Bank wars of the 1830s. Class is about 55 minutes. Good morning everybody, and welcome to American History. My name is jonathan barth. You all know me as professor barth. I am a history professor at Arizona State university, in conjunction with two stellar, worldclass programs, and there they are on the screen. The school of historical, philosophical, and religious studies, great program. And then also the center for political thought and leadership, another Stellar Program if this lecture intrigues you. You should check out our center. We are doing some big things. If you are interested in in learning more about yours truly, www. Professorbarth. Com, you can read about me on that website. A generation of politicians have passed. Alexander hamilton died in a duel in 1804. James madison, pictured on the right, retired from politics and dies in 1836. John adams and Thomas Jefferson die on the same day, july 4, 1826, 50 years to the day of the signing of the declaration of independence. Pretty incredible. You cant make Something Like that up. But america is changing. A market revolution is sweeping the young republic. Mass commercialization, profitmaking, new opportunities for investment. Inventions, entrepreneurship, a burst in the population. Look at that population explosion from 1 million and from one million in 1750 to 13 million in 1830. New england producing textiles and other manufactured goods. Outside of the cities, outside of new england, and agricultural boom in ohio, pennsylvania. Wheat exports off the charts. In the south, a new plant cotten, that drug of a plant, creating that soft, durable textile, spreading all throughout south, entrenching that slave system deeper and deeper. If youre going to have textiles, cotton, wheat, you need transportation. We have roads built. Steamboats by the 1820s and 1830s trekking up and down the mississippi river. Canals built all across the country, the most famous being the erie canal, completed in 1825, connecting the hudson river to lake erie. What an accomplishment that is. If you have canals and factories and plantations, you need credit. Here too we have lots and lots of credits. Banks spreading sprouting up all across the United States. Several hundred banks by the 1820s. Bankd are chartered by the states and stay within that particular state boundaries. Staying on top of those state banks is the mother bank, the central bank. The bank of the United States. This is the second bank of the United States. If you recall from earlier in the semester, there was a first bank of the United States. 1791, Alexander Hamilton pushes through congress a bank of the United States. This bank a private bank with stockholders and dividends. This bank, hamilton says, will benefit not only financial interests, but will benefit the country, the public. How will it benefit the public . Because the u. S. Treasury will deposit money in the bank coming in from taxes and the treasury can borrow money from the bank. It has a 20year charter but lots of opponents. The chief opponent, Thomas Jefferson hates the bank. The bank, jefferson believes, is an institution that impairs imperils american liberty by elevating to power a wealthy financial elite. Jefferson opposes it. Jefferson comes to power in 1800, the first banks charter expires, but one year later, a war iraq with britain. A war erupts with britain, a very extensive war. Thomas jefferson charters a second bank of the United States and this bank, much like the first, also will have a 20 year charter. This charter will run out in 1836 and presumably, congress and the president , in good faith, will renew the charter. So there you have it. There were bumps along the road. After the bank is chartered, you will recall from the last lecture, the panic in 1819 explodes. This massive bubble and western land speculation caused largely by the bank and the new bank currency. The country recovers from the panic of 1819 fairly quickly, so the second bank of the United States survives that panic and goes into the 1820s with very little opposition. Most americans by the mid1820s have come to accept the bank, the market revolution is fully underway. It is not just the economy that is changing. It is the political arena that is changing. Two new political parties, the whigs and the democrats. Who are these whigs and and democrats . Representing new england, one of the best orators, Daniel Webster. A lawyer from massachusetts, one of the most brilliant orators in u. S. Congressional history. Quite an oppressive figure. We also have John Quincy Adams. Son of the second president of the United States, john adams. He, too, is a whig. Most famously, henry clay, hailing from the state of kentucky. Clay ends up running for president five times. Just cant get in. He cant seem to do it. Nonetheless, henry clay is one of the most important political figures in American History. Henry clay has an american system. That american system is threefold. Henry clay says first, we need