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Chapter 13 The Rise of a Mass Democracy, 1824–1840 p261 IX. The Bank War • President did not hate all banks and all business, but he distrusted monopolist banking and overbig businesses: – The federal government minted gold and silver coins mid-nineteenth century, but no paper money • Paper money was printed by private banks. • Their value fluctuated with the health of the banks and the amount of money printed. IX. The Bank War • The Bank of the United States: – Was a private institution created by a Federal government charter – Therefore it was the most powerful bank – Acted like a branch of the government (but only Governmental control of bank was rechartering) – Principal depository for government funds – Controlled much of the government’s gold and silver – Its notes were stable • A source of credit and stability, it was an important and useful part of the nation’s expanding economy IX. The Bank War • But the Bank was a private institution: – Bank President Nicholas Biddle had immense and, to many, unconstitutional power over the nation’s financial affairs – To some the bank seemed to sin against the egalitarian credo of American democracy • This conviction formed the deepest source of Jackson’s opposition • The banks won no friends in the West (Why?) • Profit, not public service, was its first priority IX. The Bank War • The Bank War erupted in 1832: – When Daniel Webster and Henry Clay presented the Congress with a bill to renew the Bank of the United States’ charter • The charter was not to expire until 1836, but Clay pushed for renewal four years early to make it an election issue in 1832 • Clay‘s scheme was to run a recharter bill through Congress and then send it to the White House IX. The Bank War • Clay believed if Jackson signed it, he would alienate his worshipful western followers • If he vetoed it, he would presumably lose the presidency in the upcoming election by alienating the wealthy and influential groups in the East • The recharter bill slid through Congress, but was killed by scorching veto from Jackson IX. The Bank War – Jackson’s veto message reverberated with constitutional consequences – But vastly amplified the power of the presidency. • He was arguing that he vetoed because he personally found it harmful to the nation. • He was claiming for the president alone a power equal to 2/3 of the votes in Congress. – HOWEVER The Supreme Court declared the monopolistic bank to be constitutional in McCulloch v. Maryland (1819) King Andrew I p260 1832 Election: “Old Hickory” Wallops Clay • Clay and National Republicans’ advantages: – They had ample funds, including $50,000 in “life insurance” from the Bank of the United States – Most newspapers editors dipped their pens in acid when they wrote of Jackson – However • Yet Jackson, idol of the masses, easily defeated the big-money Kentuckian • The popular vote was 687,502 to 530,189 for Jackson—electoral count was 219 to 49 p260 The Death of Biddle’s Bank • With the renewal of the charter veto by Jackson, the Bank of the United States was due to expire in 1836: – Jackson decides to kill it by removing all federal deposits – federal funds are transferred to state institutions—the so-called pet banks – Two Treasury Secretaries feels this is so dangerous he refuses: Jackson removes him from office and appoints – He further proposed depositing no more funds The Ascendency of King Andrew I gives rise to the ……. v. p260 The Birth of the Whigs • New parties: – 1828 the Democratic-Republicans adopted the “Democrats” – The Whigs created by Jackson’s opponents • They hated Jackson and his “executive usurpation” • First emerged in the US Senate, where Clay, Webster, and Calhoun joined forces in 1834 to pass a motion censuring Jackson for his single-handed removal of federal deposits from the Bank of the United States – The choice of the name harkens back to the Parliament’s fight against the English King XII. The Birth of the Whigs • Others who joined the Whigs: • Supporters of Clay’s American System, southern states’ righters, larger northern industrialists and merchants, and many evangelical Protestants. • Whigs thought of themselves as Conservatives, yet progressive in their support of active government programs and reforms • Called for internal improvements like canals, railroads, telegraph lines, and support for institutionsprisons, asylums, and public schools. XII. The Birth of Whigs • Other issues for the Whigs: – They welcomed the market economy – By absorbing the Anti-Masonic party, they blunted the Democratic appeal to the common man – Now the Whigs claimed to be the defenders of the common man and declared the Democrats the party of cronyism and corruption XIII. The Election of 1836 • Martin Van Buren of New York: – Was Jackson’s choice for “appointment” as his successor in 1836 – Jackson rigged the nominating convention and rammed his