THE CHILDREN'S TEETH ARE SET ON EDGE.
In his dealings with the Bank and his disposal of the deposits Jackson
ate sour grapes to his heart's content; and now the teeth of his adopted
child Van Buren were to be set on edge.
Van Buren was the first product of what are now called "machine
politics" that was put into the presidential chair. He owed his
elevation solely to his own dexterous political manipulation, and to the
fact that, for his own selfish ends, and knowing perfectly well their
folly, he had yet favored or connived at all the actions into which the
administration had been led either through Jackson's ignorance and
violence, or by the crafty unscrupulousness and limited knowledge of the
Kitchen Cabinet. The people at large would never have thought of him for
president of their own accord; but he had become Jackson's political
legatee, partly because he had personally endeared himself to the
latter, and partly because the politicians felt that he was a man whom
they could trust. The Jacksonian Democracy was already completely ruled
by a machine, of which the most important cogs were the countless
office-holders, whom the spoils system had already converted into a band
of well-drilled political mercenaries. A political machine can only be
brought to a state of high perfection in a party containing very many
ignorant and uneducated voters; and the Jacksonian Democracy held in its
ranks the mass of the ignorance of the country. Besides this such an
organization requires, in order that it may do its most effective work,
to have as its leader and figure-head a man who really has a great hold
on the people at large, and who yet can be managed by such politicians
as possess the requisite adroitness; and Jackson fulfilled both these
conditions. The famous Kitchen Cabinet was so called because its members
held no official positions, and yet were known to have Jackson more
under their influence than was the case with his nominal advisers. They
stood as the first representatives of a type common enough afterwards,
and of which Thurlow Weed was perhaps the best example. They were men
who held no public position, and yet devoted their whole time to
politics, and pulled the strings in obedience to which the apparent
public leaders moved.
Jackson liked Van Buren because the latter had served him both
personally and politically--indeed Jackson was incapable of
distinguishing between a political and a personal service. This liking,
however, would not alone have advanced Van Buren's interests, if the
latter, who was himself a master in the New York state machine, had not
also succeeded in enlisting the good-will and self-interest of the
members of the Kitchen Cabinet and the other intimate advisers of the
president. These first got Jackson himself thoroughly committed to Van
Buren, and then used his name and enormous influence with the masses,
coupled with their own mastery of machine methods, to bring about the
New Yorker's nomination. In both these moves they had been helped, and
Van Buren's chances had been immensely improved, by an incident that had
seemed at the time very unfortunate for the latter. When he was
secretary of state, in carrying on negotiations with Great Britain
relative to the West India trade, he had so far forgotten what was due
to the dignity of the nation as to allude disparagingly, while thus
communicating with a foreign power, to the course pursued by the
previous administration. This extension of party lines into our
foreign diplomacy was discreditable to the whole country. The
anti-administration men bitterly resented it, and emphasized their
resentment by rejecting the nomination of Van Buren when Jackson wished
to make him minister to England. Their action was perfectly proper, and
Van Buren, by right, should have suffered for his undignified and
unpatriotic conduct. But instead of this, and in accordance with the
eternal unfitness of things, what really happened was that his rejection
by the Senate actually helped him; for Jackson promptly made the quarrel
his own, and the masses blindly followed their idol. Benton exultingly
and truthfully said that the president's foes had succeeded in breaking
a minister only to make a president.
Van Buren faithfully served the mammon of unrighteousness, both in his
own state and, later on, at Washington; and he had his reward, for he
was advanced to the highest offices in the gift of the nation. He had no
reason to blame his own conduct for his final downfall; he got just as
far along as he could possibly get; he succeeded because of, and not in
spite of, his moral shortcomings; if he had always governed his actions
by a high moral standard he would probably never have been heard of.
Still, there is some comfort in reflecting that, exactly as he was made
president for no virtue of his own, but simply on account of being
Jackson's heir, so he was turned out of the office, not for personal
failure, but because he was taken as scapegoat, and had the sins of his
political fathers visited on his own head.
