The Middle Period 1817-1858 Part 16

On June 29th the House bill appeared in the Senate, and was referred by that body to its committee on Manufactures. On July 2nd Mr.

d.i.c.kerson reported from this committee the House bill, with a series of amendments to it, proposed by the committee. These amendments were all in the direction of Mr. Clay's idea, and were adopted by the Senate. The bill as thus amended pa.s.sed the Senate on July 9th, the Senators from every Northern Commonwealth voting for it, and those from every Southern Commonwealth, except Kentucky, Missouri, and Louisiana, voting against it. Missouri was hardly to be then cla.s.sed as a Southern Commonwealth. Louisiana was won by an increase of the duty on sugar. And only one of the Senators from Kentucky voted against the measure.

[Sidenote: The bill as finally pa.s.sed.]

The House of Representatives refused to concur in some of the amendments, and the measure was sent to a Conference committee. This committee patched up a compromise, and the bill became a law on July 14th.

On the whole, it was doubtful if the bill, with the changes imposed upon it by the Senate, would prove to be any relief to the South. Many of the Southerners claimed that it would increase the burden upon that section, while none of them appeared to think it would lighten it.

{189} What now were the planters to do? They had waited for the extinguishment of the debt, and for the period when the Treasury would no longer require the sixteen millions of dollars per annum applied to its cancellation, hoping for a general reduction of duties by something like this sum as the necessary result; but instead of this they were now offered, as a final solution of the tariff question, a slight reduction of duties on articles coming into compet.i.tion with home products, a practical abolition of the duties on those which did not come into compet.i.tion with home products, and an increase in the expenses of the Government to the amount of the receipts whatever they might be. This was to be the permanent policy of the country, the "American System."

They were indeed wofully disappointed, not to say deceived. There seemed now no further hope of aid to them, from either Congress, the President, or the courts. They must yield unconditionally and hopelessly, or resist the execution of the law. The former course was too much to expect from the proud barons of South Carolina. The only question was whether some legal basis for the resistance could be found, or whether it must take on the form of rebellion. We have already considered Calhoun's doctrine of nullification, and his claim that it was a const.i.tutional remedy; it now remains for us to trace briefly the history of the attempt to apply it. Before, however, we can do this intelligently, we must consider the other political developments of the year 1832, occasioned chiefly by the presidential election of that year, but affecting directly or indirectly the att.i.tude of the Administration toward events in South Carolina, and the att.i.tude of Congress toward the President in dealing with nullification.

{190}

CHAPTER IX.

THE UNITED STATES BANK AND THE PRESIDENTIAL CONTEST OF 1832

Jackson and the Bank in his First Annual Message--Jackson's Relations to the Portsmouth Branch of the Bank--Jackson's Opposition in Principle to the Bank--The Political Science of the Const.i.tution of 1787--Western Democracy--The West and the "Money Power" of the East--"States' rights" and the Bank--The Case of Brown and Maryland--Democracy and Socialism--Benton's Attack on the Bank--Benton Repulsed--Jackson and Benton--The Bank and the People--The Existence of the Bank made a Political Issue--Jackson's Second Attack on the Bank--Jackson's Plan for a Bank--Benton's Resolution against the Re-charter of the Bank--Jackson's Challenge to make the Continued Existence of the Bank the Issue in the Campaign of 1832--The Challenge Accepted--The Bank's Pet.i.tion for Re-charter--Benton's Charge of Illegal Practices--Pa.s.sage of the Bill for Re-charter--The Veto of the Bank Bill--The Bank and Foreign Powers--The Bank and the West--The Bank and the Rich--Structure and Powers of the Bank--Jackson on Executive Independence--Von Holst's Criticism of the Veto Message--The President's Real Meaning.

[Sidenote: Jackson and the Bank in his first annual message.]

In his first annual message, that of December 8th, 1829, President Jackson began his war upon the United States Bank. He declared in it that the const.i.tutionality and expediency of the law creating the Bank were well questioned by a large portion of the people, and that its failure to establish a sound and uniform currency, the great end of its existence, must be admitted by all.

{191} [Sidenote: Jackson's relations to the Portsmouth branch of the Bank.]

Basing themselves chiefly upon an individual report made by Mr. John Quincy Adams on May 14th, 1832, in regard to the condition of the Bank, and upon doc.u.ments referred to in that report, recent historians attribute President Jackson's first attack upon the United States Bank to a personal feud between his friends in New Hamps.h.i.+re and Mr.

Webster's friends there.

Senator Levi Woodbury, of New Hamps.h.i.+re, the leader of the Jackson party in New Hamps.h.i.+re, endeavored, in the summer of 1829, to have Jeremiah Mason, Mr. Webster's great friend, removed from the presidency of the branch of the United States Bank at Portsmouth, N.

H., and Isaac Hill, another New Hamps.h.i.+re friend of the President, attempted at the same time to have the United States pension agency, connected with the Portsmouth branch of the United States Bank, removed to Concord, and connected with a little bank there of which Hill had been president, and in which he was still interested.

