responsibility for what had been done
upon himself, and justified it. No one whose opinion was of any weight
in such a matter had approved of the removal of the deposits; his own
cabinet had been opposed to it, as both unwise and of doubtful legality,
and had united with Mr. Duane in trying to turn him from his purpose;
but he had gone his way without pause, hesitation, or excitement, like
a man convinced and confident. He believed that the Bank had gone into
politics to prevent his re-election, in 1832 if never before. Its
directors admitted that large sums had been spent out of its funds for
pamphlets, for speeches, for every legitimate means of agitation in the
campaign, which it knew to be a struggle for its life; and the President,
who, with Mr. Clay as ally for the nonce, had forced it thus to meet him
in the field of party action, now declared that the issue had come to
this, “whether the people of the United States were to govern through
representatives chosen by their unbiassed suffrages, or whether the power
and money of a great corporation were to be secretly exerted to influence
their judgment and control their decisions.” He made no scruple of the
law in the case, deeming law meant for the service of the country.
[Illustration: ROGER B. TANEY]
The new House of Representatives, elected in the autumn of 1832, was
now controlled by his friends, and supported him. The Senate, on the
contrary, still stood against him, led, as before, by Mr. Clay, Mr.
Webster, and Mr. Calhoun; and spread upon its minutes a public and formal
censure, in which it earnestly condemned both the dismissal of Mr. Duane
and the removal of the deposits. General Jackson replied in an equally
formal protest, which ran hot and imperious. It spoke his whole theory of
constitutional obligation: his resolution to be bound by neither court
nor senate, nor any precedent whatever, but only by his own conviction
of duty as a representative of the people under the constitution. The
contest was ended. The Bank of the United States quietly made ready for
the expiration of its charter, and when it came (1836) accepted in its
stead a charter from the State of Pennsylvania.
[Illustration: LOUIS McLANE]
But the effect of what the President had done had by no means passed
or spent itself. General Jackson had said that the Bank of the United
States did not give the country a stable currency. The country had an
opportunity to see for itself what service it had rendered when its check
was withdrawn. It was no sooner discredited than the old inflation of
bank issues came again, with wider range and play of destructive force
than ever. The “pet banks,” as they were promptly dubbed, to which the
deposits of the government had been transferred, were selected upon party
principles,—were one and all “Democratic” banks in the South and West,
whose directors were of the President’s party. Their number was fixed by
no law or principle, and began from the outset to be added to from time
to time, as this, that, or the other influence of interest or persuasion
obtained the patronage of the government for banks not at first favored
with a place on the list. State banks saw their day come again. State
legislatures multiplied banking charters without safeguard or limit.
Every bank sought the government’s favors; but none was discouraged
because it did not obtain them. All banks were banks of issue. Those
that did not have the government’s money to lend loaned their own
abundant notes. Paper money seemed to pour of a sudden from every town
and hamlet, and speculation began to heap risk upon risk to make use of
it. The real money centres of the country had little part or lot in the
business. Enterprise ran freest where chiefly compounded of hope,—where
the resources of the country, though unmistakably rich with every promise
of abundant profit, were as yet undeveloped, awaiting the slow processes
of industry. The bubble of credit glistened resplendent with all the hues
of the round globe, until General Jackson himself, in his rough honesty,
pricked it.
The first strain and flurry came by reason of the mere superabundance of
the national revenues. Business had been sound and prosperous until this
new policy which upset the Bank came to disturb it, and the government
had shared the profits of the merchant and the manufacturer. By the
close of the year 1835 it was entirely free from debt. The revenues
which filled its coffers could not be reduced: they came chiefly from
the tariff duties as fixed by the compromise Act of 1833, and that was
a pledge of peace between parties which no man cared to alter. Rather
than keep surplus piling upon surplus, accordingly, Congress ordered
(June, 1836) that on and after the first of the following January all
surplus funds over and above five millions should be distributed, quarter
by quarter, among the several States, as loans without interest which
Congress might at its pleasure recall. Not a few of the pet banks found
themselves considerably embarrassed to meet the drafts upon them by which
the quarterly distributions were made; but the States found speculative
schemes to put the money into quite as readily as individuals did; the
movement of business was not disturbed; and before the year was out
there were no more such disbursements to be feared. Only three quarterly
payments were made,—a total of twenty-eight million dollars. After that
there was no surplus to distribute. General Jackson had pricked the
bubble.