The opposition to the election of Van Buren was very much disorganized,
the Whig party not yet having solidified,--indeed it always remained a
somewhat fluid body. The election did not have the slightest sectional
significance, slavery not entering into it, and both Northern and
Southern States voting without the least reference to the geographical
belongings of the candidates. He was the last true Jacksonian
Democrat--Union Democrat--who became president; the South Carolina
separatists and many of their fellows refused to vote for him. The
Democrats who came after him, on the contrary, all had leanings to the
separatist element which so soon obtained absolute control of the party,
to the fierce indignation of men like Benton, Houston, and the other old
Jacksonians, whose sincere devotion to the Union will always entitle
them to the gratitude of every true American. As far as slavery was
concerned, however, the Southerners had hitherto had nothing whatever to
complain of in Van Buren's attitude. He was careful to inform them in
his inaugural address that he would not sanction any attempt to
interfere with the institution, whether by abolishing it in the
District of Columbia or in any other way distasteful to the South. He
also expressed a general hope that he would be able throughout to follow
in the footsteps of Jackson.
He had hardly been elected before the ruinous financial policy to which
he had been party, but of which the effects, it must in justice be said,
were aggravated by many of the actions of the Whigs, began to bear fruit
after its kind. The use made of the surplus was bad enough, but the
withdrawal of the United States deposits from one responsible bank and
their distribution among scores of others, many of which were in the
most rickety condition, was a step better calculated than any other to
bring about a financial crash. It gave a stimulus to extravagance, and
evoked the wildest spirit of speculation that the country had yet seen.
The local banks, to whom the custody of the public moneys had been
intrusted, used them as funds which they and their customers could
hazard for the chance of gain; and the gambling spirit, always existent
in the American mercantile community, was galvanized into furious life.
The public dues were payable in the paper of these deposit banks and of
the countless others that were even more irresponsible. The deposit
banks thus became filled up with a motley mass of more or less worthless
bank paper, which thus formed the "surplus," of which the distribution
had caused Congress so much worry. Their condition was desperate, as
they had been managed with the most reckless disregard for the morrow.
Many of them had hardly kept as much specie in hand as would amount to
one fiftieth of the aggregate of their deposits and other immediate
liabilities.
The people themselves were of course primarily responsible for the then
existing state of affairs; but the government had done all in its power
to make matters worse. Panics were certain to occur more or less often
in so speculative and venturesome a mercantile community, where there
was such heedless trust in the future and such recklessness in the use
of credit. But the government, by its actions, immensely increased the
severity of this particular panic, and became the prime factor in
precipitating its advent. Benton tried to throw the blame mainly on the
bankers and politicians, who, he alleged, had formed an alliance for the
overthrow of the administration; but he made the plea more
half-heartedly than usual, and probably in his secret soul acknowledged
its puerility.
The mass of the people were still happy in the belief that all things
were working well, and that their show of unexampled prosperity and
business activity denoted a permanent and healthy condition. Yet all the
signs pointed to a general collapse at no distant date; an era of
general bank suspensions, of depreciated currency, and of insolvency of
the federal treasury was at hand. No one but Benton, however, seemed
able to read the signs aright, and his foreboding utterances were
laughed at or treated with scorn by his fellow statesmen. He recalled
the memory of the times of 1818-19, when the treasury reports of one
year showed a superfluity of revenue of which there was no want, and
those of the next showed a deficit which required to be relieved by a
loan; and he foretold an infinitely worse result from the inflation of
the paper system, saying:--
Are we not at this moment, and from the same cause, realizing the
first part--the elusive and treacherous part--of this picture? and
must not the other, the sad and real sequel, speedily follow? The
day of revulsion in its effects may be more or less disastrous; but
come it must. The present bloat in the paper system cannot continue;
violent contraction must follow enormous expansion; a scene of
distress and suffering must ensue--to come of itself out of the
present state of things, without being stimulated and helped on by
our unwise legislation.... _I_ am one of those who _promised_ gold,
not paper; _I did not join in putting down the Bank of the United_
_States to put up a wilderness of local banks. I did not join in
putting down the currency of a national bank to put up a national
paper currency of a thousand local banks._ I did not strike Caesar to
make Antony master of Rome.