to have protective tariffs on american manufacturing. Sure enough, henry clay, when he becomes secretary of state under president John Quincy Adams, adams signed into law a new tariff, raising it from 25 to 45 . That is one heck of a tariff. Why did they do that . To protect american manufacturers and textile goods. Clay also says we need federally funded internal improvements. Using federal dollars to finance the buildings of roads, canals, bridges, and so forth. And finally, clay says, we need to recharter that bank of the United States. Unlike jefferson excuse me, unlike hamilton, however, clay frames his defense of the bank of the United States in common man rhetoric. Hamilton said the bank is good for financial interests. Clay says the bank is good for farmers. The bank is good for mechanics, for manufacturers, for the country as a whole. We need to recharter this bank, and there is the whig party platform. They support utilizing the powers of the federal government to stimulate economic activity, and they adopt a broad interpretation of the constitution. The federal government, the whigs say, do have the right to engage in this activity. They come mostly from new england, but also from the west. Clay is from the west, and he hopes his improvement in the banks will get some western votes. They have some opposition, and there is that Democratic Party. They opposed the democratic system. They adopt a strict interpretation of the constitution. A very limited view of the federal governments powers. The democrats appeal to farmers, wealthy plantation owners in the south, but also to common, ordinary people, wage earners, workingclass laborers in places like new york. New york is a hotbed for democratic activity. We have martin van buren, a democrat, later president of the United States. He later leaves the Democratic Party and joins the antislavery party. We will get to that in a future lecture. Representing the south for the democrats, we have another legendary figure, john c calhoun. Calhoun, a rabid defender of slavery, it also a rabid opponent of the terrace. The tariff. He calls the tariff of abomination. He offers, in secret, as Vice President of the United States, authors a nullification of the tariff. The idea that the states can nullify any law that they seem that they deem unconstitutional. It puts the idea in their heads. From the west, we have Andrew Jackson. There he is. The man. Probably the most colorful president in United States history, almost objectively. A giant of a figure. He was very tall for that day and age. 61, skinny, bushy eyebrows, hairbrush high above a very large forehead with piercing blue eyes. Jackson was a hot tempered man. He was a bit stubborn, and oftentimes bullheaded. He had strong convictions and he knew when he was opposed to something, he stood up to that system. He had a few nicknames as well. He went by the name old hickory. Tough as old hickory wood. His second nickname, you will not believe this, sharp knife. What is Andrew Jackson story . He was born in 1767 in north carolina. He was born, and his parents died at an early age, so he was an orphan raised with no parental restraint. As a young boy, he got into brawls and fights. He wasnt all that interested in learning or reading. Jackson was nine years old at the time of the american revolution. At age 13, he joined the militia as a messenger. At one point, he ran into a british officer, and the officer told him, clean my boots. He said, i aint cleaning your boots. The officer slashed young andy, leaving a permanent scar on his left hand and the left side of his head. Jackson went on to help found the state of tennessee. The only president in United States history has ever killed a man, thats Andrew Jackson. He joins the military and fights the creek indians in 1814. Fights the seminole indians and in 1817. And fight a spectacular victory against the british in 1817. The war was already over, but that doesnt seem to matter. This elevates him to celebrity status. He had some political experience. He served two years in the u. S. Senate, but that was about all. Jackson was also very wealthy. Very, very wealthy. Theres his plantation. The hermitage starts out, 1804, jackson has nine slaves. By the 1830s he has well over 100 slaves. And slaves are very expensive. Most Common People cannot afford any at all. He is a very wealthy man, very welltodo. Jackson enters the senate in 1823. In 1824 he runs for the presidency, a fourway race between jackson, adams, crawford, and clay. Jackson wins the popular vote, 42 . He also wins the most electoral votes, but jackson does not win a majority of electoral votes. So the contest goes to the house of representatives. Henry clay is speaker of the house. He cannot stand Andrew Jackson. Henry clay strikes a deal with John Quincy Adams and says, i will get the votes you need in the house of representatives if you make me secretary of state. The deal is made, adams wins in the house of representatives and