[Illustration: ELECTORAL TICKET OF 1836]
The President had a very sturdy and imperative sense of right and honesty
in all money matters. He believed gold and silver to be “the true
constitutional currency” of the country, he said. He demanded of the pet
banks that they should keep specie enough to cover at least a third of
their circulation, and that they should issue no notes of a lower value
than twenty dollars. He increased the output of the mints and tried by
every means to force coin into circulation. He had no idea of letting the
country try again the fatal experiment of an irredeemable paper currency,
if he could prevent it; and when he saw the fever rising in spite of
him he tried a remedy as drastic and wilful as his destruction of the
Bank of the United States. Speculation and hopeful enterprise had had
an extraordinary effect upon the sale of the public lands. In 1834 the
government had received less than five millions from that source. In 1835
the sum sprang up to more than fourteen millions, and in 1836 to nearly
twenty-five millions; and the money poured in, not, of course, in gold
and silver, but in the depreciated currency of innumerable unknown banks.
The Treasury was forbidden by statute to receive any notes but those of
specie paying banks; but things had by that time already come to such a
pass that no man could certainly or safely distinguish the banks which
really kept a specie reserve from those which only pretended to do so. On
July 11, 1836, accordingly, by the President’s command, a circular issued
from the Treasury directing the land agents of the government to accept
nothing but gold or silver in payment for public lands. Again, as in the
case of the Bank, the President’s advisers drew back and disapproved;
but again he assumed the full authority and responsibility of his
sovereign office, and delivered his blow without hesitation or misgiving.
The effect was to shatter the whole fabric of credit. But the
consequences did not disclose themselves at once. General Jackson had
retired from public life and Mr. Van Buren had succeeded him in the
presidency (March, 1837) before the inevitable day of disaster and
collapse had visibly come. The imperious old man must have looked back
with not a little satisfaction upon the long series of personal triumphs
he had won, against trained statesmen and old parties intrenched against
him. Even in diplomacy his energy and prompt initiative had won him
successes denied to his predecessors. He had sent Mr. McLane to England
to say that all our restrictions upon the carrying trade of England would
be repealed if England would remove those which she had put upon the
carrying trade of the United States in the West Indies; and the ports
which had been shut in the faces of Mr. Gallatin and Mr. Adams were
opened to him, Congress promptly fulfilling his promise with regard to
the action of the United States (May 29, 1830). He pressed upon the new
government of Louis Philippe in France, and upon the other governments
as well which had been at fault in the matter, the claims of the United
States for depredations unlawfully committed upon American commerce
during the Napoleonic wars; and the claims were recognized and paid. He
moved straight and openly upon every object he desired, and his very
directness seemed to add dignity and scope to the government over which
he presided. He had created a party and put subtle revolution into
affairs by sheer force of individual quality, and left his great place
and office before either he or the men who loved and followed him were
aware what mischief he had unwittingly done,—how the whole framework
of settled politics had been shaken and loosened at every joint by his
wilful supremacy.
General Jackson had obliged his followers to accept Mr. Van Buren as his
successor in the presidency: they were dominated by his will in this as
in all things. The convention which nominated Mr. Van Buren had met a
full year and a half before the election (May, 1835), while the power of
the indomitable President was at its mid-term vigor; had been irregularly
made up, its ranks crowded with men who held office under the President;
and signs of faction and revolt had not been wanting. The country had
chosen lukewarmly, too, the man whom the party had named perfunctorily.