These last sentences referred to the passage of the act repealing the
specie circular and making the notes of the banks receivable in payment
of federal dues. The act was most mischievous, and Benton's criticisms
both of it and of the great Whig senator who pressed it were perfectly
just; but they apply with quite as much weight to Jackson's dealings
with the deposits, which Benton had defended.
Benton foresaw the coming of the panic so clearly, and was so
particularly uneasy about the immediate effects upon the governmental
treasury, that he not only spoke publicly on the matter in the Senate,
but even broached the subject in the course of a private conversation
with the president-elect, to get him to try to make what preparations he
could. Van Buren, cool, skillful, and far-sighted politician though he
was, on this occasion showed that he was infected with the common
delusion as to the solidity of the country's business prosperity. He was
very friendly with Benton, and was trying to get him to take a position
in his cabinet, which the latter refused, preferring service in the
Senate; but now he listened with scant courtesy to the warning, and
paid no heed to it. Benton, an intensely proud man, would not speak
again; and everything went on as before. The law distributing the
surplus among the states began to take effect; under its operations
drafts for millions of dollars were made on the banks containing the
deposits, and these banks, already sinking, were utterly unable to honor
them. It would have been impossible, under any circumstances, for the
president to ward off the blow, but he might at least, by a little
forethought and preparation, have saved the government from some galling
humiliations. Had Benton's advice been followed, the moneys called for
by the appropriation acts might have been drawn from the banks, and the
disbursing officers might have been prevented from depositing in them
the sums which they drew from the treasury to provide for their ordinary
expenses; thus the government would have been spared the disgrace of
being obliged to stop the actual daily payments to the public servants;
and the nation would not have seen such a spectacle as its rulers
presented when they had not a dollar with which to pay even a day
laborer, while at the same time a law was standing on the statute-book
providing for the distribution of forty millions of nominal surplus.
No effort was made to stave off even so much of the impending disaster
as was at that late date preventable; and a few days after Van Buren's
inauguration the country was in the throes of the worst and most
widespread financial panic it has ever seen. The distress was fairly
appalling both in its intensity and in its universal distribution. All
the banks stopped payment, and bankruptcy was universal. Bank paper
depreciated with frightful rapidity, especially in the West; specie
increased in value so that all the coin in the country, down to the
lowest denomination, was almost immediately taken out of circulation,
being either hoarded, or gathered for shipment abroad as bullion. For
small change every kind of device was made use of,--tokens, bank-bills
for a few cents each, or brass and iron counters.
Benton and others pretended to believe that the panic was the result of
a deep-laid plot on the part of the rich classes, who controlled the
banks, to excite popular hostility against the Jacksonian Democracy, on
account of the caste antagonism which these same richer classes were
supposed to feel towards the much-vaunted "party of the people;" and as
Benton's mental vision was singularly warped in regard to some subjects,
it is possible that the belief was not altogether a pretense. It is
entirely unnecessary now seriously to discuss the proposition that it
would be possible to drag the commercial classes into so widespread and
profoundly secret a conspiracy, with such a vague end in view, and with
the certainty that they themselves would be, from a business
stand-point, the main sufferers.
The efforts made by Benton and the other Jacksonians to stem the tide of
public feeling and direct it through the well-worn channel of suspicious
fear of, and anger at, the banks, as the true authors of the general
wretchedness, were unavailing; the stream swelled into a torrent and ran
like a mill-race in the opposite way. The popular clamor against the
administration was deafening; and if much of it was based on good
grounds, much of it was also unreasonable. But a very few years before
the Jacksonians had appealed to a senseless public dislike of the
so-called "money power," in order to help themselves to victory; and now
they had the chagrin of seeing an only less irrational outcry raised
against themselves in turn, and used to oust them from their places,
with the same effectiveness which had previously attended their own
frothy and loud-mouthed declamations. The people were more than ready to
listen to any one who could point out, or pretend to point out, the
authors of, and the reasons for, the calamities that had befallen them.