is elevated to president. Henry clay is secretary of state. Andrew jackson is furious, and vows i will get my revenge. In four years, he does. 1828, 2man contest, jackson wins in a landslide. Look at that electoral map. Quite an impressive victory. Victory. How does he do it . The answer is very simple. Democracy. Jackson benefits from universal male suffrage. We call this period jacksonian democracy. Property qualifications for free men are eliminated. No property required to vote. Double the number of voters in 1828 then in 1824. Jackson uses this to his advantage and wages a Political Campaign that utilizes a form of politics we call populism. Populism is a political term that has come up quite a bit in the last few years. What is populism . Populism is not an ideology, per se. You can find populism on the left, on the right. Populism is a style of politics that speaks to the interests, hopes, fears of common, ordinary people. Populists tend to pit the people versus the elite, the people versus the establishment. Populists warn of nefarious forces in positions of power, whether those positions of power are in government or the corporate world. Nefarious forces. And the cherry on top. Populists often benefit from charismatic personalities. Very often, you will see populists emerge who use the sheer force of personality to rally people around them and use that charisma to attack what he claims, at least, corrupt, entrenched interests. Thats what populism is. Andrew jackson is a populist. Andrew jackson is inaugurated in 1829. In celebration of his presidency, he throws a party. Opens up the white house lawn to the public. Hundreds of people from the around the country pour into the white house lawn. Shop keepers, wage earners, common, ordinary, everyday americans, sleeping on hotel room floors and hallways, packed into the white house lawn. A spiked punch bowl and whiskey is being passed around. The people are ready for a jackson administration. As you can imagine, these guys dont like it one bit. Can you imagine what Daniel Webster thought of Something Like this . He is not going to like it too much. Jackson is ready. But is the country ready for jackson . The question is, what is this man going to do . There is no telling. He is a loose cannon. What is going to happen . Henry clay says all right, we lost that election. Im going to put through my american bill, and he begins with internal improvements. Clay says we need a road. Weve got all these farmers from my home state of kentucky, we need a road that stretches from from lexington, kentucky to maysville, kentucky along the ohio river. I want to use federal dollars to build that road. The bill goes on jacksons desk after it flies through congress. Jackson responds and vetoes the bill. One of the first famous vetoes in president ial history. Clay, very upset. This is just the beginning. Clay says, you vetoed my internal improvements bill, lets try another plan for the american system. Lets try a new tariff, the tariff of 1832. It seems to contradict clays program. It lowers the tariff from 45 to 35 . Why does clay do this . You will recall, that tariff of abominations in 1828, South Carolina and other states in the south are very angry about this. Clay fears that 45 is pushing it. Lets lower it a little bit, high enough still, but just a little bit to soften that opposition. The bill arrives on Andrew Jacksons desk. President jackson signs the bill. All sounds good. South carolina is not pleased. South carolina nullify the tariff of 1832. South carolina says not enough. This is unconstitutional. We have a right to declare it null and void. If you do not respect our nullification of this bill, we will secede from the United States. Unbelievable. Happen . Oing to what is Andrew Jackson going to do . Jackson could not be more furious with john c calhoun. For jackson, this is an affront to his authority as president. Jackson signed the bill. Jackson says, to say that any state may, at pleasure, secede from the union, is to say that the United States is not a nation. He asks congress to pass a force bill that will prevent that will send a few thousand u. S. Troops into South Carolina. Jackson prepares the u. S. Navy, now off the coast of South Carolina. Jackson is ready to invade the state of South Carolina. What is going to happen . We are in the brink of civil war. Over a tarriff, who would have thought . Henry clay, at the last moment, passes a compromise in the midst of this crisis that lowers the tariff gradually over a 10year period. It is lowered to 25 . South carolina backs off and accepts the tariff. Calhoun does not like jackson. Probably not any more than henry clay does. Jackson called their bluff. Pointo prove the though, the South Carolina legislature nullified the force bill. Jackson said, whatever. Go ahead and do that. Henry clay says, well, i never thought i would say this andrew, but thank you. Jackson goes, oh, clay, im not done. Clay says, you are not done . What