His majority in the electoral college had been but 47, as against General
Jackson’s majority of 152 four years before; his popular majority only
26,000, as against General Jackson’s 157,000. The opposition had lacked
unity and organization; hardly constituted a party at all; consisted,
rather, of various groups of several shades of opinion; and put several
candidates into the field: General William Henry Harrison, of Ohio,
Mr. Webster, and Judge Hugh L. White, of Tennessee, for whom Tennessee
voted, General Jackson notwithstanding. But, rank and file, the Democrats
had stood by Mr. Van Buren. In him they acknowledged their debt and
allegiance to General Jackson.
[Illustration: A NORTH CAROLINA MANSION OF THE OLD STYLE]
Not a little strength of character underlay Mr. Van Buren’s bland
exterior, his conciliating manners, his air of sweet accommodation. He
was also, in his way, a consummate master of men. He mastered them by
insight, by intimate and friendly counsel, and by knowing the end he
sought. But he did not rule or dominate by force of will. That slender
little gentleman, always courteous, always placid, always ready to
listen, and wait to have his way, could not hold or rule the imagination
as the rugged veteran did who had preceded him, tall, gaunt, sad-faced,
majestic, carrying fire, gracious and grim by turns. The country regarded
its new, soft-spoken President much as an audience would regard a bland,
mellow-voiced, facile player brought on as understudy to some intense
tragedian; was slow to take him seriously, slow to be convinced that
he had an individuality and a power of his own. He seemed tacitly to
promise in everything that he said that at every point of policy his
administration should be but a continuation of what his predecessor had
begun; and men looked on with curiosity rather than with sympathy, were
more ready to criticise than to applaud.
[Illustration: JOHN CALDWELL CALHOUN]
While Jackson reigned he had seemed rather the maker than the
representative of policy, and the Democratic party had been with
difficulty discernible behind his stalwart figure, standing always at
the front of the stage. Now at last it entered the play, as itself an
independent and originative force in affairs, the President merely one
of its leaders. The revolution wrought in political action by the coming
in of General Jackson had fairly shaken parties asunder. Throughout his
administration they had sought rather than obtained a new order and
cohesion. The “National Republicans,” who had stood with Mr. Adams and
Mr. Clay, had been even when at their strongest something less than a
national party. Adherents had come and gone while the fighting thickened
about General Jackson in Senate and House. When Mr. Van Buren became
President they were still, if separately distinguishable at all, only
the chief group among many groups combined in opposition. The Democrats
were at last a veritable party; Mr. Clay’s friends were only part of a
party. Not until 1834 did the grouped Opposition of which they formed
the centre acquire a party name, or begin to arrange the definite
concerts of party action. By the summer of 1834 they were coming to be
spoken of very generally as “Whigs.” National Republicans; Anti-Masons;
men who thought that South Carolina had been too harshly dealt with,
to the detriment of constitutional state rights; men who condemned
Jackson’s high-handed way in the matter of the deposits, “the immolation
of Duane and the subserviency of Taney”; all who were startled to see
how of a sudden a President had made himself as it were the master of
the government, drew slowly together, and a great party was created.
Insensibly, when power came to it, and the heartening breath of success,
it reproduced the principles and spirit of the Federalists: their liberal
way of interpreting the constitutional powers of the government, their
confident enterprise in pushing forward to new programmes of action and
putting the government at the front of the nation at every step of its
progress, their belief in constructive statesmanship and the efficacy
of legislation in the development and determination of the country’s
life. But for the present it was merely a party of opposition, set over
against the Democrats, who were in charge of the government and yet did
nothing: did nothing, apparently, upon principle. General Jackson had in
fact carried the government back to the principles of Mr. Jefferson, as
his friends had said that he would: had squared its action with those
principles more perfectly a great deal than Mr. Jefferson himself had
done. His intense and aggressive activity in affairs had obscured the
fact while his personal power lasted; but he had spent his telling energy
upon clearing the field of what his predecessors had constructed,—not
upon making but upon setting aside; and he left a party behind him which
had imbibed his spirit: which desired no new era of Federalistic policy;
which wished to see the field kept clear of unnecessary laws and fostered
institutions, of great corporations created for the use of the government
and favored enterprises subsidized in the interest of a class; which
desired to see authority used, not to patronize or foster, but only to
give the government the necessary force and to administer it with a
wise and honest moderation, while all things went their natural course,
unpetted and unhampered.