Their condition was pitiable; and this was especially true in the newer
and Western states, where in many places there was absolutely no money
at all in circulation, even the men of means not being able to get
enough coin or its equivalent to make the most ordinary purchases. Trade
was at a complete stand-still; laborers were thrown out of employment
and left almost starving; farmers, merchants, mechanics, craftsmen of
every sort,--all alike were in the direst distress. They naturally, in
seeking relief, turned to the government, it being almost always the
case that the existing administration receives more credit if the
country is prosperous, and greater blame if it is not, than in either
case it is rightfully entitled to. The Democracy was now held to strict
reckoning, not only for some of its numerous real sins but also for a
good many imaginary ones; and the change in the political aspect of many
of the commonwealths was astounding. Jackson's own home State of
Tennessee became strongly Whig; and Van Buren had the mortification of
seeing New York follow suit; two stinging blows to the president and the
ex-president. The distress was a godsend to the Whig politicians. They
fairly raved in their anger against the administration, and denounced
all its acts, good and bad alike, with fluent and incoherent
impartiality. Indeed, in their speeches, and in the petitions which they
circulated and then sent to the president, they used language that was
to the last degree absurd in its violence and exaggeration, and drew
descriptions of the iniquities of the rulers of the country which were
so overwrought as to be merely ridiculous. The speeches about the panic,
and in reference to the proposed laws to alleviate it, were remarkable
for their inflation, even in that age of windy oratory.
Van Buren, Benton, and their associates stood bravely up against the
storm of indignation which swept over the whole country, and lost
neither head nor nerve. They needed both to extricate themselves with
any credit from the position in which they were placed. In deference to
the urgent wish of almost all the people an extra session of Congress
was called especially to deal with the panic. Van Buren's message to
this body was a really statesmanlike document, going exhaustively into
the subject of the national finances. The Democrats still held the
majority in both houses, but there was so large a floating vote, and the
margins were so narrow, as to make the administration feel that its hold
was precarious.
The first thing to be done was to provide for the immediate wants of
the government, which had not enough money to pay even its most
necessary running expenses. To make this temporary provision two plans
were proposed. The fourth instalment of the surplus--ten millions--was
due to the states. As there was really no surplus, but a deficit
instead, it was proposed to repeal the deposit law so far as it affected
their fourth payment; and treasury notes were to be issued to provide
for immediate and pressing needs.
The Whigs frantically attacked the president's proposals, and held him
and his party accountable for all the evils of the panic; and in truth
it was right enough to hold them so accountable for part; but, after
all, the harm was largely due to causes existing throughout the
civilized world, and especially to the speculative folly rife among the
whole American people. But it is always an easy and a comfortable thing
to hold others responsible for what is primarily our own fault.
Benton did not believe, as a matter of principle, in the issue of
treasury notes, but supported the bill for that purpose on account of
the sore straits the administration was in, and its dire need of
assistance from any source. He treated it as a disagreeable but
temporary makeshift, only allowable on the ground of the sternest and
most grinding necessity, He stated that he supported the issue only
because the treasury notes were made out in such a form that they could
not become currency; they were merely loan notes. Their chief
characteristic was that they bore interest; they were transferable only
by indorsement; were payable at a fixed time; were not reissuable, nor
of small denominations; and were to be canceled when paid. Such being
the case he favored their issue, but expressly stated that he only did
so on account of the urgency of the governmental wants; and that he
disapproved of any such issue until the ordinary resources of taxes and
loans had been tried to the utmost and failed. "I distrust, dislike, and
would fain eschew this treasury-note resource; I prefer the direct loans
of 1820-21. I could only bring myself to support this present measure
when it was urged that there was not time to carry a loan through in its
forms; nor even then would I consent to it until every feature of a
currency character had been eradicated from the bill."
A sharp struggle took place over the bill brought in by the friends of
the administration and advocated by Benton, to repeal the obligation to
deposit the fourth instalment of the surplus with the states. This
scheme of a distribution, thinly disguised under the name of deposit to
soothe the feelings of Calhoun and the other strict constructionist
pundits, had worked nothing but mischief from the start; and now that
there was no surplus to distribute, it would seem incredible that there
should have been opposition to its partial repeal. Yet Webster, Clay,
and their followers strenuously opposed even such repeal. It is possible
that their motives were honest, but much more probable that they were
actuated by partisan hostility to the administration, or that they
believed they would increase their own popularity by favoring a plan
that seemingly distributed money as a gift among the states. The bill
was finally amended so as to make it imperative to pay this fourth
instalment in a couple of years; yet it was not then paid, since on the
date appointed the national treasury was bankrupt and the states could
therefore never get the money,--which was the only satisfactory incident
in the whole proceeding. The financial theories of Jackson and Benton
were crude and vicious, it is true, but Webster, Clay, and most other
public men of the day seem to have held ideas on the subject that were
almost, if not quite, as mischievous.