Jackson's Secretary of the Treasury, Mr. Ingham, asked Mr. Biddle, the president of the United States Bank, to have Mason removed, and his Secretary of War, Mr. Eaton, ordered Mason to transfer the pension agency to Hill's bank in Concord. Mr. Biddle looked into the matter, and being convinced that the whole thing was a political scheme, refused to have Mason removed from office, and prevented the execution of Eaton's order in regard to the transfer of the pension agency.

These are, very briefly stated, the facts upon which some of the American historians found the theory that Jackson, entertaining no opposition in principle to the Bank at the beginning of his Administration, became so enraged at its managers, because of their success in these petty bouts with his Cabinet officers, that he {192} resolved upon its destruction. The treatment which Adams and Clay had received at the hands of Jackson and his friends from 1824 onward had led them to feel that Jackson's whole nature was full of personal rancor, and that he could see nothing except from a personal point of view. There is little doubt that this feeling largely determined Adams' ideas of Jackson's att.i.tude in the Bank question, and that the historians have written the account of the Bank controversy under the influence of Adams' representations.

[Sidenote: Jackson's opposition in principle to the Bank.]

There is undoubtedly some truth in this view of the matter, but it is far from being the whole truth. It is not even that part of the truth which is most valuable to the student of American history. There was an opposition in principle to the United States Bank, as well as a personal conflict between leaders in regard to it. That opposition in principle was the opposition of "States' rights" democracy to centralized privilege.

In all political systems there is a political science as well as a public, or const.i.tutional, law. The political science of a state is based chiefly upon the actual social conditions and relations of its population, and its public or const.i.tutional law ought to be based upon its political science. In fact, however, we seldom see social conditions, political theory, and public law in a state of perfect harmony. It is the prime problem of political and legal progress to work out this great result.

[Sidenote: The political science of the Const.i.tution of 1787.]

[Sidenote: Western Democracy.]

[Sidenote: The West and the "money power" of the East.]

The political science or theory upon which the Const.i.tution of 1787 was founded was thoroughly English. It recognized social distinctions, and its most fundamental principle was compromise between conflicting interests. It was substantially in harmony with social conditions, on the one side, {193} and was fairly expressed through the Const.i.tution of 1787, on the other. Without the interposition of other forces it would have made out of the United States a new England. But French political science had already gained a foothold in the country. It was contained in the Declaration of Independence, and its prime postulate was "the equality of all men." It did not then comport with the social condition of the country, and the Const.i.tution did not make its principle into positive law. It was, therefore, at the beginning, abstract, and theoretical. The man who taught it, however, became President, and the party which embraced it became the governing party.

But their practice was not made consistent with their theory, and could not be, so long as the social conditions of the country contradicted their theory. It was the settlement of the country west of the Alleghanies which first created social conditions in harmony with their theory. The distinction between master and slave was not permitted to enter the larger portion of it; the distinction between the rich and the poor could not at first exist, or be, for many years, developed; and the distinction between the cultivated and the ignorant was likewise obliged to remain long in abeyance; while the dangers and the hards.h.i.+ps of frontier life developed, speedily, a strong sense of self-reliance and self-esteem. General equality and practical self-help were the first social results of the levelling experiences of the camp, the wilderness, and the prairie. With such influences operating upon such characters as undertook the making of the West, the most adventurous part of the population of the East, that bold and boastful Democracy was produced, which began after 1820 to make itself powerfully felt in modifying the original conservative principles of the inst.i.tutions of the country. Connect with these new social conditions, and the {194} political principles evolved out of them, the fact that the West, like all new countries, had little money or capital, and was a constant borrower from the East, in order to furnish itself with roads, implements, means of transportation, and manufactured articles, and we have the forces and the interests which were bound, under the first general financial pressure, to make an onslaught upon the "money power and privilege" of the East, as embodied in the United States Bank.

[Sidenote: "States' rights" and the Bank.]

The "States' rights" opposition to the Bank had been aroused more than a decade before Jackson's message of 1829. The Bank and its branches were the sole depositories of the funds of the Government. By refusing to accept on deposit the bills of Commonwealth banks which did not redeem their bills in specie on demand, the Bank could prevent the officers of the Government from accepting such bills for dues to the Government. The Bank used this power to force the Commonwealth banks to specie payment. It was one of the purposes for which Congress created the Bank. It made the Bank, however, very unpopular with the officers and stockholders of the banks chartered by the Commonwealths.

These persons were, as a rule, men of influence in their respective communities, and they succeeded in persuading many of the people that the United States Bank was a centralized monopoly, and was using its powers and privileges to oppress the inst.i.tutions of the Commonwealths.

In 1818 the legislatures of Ohio and Maryland imposed a heavy tax on the branches of the Bank located within their respective jurisdictions. The purpose was to drive them out. The Bank resisted payment, and was sustained by the United States courts.

{195} [Sidenote: The case of Brown and Maryland.]