It faced a crisis with principles negative and opposed to action, and yet
faced it undaunted, advocating only a safe withdrawal of the government
from the field of danger. Within two months after Mr. Van Buren’s
inauguration General Jackson’s “specie circular” had done its work. A
sharp financial crisis racked the business of the country from end to
end, and brought with it a panic stubborn and hopeless, which seemed for
months together as if it had come to stay. It had been strain enough
that the money market had had to accommodate itself to the preparations
of the Bank of the United States for the winding up of its business,
and to the distribution of the surplus among the States. There had been
a rapid increase, besides, in the volume of imports since 1832, and
considerable sums of specie had had to be sent out of the country to
meet the balances of international trade. The specie circular had come
with cruel opportuneness. Bankers and borrowers alike had been reckless;
credit was already out of breath. When the great sums of paper that had
gone west for the purchase of lands from the government came suddenly
back by the hundreds of thousands for redemption there was instant
collapse and panic. Most of the banks had no specie and were utterly
unprepared to redeem their notes; those that had specie could afford no
relief,—had themselves too little to take care of their own notes. There
was a universal suspension of specie payments, and credit was dead at a
stroke. There had been signs enough of what was about to happen before
the end came. A feverish rise in prices had preceded it. The price of
flour, which had been but five dollars in 1834, had shot up to eleven
dollars per barrel during those first uneasy months of 1837; the price of
corn had risen from fifty-three cents per bushel to a dollar and fifteen
cents; and in February and March there had been bread riots in New York.
[Illustration: SILAS WRIGHT, JR.]
On May 15th the President issued a call for an extra session of Congress,
to be convened on the first Monday of September. He had, it turned out,
nothing to propose except that the interests of the government should
be looked to. The pet banks had gone down with the rest, and it was
necessary that the government should secure its revenues. Mr. Van Buren
had no thought of receding from the policy of the specie circular; on the
contrary, he had himself, amidst the very signs of acute and increasing
distress, issued a similar order with regard to the transactions of the
Post Office. He stood stubbornly for specie payments, banks or no banks,
and had aggressive spokesmen at his back in Congress: notably Mr. Wright
and Mr. Benton in the Senate. Mr. Silas Wright, of New York, was the
President’s close friend, in politics and out of it; had been bred in the
same school of politicians; had the same astuteness in policy, and was
yet, like Mr. Van Buren himself, steadfast in the maintenance of such
principles as he saw and believed in. He was of the school of those who
fought for party success and studied the subtle art of party management.
He was no student of principles—a politician of the new day, rather; but
honest and ready to act upon conviction. He believed, as all Democrats
of the new cast did, that the offices of the government belonged to the
majority, as “the spoils of victory”; but he avowed the belief with no
touch of cynicism,—with the naturalness, rather, and unaffected candor
with which a man avows principles he sees no need to be ashamed of; and
he could, with equal naturalness and honesty, now bring forth out of his
singular assortment of motives, as politician and yet as statesman too,
a stern faith in the honesty and necessity of “hard money.” Mr. Benton
was no partisan of the administration: he was too intense an egotist to
be any President’s personal adherent or spokesman. But he, almost alone
amongst public men of experience, had encouraged General Jackson to put
forth the specie order; and he was now ready to give the administration
his hearty support in the maintenance, so far as the government was
concerned, of specie payments.