The great financial measures advocated by the administration of Van
Buren, and championed with especial zeal by Benton, were those providing
for an independent treasury and for hard-money payments; that is,
providing that the government should receive nothing but gold and silver
for its revenues, and that this gold and silver should be kept by its
own officers in real, not constructive, treasuries,--in strong
buildings, with special officers to hold the keys. The treasury was to
be at Washington, with branches or sub-treasuries at the principal
points of collection and disbursement.
These measures, if successful, meant that there would be a total
separation of the federal government from all banks; in the political
language of the times they became known as those for the divorce of bank
and state. Hitherto the local banks chosen by Jackson to receive the
deposits had been actively hostile to Biddle's great bank and to its
friends; but self-interest now united them all in violent opposition to
the new scheme. Webster, Clay, and the Whigs generally fought it
bitterly in the Senate; but Calhoun now left his recent allies and
joined with Benton in securing its passage. However, it was for the time
being defeated in the House of Representatives. Most of the opposition
to it was characterized by sheer loud-mouthed demagogy--cries that the
government was too aristocratic to accept the money that was thought
good enough for the people, and similar claptrap. Benton made a very
earnest plea for hard money, and especially denounced the doctrine that
it was the government's duty to interfere in any way in private
business; for, as usual in times of general distress, a good many people
had a vague idea that in some way the government ought to step in and
relieve them from the consequences of their own folly.
Meanwhile the banks had been endeavoring to resume specie payment. Those
of New York had taken steps in that direction but little more than three
months after the suspension. Their weaker Western neighbors, however,
were not yet in condition to follow suit; and the great bank at
Philadelphia also at first refused to come in with them. But the New
York banks persisted in their purpose, resumed payment a year after they
had suspended, and eventually the others had to fall into line; the
reluctance to do so being of course attributed by Benton to "the
factious and wicked machinations" of a "powerful combined political and
moneyed confederation"--a shadowy and spectral creation of vivid
Jacksonian imaginations, in the existence of which he persisted in
believing.
Clay, always active as the friend of the banks, introduced a resolution,
nominally to quicken the approach of resumption, but really to help out
precisely those weak banks which did not deserve help, making the notes
of the resuming banks receivable in payment of all dues to the federal
government. This was offered after the banks of New York had resumed,
and when all the other solvent banks were on the point of resuming also;
so its nominal purpose was already accomplished, as Benton, in a caustic
speech, pointed out. He then tore the resolution to shreds, showing that
it would be of especial benefit to the insolvent and unsound banks, and
would insure a repetition of the worst evils under which the country was
already suffering. He made it clear that the proposition practically was
to force the government to receive paper promises to pay from banks that
were certain to fail, and therefore to force the government in turn to
pay out this worthless paper to its honest creditors. Benton's speech
was an excellent one, and Clay's resolution was defeated.
All through this bank controversy, and the other controversies relating
to it, Benton took the leading part, as mouthpiece of the
administration. He heartily supported the suggestion of the president,
that a stringent bankrupt law against the banks should be passed.
Webster stood out as the principal opponent of this measure, basing his
objections mainly upon constitutional grounds; that is, questioning the
right, rather than the expediency, of the proposed remedy. Benton
answered him at length in a speech showing an immense amount of careful
and painstaking study and a wide range of historical reading and legal
knowledge; he replied point by point, and more than held his own with
his great antagonist. His speech was an exhaustive study of the history
and scope of bankruptcy laws against corporations. Benton's capacity for
work was at all times immense; he delighted in it for its own sake, and
took a most justifiable pride in his wide reading, and especially in his
full acquaintance with history, both ancient and modern. He was very
fond of illustrating his speeches on American affairs with continual
allusions and references to events in foreign countries or in old times,
which he considered to be more or less parallel to those he was
discussing; and indeed he often dragged in these comparisons when there
was no particular need for such a display of his knowledge. He could
fairly be called a learned man, for he had studied very many subjects
deeply and thoroughly; and though he was too self-conscious and pompous
in his utterances not to incur more than the suspicion of pedantry, yet
the fact remains that hardly any other man has ever sat in the Senate
whose range of information was as wide as his.