In the February term of 1819 the Supreme Court of the United States decided the famous case of McCulloch and Maryland, declaring the act of Congress creating the Bank const.i.tutional, and the act of the Maryland legislature undertaking to tax it unconst.i.tutional. Maryland submitted at once, but the officers of the government of Ohio forced their way into the branch of the Bank in that State, at Chillicothe, and took one hundred thousand dollars out of the vault, and that too in the face of an injunction issued by the United States Circuit Court. The directors sued the officers of the Commonwealth for trespa.s.s, and the Commonwealth refused the use of its jails to confine the persons arrested. At the same time the Commonwealth reduced the tax to ten thousand dollars, and refunded ninety thousand, and finally receded entirely from its unlawful demand.

This defeat of the "States' rights" attack, and the excellent management of the Bank by Langdon Cheves, and then by Nicholas Biddle, seem to have silenced the complaints against the Bank from 1823 to 1828.

[Sidenote: Democracy and Socialism.]

It was during this period, however, that the "State socialistic"

characteristic of radical democracy received a strong development in the Commonwealth of Kentucky, through the relief measures for debtors; which measures threatened to destroy the const.i.tutional guarantees of private property. The "relief party" secured the legislature and the executive of the Commonwealth. The judiciary, however, stood out against them, and they did not have the necessary two-thirds majority in the legislature to remove the judges. The legislature, however, pa.s.sed a new judiciary act, and created another supreme court of the Commonwealth. This scandal of judicial anarchy existed for nearly two years, when, at last, in 1826, the {196} "anti-relief" party elected a majority of the legislative members, and the new legislature repealed the act establis.h.i.+ng the new court.

Jackson's friends in Kentucky belonged almost exclusively to the "relief party," and it is hardly fanciful to attribute to this movement in Kentucky some influence in the formation of Jackson's ideas in regard to the United States Bank, and in regard to his plan for a Government bank, responsible to the people and managed for the benefit of the people.

[Sidenote: Benton's attack on the Bank.]

On March 3rd, 1828, Senator Benton began his warfare upon the Bank. He attacked its privilege of being the depository of Government money. He claimed that there were two or three millions of dollars of Government money used in loans by the Bank, which earned about one hundred and fifty thousand dollars a year of interest, all of which went to the stockholders of the Bank and none of it to the Government, while the Government was all the time paying interest on the public debt and taxing the people for the purpose. He wanted to take the surplus deposits out of the Bank and pay a part of the public debt with them.

This was the first charge of the Western Democracy upon privilege, as being opposed to the principle of universal equality.

[Sidenote: Benton repulsed.]

There were, however, enough practical men in the Senate who considered this privilege as only a fair compensation for the service rendered by the Bank to the Government in transporting the Government funds without any specific return therefor, and who knew that it is not good banking to pay interest on deposits, to reject Mr. Benton's resolution. Benton repeated his motion on January 1st, 1829, but with no greater success.

[Sidenote: Jackson and Benton.]

After March 4th, 1829, the leaders.h.i.+p of the party was {197} in the hands of the President, and Benton became Jackson's lieutenant in the Senate. There had been personal feuds between the two men, but they now harmonized politically, and in no point did that harmony become more complete than in the war against the Bank.

It is probable that at the moment of his accession to power Jackson had not thought out the relation of the democratic principle to the Bank, but he undoubtedly felt it, and the feeling guided him to the position which he a.s.sumed, first toward the questions of detail in the Bank's policy and management, and then toward the general question of its existence. The controversy between his Secretaries and the Bank's officers, upon which Mr. Adams laid so much stress, probably precipitated matters, but the crisis would have developed under other circ.u.mstances had not these existed. The social and political forces at play were bound to bring it about under one issue or another. It may have astonished the politicians and statesmen of the East then, and it may astonish the casual reader of American history now, that Jackson attacked the question of the future existence of the Bank in his first annual message, but there is nothing surprising in it to the careful student of American history, who comprehends the development of the democratic spirit of the West during the third decade of the century.

[Sidenote: The Bank and the people.]

It is doubtful whether the President was correct in saying, as he did in his message of 1829, that a large portion of the people questioned the const.i.tutionality and expediency of the law creating the Bank, and it is certain that the Bank was not considered by all to have failed in the establishment of a sound and uniform currency. It is far more probable that the people generally acquiesced in {198} the decision of the Court p.r.o.nouncing the Bank law const.i.tutional, and that the majority of the people, at that moment, regarded it as good policy, and believed that the Bank had fairly fulfilled the purpose of its creation. The President was simply a.s.suming that the people thought as he did, as democratic leaders usually do. Taken in that sense there was nothing extraordinary in what he said. He had a right to disagree in opinion with the Court, and to say so, and to make any recommendation to Congress which seemed wise to him, in regard to the re-charter of the Bank. That an expiring law is const.i.tutional is not always a convincing argument for its re-enactment.

[Sidenote: The existence of the Bank made a political issue.]

The President's criticism occasioned an investigation into the principle and status of the Bank, and brought the Bank question into the politics of the day.

The committee on Finance of the Senate, and the committee on Ways and Means of the House, made reports, in March and April of 1830, vigorously defending the const.i.tutionality, the expediency, and the management of the Bank, and demonstrating the great political and financial dangers of such a Government bank as the President suggested. The chairman of the committee on Ways and Means was, it will be remembered, Mr. McDuffie, the political economist of the slavery interest. To his mind the Bank question had evidently little connection with the slavery question.