do you mean . Jackson says, there is one other thing. The bank. Clay says, the bank . Its funny you mention that, because i was thinking that maybe we would go ahead and recharter this bank early. Why not . We dont need to wait until the last moment. Its 1832, lets get going and recharter this bank. You are on board with that, right, mr. President . Well, not only am i not on board, mr. Clay, but i am ready to wage war against this bank of the United States. And here we have it, the bank war. One of the most dramatic events in United States history. Bankharter of that second will expire very shortly. Whigs in congress was to recharter it early. Jackson, to their surprise, declares his opposition to the bank. Where does it come from . It seems to come out of nowhere. Jackson did not run his campaign on opposition to the bank. All of a sudden, jackson unleashes a torrent of insults. First of all, jackson says the bank is unconstitutional. The bank, jackson says, is a monopoly. An unconstitutional monopoly. Not only is it a monopoly, it is the monster, jackson says. He warns if the bank is reach art are, we will see in this nation the creation of a new moneyed aristocracy. A financial elite that will overthrow this young republic. We must do everything we can to stop this nefarious thing, this den of vipers, he calls it. Den of vipers . Pretty strong language. He also called it the hydra of corruption, that mythical, multiheaded beast. Jackson says this is a hydra of corruption. What evidence does he have . Is it truly corrupt, as he says . Jackson points out 59 members of congress own stock in the bankea of the United States. They have a financial interest in pushing this recharter through. Not only that, Daniel Webster, serving in the senate, is also a director of this private bank. A hydra of corruption from jacksons point of view. And i, Andrew Jackson, and going to take this bank down. Henry clay cannot believe it. Youre mad, henry clay says. Jackson says, youre mad. I cant believe youre doing this jackson. Jackson says, clay, how many times are you going to run for president . Two times, three times, four times, five times . How many times have you got to lose before you realize that you cant win . Clay is out of his mind, cant believe this is going on. Youre bluffing, clay says. Im not bluffing, mr. Clay. Im going to take this bank down if its the last thing i do, believe me. I am going to do it. Clay does not believe jackson. Congress is in an uproar. All of a sudden, what is going to happen . Should we side with clay . Should we side with jackson . Jackson has some enemies. Not just clay, but the president of the bank himself, nicholas bittle. A man who could not be more opposite from Andrew Jackson. They shared something in common, theyre are both very determined, stubborn, and bullheaded. But biddle was extremely welleducated. Andrew jackson didnt have a college education. The only president , excluding george washington, that did not have a college education. Biddle, at age 10, admitted to the university of virginia. The university of pennsylvania. Aged 10. He transfers to Princeton University at age 15, and he is a genius. A financial wizard. He knows what he is talking about. But that is also his downfall. He is elitist, arrogant, a bit pretentious. Because of that pretentiousness, he looks at someone like jackson, is this really going on . He doesnt know what hes talking about. He sees jackson as an unsophisticated dimwit. He doesnt have any idea what hes talking about. But the country in an age of jacksonian democracy, who are they going to side with . Nicholas biddle earned the nickname czar nicholas. Heres the cartoon, old hickory and bully nick going at it. Not only do we have nicholas biddle, we also have an election coming up. Jackson versus clay. The president ial election of 1832. What an election. The drama. Look at this. Unbelievable. The future of the country, financially speaking, hanging in the balance. You cannot find two greater opponents. Clay, in conjunction with Daniel Webster, has a plan. Clay pushes through congress that summer, just a few months before election day, a bill to recharter the bank of the United States. Why does clay do this . Clay says, i think jackson is bluffing. There is no way, in an election year, he would do something so risky and bold as to reject a bill like this. The bank bill passes the house. The bank bill passes the senate. The bank bill arrives on the president s desk. Veto. Jackson stuns the world and vetoes the bill, unleashing a veto message in which he rails against the bank of the United States. Reprinted in newspapers all across the country, now we have an election. This question of the bank is on everybodys mind. It is the number one issue. Everyone is talking about it. Heres another cartoon. I love that cartoon. Its a projackson cartoon, that hydra of corruption. Jackson going up against that financial beast. Its a Hard Campaign for jackson. Nicholas biddle flexes