[Illustration: SAM HOUSTON]
The President and his spokesmen had nothing to propose for the relief
of business. He believed, as Mr. Calhoun did, that palliatives would
only prolong the unavoidable misery of readjustment and the return to
sound methods of business, the substitution of real for fictitious
values and of production for speculation, and that, bad as they were,
things would right themselves more quickly and more wholesomely without
the intervention of legislation than by means of it. His plan was, to
cut once for all the connection of the government with the banks, and
provide for the custody, handling, and disbursement of the revenues by
the Treasury alone. For three years, through two Congresses, he fought
doggedly for his purpose; and won at last in midsummer, 1840. Then he
got exactly what he wanted. An “Independent Treasury Act,” signed July
4, 1840, provided that the Treasury of the United States should itself
supply vaults and places of deposit for the revenues, at Washington and
at other cities appointed for their receipt; that all federal officers
charged with their receipt, safe keeping, or disbursement should be put
under proper and sufficient bonds for their careful and honest use and
custody; and that all payments thereafter made either to or by the United
States should be made in gold or silver only. It had not been possible to
bring the first Congress of Mr. Van Buren’s term to accept this scheme.
Twice adopted by the Senate, now at last Democratic, it had been twice
rejected by the House, where a section of the Democratic majority united
with the Whigs to defeat it. Meanwhile the President had been obliged to
do without law what he wished Congress to authorize by law. The banks of
deposit had suspended payment; there was nothing to be done but to direct
the agents of the Treasury to keep and account for as best they could
the moneys which came into their hands.
[Illustration: CYRUS HALL MCCORMICK]
Meanwhile, too, the country went staggering and bewildered through its
season of bitter ruin. There had been nothing like it before in all the
history of business in America. Utter collapse and despair came, soon
or late, upon every sort of undertaking the year through. Radically
unsound banking laws in the States had been at the bottom of all that had
happened to bring disaster on; and yet no one could reasonably wonder
at the hopes and schemes which had bred that swift and fatal fever of
speculation. Abounding wealth unquestionably awaited the enterprise
and industry which should develop the rich valleys of the West, plant
productive communities there, and unite East and West by road and river;
and means of quick development had at last been found which promised
fulfilment of every dream within a single lifetime,—it might be within
a single decade,—who could tell? It seemed as if, in this very decade
of Jackson’s reign and the new democracy, the world had hit upon ways
of almost instant increase of wealth and power, where resources were
at hand, virgin and inexhaustible. It was then that railways began to
be built and steam boats put upon the rivers; and the great spaces of
the continent began to seem no longer insuperable obstacles to the
growth men had dreamed of and strained after ever since the landing at
Jamestown. Robert Fulton had put a successful steam boat on the Hudson
as long ago as 1807; but until now steam craft had seemed hardly more
than novel conveniences, to be experimented with. Now at last they began
to be built in numbers sufficient to quicken and facilitate enterprise
and settlement. Railways seemed to spring suddenly into existence, to
serve the same end. In 1830 there were but twenty-three miles of rail in
the country: a short road here and there for cars drawn by horses. But
presently steam was brought into use for the propulsion of cars also; and
within five years (1835) no less than thirty million dollars had been
invested in railroads. Before the crisis of 1837 came more than fourteen
hundred miles of railways had been constructed; and by the time Mr. Van
Buren went out of office (1841) there were more than three thousand, the
crisis notwithstanding.
[Illustration: JOHN GREENLEAF WHITTIER]
Invention seemed to awake on every hand, and was not a whit daunted
by the state of the money market. In 1834 Cyrus Hall McCormick had
invented a reaper, to be drawn by horses, which once for all solved and
simplified the problem how the great plains and wide valleys of the West
were to be brought under cultivation by a sparse pioneer population,
where hands were few. In 1836 means were found by which the great
anthracite coal beds of the country could be used in the production
of steam and in the manufacture of iron. Along with the utilization
of the new fuel came the invention of the screw propeller. By 1838
the invention had been fairly perfected, and it had become reasonably
certain that steam craft upon the ocean would draw the continents of the
world together as steam craft upon the rivers and locomotives upon the
railways were uniting East and West in America. In 1839 James Nasmyth, at
Manchester, invented the steam-hammer whose use was presently to increase
so enormously the power and resources of the iron forges from which the
new machinery of conquest and manufacture was pouring forth.