He made another powerful and carefully wrought speech in favor of what
he called the act to provide for the divorce of bank and state. This
bill, as finally drawn, consisted of two distinct parts, one portion
making provision for the keeping of the public moneys in an independent
treasury, and the other for the hard-money currency, which was all that
the government was to accept in payment of revenue dues. This last
provision, however, was struck out, and the bill thereby lost the
support of Calhoun, who, with Webster, Clay, and the other Whigs, voted
against it; but, mainly through Benton's efforts, it passed the Senate,
although by a very slender majority. Benton, in his speech, dwelt with
especial admiration on the working of the monetary system of France, and
held it up as well worthy to be copied by us. Most of the points he made
were certainly good ones, although he overestimated the beneficent
results that would spring from the adoption of the proposed system,
believing that it would put an end for the future to all panics and
commercial convulsions. In reality it would have removed only one of the
many causes which go to produce the latter, leaving the others free to
work as before; the people at large, not the government, were mainly to
blame, and even with them it was in some respects their misfortune as
much as their fault. Benton's error, however, was natural; like most
other men he was unable fully to realize that hardly any phenomenon,
even the most simple, can be said to spring from one cause only, and not
from a complex and interwoven tissue of causation--and a panic is one of
the least simple and most complex of mercantile phenomena. Benton's
deep-rooted distrust of and hostility to such banking as then existed in
the United States certainly had good grounds for existence.
This distrust was shown again when the bill for the re-charter of the
district banks came up. The specie basis of many of them had been
allowed to become altogether too low; and Benton showed himself more
keenly alive than any other public man to the danger of such a state of
things, and argued strongly that a basis of specie amounting to one
third the total of liabilities was the only safe proportion, and should
be enforced by law. He made a most forcible argument, using numerous and
apt illustrations to show the need of his amendment.
Nor was the tireless Missouri senator satisfied even yet; for he
introduced a resolution asking leave to bring in a bill to tax the
circulation of banks and bankers, and of all corporations, companies, or
individuals, issuing paper currency. One object of the bill was to raise
revenue; but even more he aimed at the regulation of the currency by
the suppression of small notes; and for this end the tax was proposed to
be made heaviest on notes under twenty dollars, and to be annually
augmented until it had accomplished its object and they had been driven
out of circulation. In advocating his measure he used, as was perhaps
unavoidable, some arguments that savored strongly of demagogy; but on
the whole he made a strong appeal, using as precedents for the law he
wished to see enacted both the then existing banking laws in England and
those that had obtained previously in the history of the United States.
Taken altogether, while the Jacksonians, during the period of Van
Buren's presidency, rightly suffered for their previous financial
misdeeds, yet so far as their actions at the time were concerned, they
showed to greater advantage than the Whigs. Nor did they waver in their
purpose even when the tide of popular feeling changed. The great
financial measure of the administration, in which Benton was most
interested, the independent treasury bill, he succeeded in getting
through the Senate twice; the first time it was lost in the House of
Representatives; but on the second occasion, towards the close of Van
Buren's term, firmness and perseverance met their reward. The bill
passed the Senate by an increased majority, scraped through the House
after a bitter contest, and became a law. It developed the system known
as that of the sub-Treasury, which has proved satisfactory to the
present day.
It was during Van Buren's term that Biddle's great bank, so long the
pivot on which turned the fortunes of political parties, finally
tottered to its fall. It was ruined by unwise and reckless management;
and Benton sang a paean over its downfall, exulting in its fate as a
justification of all that he had said and done. Yet there can be little
doubt that its mismanagement became gross only after all connection with
the national government had ceased; and its end, attributable to causes
not originally existent or likely to exist, can hardly be rightly
considered in passing judgment upon the actions of the Jacksonians in
reference to it.