his muscle, and on behalf of the bank, gives clay a 50,000 campaign donations. What a lot of money for those days. Not only that, but the bank, for years already, has been funding and a loaning money to newspapers all across the country. That press, all of a sudden, a couple months before the election, piling onto jackson. Things look really bad. What is he going to do . Is he going to win . Things dont look good, but jackson is confident. In the midst of this trial, jackson says, the bank is trying to kill me, but i will kill it. What happens . The election occurs. Election day comes about, victory for jackson. Jackson wins the election in a landslide. Clay wins five states, jackson takes the bulk of the states. You will notice, that South Carolina refuses to vote for jackson in the middle of that nullification crisis. Victory for the jacksonians. This cartoon, 1833, pretty interesting. A little back story, and in graduate school i took a digital history course. We had to take an old photograph or old blackandwhite cartoon and use photoshop to color it in. I have never used photoshop, so i taught myself, about this party was interesting and in bad shape. I took this cartoon and did that. Not bad for a beginner, right . Look at the imagery in this cartoon. Pretty incredible. Standing behind jackson, the common man, enthusiastically patting him on the back. The bankers, financiers, running away in fear. The newspapers, the press, all spread out on the ground. They been defeated. Look at the demon face and look at the falling columns. For those familiar with the gospels, there was one time that jesus became violent. When was that . When jesus pulled out his whip and drove out the money changers from the temple, saying get out of my temple to those moneychangers. Jackson, like christ, has driven the moneychangers out of the temple. This is a phenomenal victory for jacksonian democracy. But it is not over. Jackson, 1833, youll notice, that the charter doesnt run out till 1836. Jackson says, i have got to put up with this bank for three more years . I cant do that. Theres no telling what these guys will try to pull. I got to kill this bank now. Sure enough, after he wins the election, he removes all federal deposits, all treasury deposits from the bank, starving the bank to death, removing those federal deposits early and transferring them to state banks, projackson state banks. The bank must shut down. These projackson state banks, by jacksons opponents, are pet banks of the jackson. Arewhigs, understandibly, very upset. Look at this. King andrew the first trampling over the u. S. Constitution. Tehenal improvements, bank. Overstepping his constitutional authority. The whigs say, born to command. This guy has taken some dictator like steps. He is to king like, they say. Youll notice, what is that document jackson is holding up driving the bankers out . Order of the removal of the public moneys deposited from the u. S. Bank. That is in reference to the removal of federal deposits. Years later, when jackson was on his deathbed, he is asked, what was your most proud compliment . Your most proud accomplishment . Jackson has four words. I killed the bank. His proudest accomplishment. And sure enough. 1917, for 77 years in this country, no central bank. In 1913, the congress chartered a new central bank called the Federal Reserve. This Federal Reserve, we could do a whole class on the Federal Reserve. In short, one of the countrys wealthiest financiers in u. S. J. P. Morgan, designed the Federal Reserve. The Federal Reserve prints our money. And mostly private bank. Digitizes many creation more often than printing. And then it loans out the money usually at 1 or 2 interest to leading banks, goldman sachs, jpmorgan, bank of america, and then they lend it out at a higher rate of interest, making profit from the difference, to ordinary people like you or to businesses. More often than not, they will use that money created and lend it to hedge funds, futures, derivatives. It is a very important institution. A cornerstone of the current day banking system, of the currency. If you look very closely at a one dollar bill, it doesnt say u. S. Treasury note at the top. It says Federal Reserve note. Same if you look any five dollar bill or 10 bill or 20 bill. Look at that. There he is. Andrew jackson himself. Thats a strange. What is he doing on that bill . Call me crazy, but that almost looks intentional. Am i right . Almost like a gotcha, we win. Like if you are a big game hunter and kill some game, you take that head and mounted on a wall as a trophy. Or maybe im wrong, maybe they just forgot that jackson was totally opposed. One way or another, pretty interesting story. What happened in the short term after jacksons presidency . Martin van buren defeats Daniel Webster in the next election. Martin van buren runs into some trouble. Financial panic sweeps the country. The panic of 1837. All the pet banks, the state banks that received federal deposits