Here were the instruments of industry and of real production upon
which imagination dwelt and speculation based its hopes. Real wealth
was being created apace, and nothing was too extravagant to hope for.
More eager movements of population went with hope and enterprise,
and a very ferment of social and economic change. With the growth of
manufacturing industries came concentration also. Towns began to grow
into cities. Enterprise took on a new magnitude, individual initiative
was a little daunted, and corporations began to be multiplied. Finding
themselves massed in the new undertakings, finding their employers, not
individuals, but groups of men using their combined capital upon a large
scale, workmen and mechanics began to draw together into protective
organizations; and new murmurs against “capital, banks, and monopolies”
disturbed the peace alike of philanthropists and of politicians. The
rural nation which had chosen General Jackson to be its leader began to
be transformed even while he reigned:—most of all in the East, where
industry was chiefly seated, but in the West also, where men of every
section met, and moved with quickened pace towards new objects and new
developments till then not dreamed of. New ambitions stirred everywhere,
and men’s very manners were changed with the new haste and energy that
swept them on.
[Illustration: EDGAR ALLAN POE]
Men’s minds and consciences were stirred, also, by the pungent airs of
the new age. Not in America only, but throughout the whole European
world also of which she was an outlying settlement, the attention of
thinking men was set upon new thoughts in that day of change. The year
1830 had seen political and social revolution sweep to and fro, hardly
to be checked, upon the troubled European stage. England had managed,
as always, to be beforehand with revolution, but only by making many
a radical change in her laws. Between 1828 and 1836 she repealed the
Corporation and Test Acts, removed many of the political disabilities of
Roman Catholics, reformed representation in Parliament, abolished slavery
in her colonies, bettered her system of poor relief, framed a liberal
code for the reconstitution of municipal corporations, and abolished
tithes. In the United States there was none of these things except
slavery to be cleared away. State and federal constitutions alike had
been purged from the first of all that could clog or embarrass progress.
American philanthropists, too, had been beforehand with the rest of
the world in many a work of humanity and mercy. The fame of America’s
reformed penitentiary system had crossed the seas; and in 1831 Alexis de
Tocqueville and Auguste Beaumont had come to the United States to report
upon the system for the information of their government. It was that
visit which gave us de Tocqueville’s inimitable _Democracy in America._
[Illustration: WILLIAM H. PRESCOTT]
The abolition of slavery in the British empire in 1833 brought poignantly
home to some men in the United States the one matter in which America
was behind all the world. It was in 1833 that the American Anti-Slavery
Society was formed, at Philadelphia. Not many connected themselves
with it. Slavery was rooted deep in the whole economy of the South; the
constitution of the Union itself was founded upon arrangements which
took the permanence of slavery for granted; and no man who was not of
hot crusading temper felt inclined to give any countenance to a movement
which might, if pushed far enough, shake the very foundations of the
government. But the few who gave themselves to the agitation were of
crusading temper. Here and there throughout the country, moreover, there
were bodies of men, like the Quakers, whose principles had time out of
mind been of this tenor, and who became at once their natural allies.
Petitions began to pour into Congress praying that it would abolish
slavery in the District of Columbia, prohibit the slave trade there,
and break up the slave trade between the States. John Quincy Adams had
entered the House of Representatives in 1831, only two years after he
left the White House, as a representative of the Anti-Masons and Whigs
of his home. A sturdy and striking figure he made, with all the dignity
and all the contentious strength of his sixty-four years upon him;
and it surprised no one, least of all his constituents at home, that
he championed what he pleased, without respect of parties. It was he
who presented the petitions against slavery and stood mettlesome and
unalarmed amidst the wordy battles they brought on.