friend to the delegates • Van Buren was supported by the Jacksonites without wild enthusiasm • The Whigs showed their inability to nominate a single presidential candidate XIII. The Election of 1836 • The Whigs’ strategy was to run several “favorite sons”: • each with a different regional appeal, hoping to scatter the vote so no one candidate would win a majority • The deadlock would have to be decided by the House of Representatives, where the Whigs would have a chance • The Whigs’ “favorite son” was General William Henry Harrison of Ohio, hero of the Battle of Tippecanoe (see p. 220) XIII. The Election of 1836 • The Whigs’ scheme availed nothing: – Van Buren, the dapper “Little Magician,” squirmed into office by popular vote of 765,483 to 739,795 – And a comfortable margin of 170 to 124 votes (for all the Whigs combined) in the Electoral College XIV. Big Woes for the “Little Magician” – Martin Van Buren, eighth president, first to be born under the American flag • A statesman of wide experience in both legislative and administrative life • In intelligence, education, and training, he was above the average of the president since Jackson. – He labored under severe handicaps: • As a machine-made candidate, he incurred the resentment of many Democrats • He was the master showman p260 Consequences of the Death of Federal Bank • The death of the Bank of the United States left a financial vacuum and kicked off a lurching cycle of booms and busts: – No central control; the pet banks and smaller “wildcat” banks were more fly-by-night operations Consequences of the Death of Federal Bank • Jackson tried to rein in the runaway economy – He authorized the Treasury to issue a Specie Circular—a decree that required all public land to be purchased with “hard,” or metallic, money. – This drastic step slammed the brakes on the speculative boom, thus contributing to the financial panic and crash in 1837 Depression Doldrums and the Independent Treasury • The panic of 1837: – Its basic cause was rampant speculation prompted by a mania of get-rich-quickism – The speculative craze spread from western lands and “wildcat banks” to canals, roads, railroads, and slaves – Jackson’s finance, including the Bank War and the Species Circular, gave an additional jolt – Failures of wheat crops deepened the distress Depression Doldrums and the Independent Treasury – Financial stringency abroad endangered America’s economy • Two major British banks failed – Hardship was acute and widespread • American banks collapsed by the hundreds • Commodity prices drooped, sales of public lands fell off, customs revenues dried up • Factories closed and unemployed workers increased p264 Election of 1840: Log Cabins and Hard Cider • Martin van Buren was renominated in 1840 by the Democrats • The Whigs, learning from their mistakes, nominated one candidate: Ohio’s William Henry Harrison, believed to be the ablest vote-getter – Whigs published no official platform – Whigs, as a result of a Democratic editor, adopted hard cider and log cabin as symbols Election of 1840: Log Cabins and Hard Cider – The Whig campaign was a masterpiece of inane hoopla • Harrison was from one of the FFV’s (“First Families of Virginia”) • Harrison won by the surprisingly close margin of 1,274,624 to 1,127,781 popular votes, by an overwhelming electoral margin of 234 to 60 – Whigs sought to expand and stimulate the economy, while Democrats favored high-flying banks, aggressive corporations, retrenchment p271 p271 p270 Politics for the People – The election of 1840 conclusively demonstrated two major changes in American politics since the Era of Good Feelings: 1. The triumph of a populist democratic style – By 1840s aristocracy was the taint, and democracy was respectable – Politicians were now forced to curry favorites with the voting masses – Now wealthy and prominent men had to forsake all social pretensions and cultivate the common touch if they hoped to win elections – The common man was at last moving to the center of the national political stage. – America was now bowing to the divine right of the people. The Two-Party System 2. The second dramatic change resulting from the 1840 election was the formation of a vigorous and durable two-party system: – Both grew out of Jeffersonian republicanism • Jacksonian Democrats glorified the liberty of the individual and guarded against the inroads of “privilege” into government. They clung to states’ rights and federal restraint in social and economic affairs • The Whigs tended to favor a renewed national bank, protective tariffs, internal improvements, public schools, and moral reforms—prohibition and slavery The Two-Party System – They separated by real differences of philosophy and policy, but had much in common: • Mass-based, “catchall” parties to mobilize many voters as possible for their cause. • When the two-party system creaked in the 1850s, the Union was mortally imperiled.