It was a deeply hazardous and ominous thing to join issue thus, though
it were only upon a petition here and there, with regard to this central
matter of the whole South’s life. The South still stood unchanged. No
revolution of industry, no breath of speculation, no plotting or building
of railways, no steam craft at her ports or on her rivers touched or
altered her fixed order of society. Some of the first railways built were
built in the South. Her merchants felt the impulse and saw the outlook of
the time as others did. But no power from without, no alteration of the
world beyond her borders, could change her economic and social order so
long as slavery lasted. There was no aristocracy in the South of the kind
men commonly think of when they use the word. There was a ruling race and
a subject race; there were rich men and poor among the race that ruled;
there went with wealth a certain ease and expansiveness of living, a
good deal of quiet leisure, an old-fashioned grace and punctiliousness
of manner which gave to those who cultivated it an air of exclusiveness
and elevation. Young men were apt to be arrogant and to have their fling
in the world of pleasure, and old men showed sometimes a lofty pride of
birth and position. But there was little display. Wealth did not in that
agricultural region mean abundant money, but only full store-houses, a
well stocked stable, an unstinted table, plain comfort, and open-handed
hospitality. In politics the ruling race were as democratic as men of
their kind anywhere. All white men had an equal footing of privilege
there and an equal freedom, though offices fell as often to men of
position whom fortune had put at the front as to men who had made their
way up from the ranks and men who added ambition and initiative to
ability.
[Illustration: RALPH WALDO EMERSON]
Mississippi and Alabama were still new States upon a frontier, and grew
rapidly in population. Georgia, too, added slowly to her population from
decade to decade, adding also to her industries and profiting as she
could by the new forces of the age. But Virginia and the Carolinas grew
scarcely at all. And so the South stood apart, potent and alive and yet
immobile. Though she provoked attack, she was intrenched against it.
It was singular how the signs multiplied of change and a new age coming
in. A whole generation of new writers came suddenly into prominence
during those first years of railways and steam craft (1828-1841):
Hawthorne, Poe, Whittier, Longfellow, Emerson, Lowell, Holmes, Prescott,
Bancroft; Mr. Justice Story and Mr. Justice Kent; Henry Wheaton, Francis
Lieber, Henry C. Carey; John James Audubon and Asa Gray,—men of letters,
law writers, publicists, economists, men of science. Poe and Audubon were
of the South; the rest were of the North, where leisure was coming with
increase of wealth, stimulation of thought with increase of action. “You
are a new era, my man, in your huge country,” wrote Carlyle to Emerson.
In the South writers still bent all their thoughts upon statesmanship
and the control of public policy; read old books and maintained an elder
taste; made cultivation a thing of quiet moments or of the delights
of conversation, and carried it forth into the open arena only as an
instrument of power.
[Illustration: TERRITORIAL CONTROVERSIES OF THE UNITED STATES, SETTLED
BETWEEN 1783-1850
BORMAY & CO., N. Y.]
[Illustration: JAMES RUSSELL LOWELL]
Every change seemed sensibly to increase the sweep and ascendency of
pure democracy and visibly to enhance the power of the general opinion.
By the close of General Jackson’s presidency there was no longer any
property qualification anywhere required in the North for the exercise
of the suffrage except in Connecticut and New Jersey, or anywhere in the
West except in Ohio. The people’s day had come; the people’s eyes were
upon everything, and were used in a temper of criticism and mastery.
Newspapers of a new type sprang up, like the _Sun_ and the _Herald_,
every number of which gave old gentlemen in New York a shock, which
pried into everything and told everything, whether it concerned private
individuals or public events. The upturning General Jackson had brought
upon the government was beginning to come also upon society.
[Illustration: NATHANIEL HAWTHORNE]
How serious the upturning had been in the administration of the
government the country learned while Mr. Van Buren was President; and the
discredit for what General Jackson had done fell upon him. The men whom
General Jackson had put out of office had too often carried away with
them the business methods of their Departments. The men who had succeeded
them, always new and raw at their tasks, were too often incompetent also,
and sometimes showed the cunning and dishonesty of men who seek the
“spoils of office” for their own aggrandizement. It was Mr. Van Buren’s
misfortune that no discovery was made of the jobbery and misfeasance that
had crept into the Departments until he became President. The “spoils”
system, moreover, was commonly believed to have been the bad invention of
his own school of politicians in New York. He attempted no concealments;
no one was shielded or excused when discovery was made; but he got no
credit for that. Everything that came to light was but confirmation
added to the conviction of the country that both he and his party had
best be got rid of. The Whigs were eager to give legislative assistance
to the country in its efforts to rally from the collapse of 1837; the
Democrats offered nothing but the Independent Treasury,—were very fine
and steadfast in their determination to take nothing but “sound” money
into the Treasury, but offered no suggestion as to where the sound money
was to come from, or how business was again to be founded on it.
[Illustration: HENRY W. LONGFELLOW]
The States were left to work that problem out for themselves, if
legislation were needed; and a very wholesome change began. The
legislatures of the States set themselves at last to require real
securities of the banks of issue which they chartered, New York leading
the way; and by slow degrees credit was re-established, panic shaken off.
But the Democrats gained nothing by the circumstance as a national party.
They seemed to have lost initiative when they lost General Jackson.
Mr. Van Buren had handled such diplomatic matters as fell to his
management with prudence and good judgment. A final reckoning with the
Seminole Indians of Florida had been brought to a successful close while
he governed, and a serious boundary dispute with Great Britain had been
accommodated, notwithstanding very distracting complications which had
arisen out of attempts on the part of lawless men in the United States
to assist insurgents who were openly in arms against the English crown
in Canada. But only the irritating details of these matters were talked
about. Nothing large or masterful filled the eye or stirred the general
sympathy either in the President or in the men who spoke and acted for
him in Congress; and the whole country turned to the Whigs for a change.
[Illustration: PRESIDENTIAL TICKET, 1840]
[Illustration: WILLIAM HENRY HARRISON]
The Democrats nominated Mr. Van Buren for a second term and avowed all
their negative principles in a candid platform. The Whigs, now at last
welded into something like a united and aggressive party, nominated
General Harrison, for whom most of them had voted four years before, for
President, and for Vice President Mr. John Tyler, of Virginia. They made
no declaration of principles whatever, but proposed only to oust the
Democrats. The country was willing. General Harrison was the hero of a
well remembered battle in which the redoubtable Tippecanoe, the “Prophet”
of the Indians who hung upon the northwestern frontiers, had been routed,
in 1811, and the western country quieted and made safe. He had himself
been dubbed “Tippecanoe,” and men everywhere were ready to shout very
lustily for “Tippecanoe and Tyler too.” The Democrats had no enthusiasm
with which to match this for the old soldier and honorable gentleman of
the elder type whom their opponents had chosen as their candidate; had
only their dimmed record to speak of; and lost overwhelmingly. General
Harrison, it is true, got but forty-six thousand votes more than Mr.
Van Buren received out of a total of nearly two and a half millions;
but, though his margins were slender, counting by voters, he won in the
electoral college by a majority of one hundred and seventy-four out of a
total of two hundred and ninety-four (234-60). The Whigs saw their day
dawn at last, and the Jacksonian régime was over.
The _authorities_ and _sources_ for the events of this
chapter are the same as those named under Chapter II. The
following special authorities should, however, be added: the
second volume of Albert S. Bolles’s _Financial History of the
United States_; Richard Hildreth’s _Banks, Banking, and Paper
Currency_; William G. Sumner’s _History of American Currency_;
Edward G. Bourne’s _Surplus Revenue of 1837_; Goddard’s _Bank
of the United States_; C. F. Dunbar’s _Laws Relating to
Finance_; Shosuke Sato’s _Land Question_ in the fourth volume
of the _Johns Hopkins Studies in Historical and Political
Science_; and Samuel Tyler’s _Life of Roger B. Taney_.