used those deposits to pyramid from them, and that is over speculation in the western land. That creates a land bubble. The bubble pops. The democrats become extremely unpopular across the country. Now the weeks finally have their turn. In 1840, they run against martin van buren. It safe. They say they will run a war hero. Because Everybody Loves war heroes. The hearing the hero of the battle of tippecanoe. Safe, we also will put on harrisons ticket, a democrat. A democrat critical of jackson. A virginia planner. He thought jackson was too cavelike. So we throw a democrat on there. No problem here. Look at that. Win therwhelmingly election and for the first time they control the house, senate,. Residency henry clay rubbing his hands, he is ready to go. Speech, a storm comes through washington, d. C. Pouring down rain. Rain, William Henry harrison, 68yearold, he comes down with pneumonia and dies one month later. Unbelievable. Now, john tyler is president. Totally not what we planned, clay says. Thats ok. Tyler is not jackson, at least. Jackson isnt enough this. We are going to push through a new bill. Clay pushes through a new bill for a bank. This time he calls it something different. He calls it the fiscal bank. It flies through the house, the senate. Gets on john tylers bill, veto. Clay cant believe it. Clay pushes through another bill, this time we wont even call it a bank. Thats how much the country hates banks. They call it the fiscal corporation, the same thing, but renaming it. Goes through the house, the senate, reaches tylers desk, veto again. John tyler vetoes the bank bill twice. Clay cant believe this is happening. We are going to have to wait four more years, clay says. This is unbelievable that we have to put up with this. They wait four years. Finally, clay says, im doing it this time. I cant trust anybody but myself. 1844, he runs for president against james k. Polk and loses the election. Poor henry clay. So thats the bank war episode, and its a fun episode, i think, however you feel about the bank war. Its an interesting event. But there is a darker side to jackson. A darker side to his presidency. A darker side to populism. Andrew jackson, during his and during his administration, we have one of the harshest, cruelest events in u. S. History. That of course is the trail of tears, the removal of roughly 100,000 native americans from the old south west. Cotton is the big fad of the day, plantations spreading across the south. Standing in the way of those plantations are 125 native americans. The creek, the cherokee, the seminole, other groups. In 1830, both the whigs and democrats push through the indian removal act, giving the president permission to negotiate with Indian Tribes to remove them from the Old Southwest into a new territory, indian territory, what is today oklahoma. Jackson defends this saying he wants to preserve indian culture. We are going to move them forcibly into oklahoma, where they will forever be able to live in peace. A few years later, settlers arrive in oklahoma and want that land as well. Jackson does run into an opponent. That opponent is the supreme court, because in 1831, the cherokee sue the state of georgia. It goes all the way to the supreme court, and chief Justice John Marshall rules in favor of the cherokee. He says, removing thereon land is unconstitutional. Jackson, in typical manner, responds to chief Justice Marshall and says, Justice Marshall has made his decision, now let him enforce it. And he completely ignores the decision and the indian removal goes through the most infamous episode, the trail of tears in 1838 and 1839. 15,000 cherokee the next lecture we will look closer at the cherokee civilization because they made a really strong effort to try to comply. It wasnt enough. 15,000 of them removed from aorgia to oklahoma on journey, on foot, 116 days. Terrible conditions. One in four cherokee die of disease or malnutrition. Is 4000. Heres the route of the indian removal. This will give you an idea of how bad things were. Soldiers a confederate from the state of georgia and he had this to say. Between thee war states and i have seen many men shot but the cherokee removal was the cruelest work i ever knew. In conclusion, what can we say about jackson . What can we say about democracy . Populism . There are a lot of lessons here. Democracy can do a lot of good. Strong personalities can do a lot of good. Wellhey can also do bad as. Populism or a jacksonian style of democracy is risky. Two dont know how it will turn out. Things could happen to be good but you dont know. And most of the time, people dont go for populism. Which thereimes in is a sense that there is a corrupt and delete system, that optional that option will an avenue will give to populist, good or bad, demagogue or wellmeaning, and that avenue can often be exploited. So you have to be very careful in moments like that. Jackson, what we make of him . Im not sure. Interesting guy. Next class, we have a new republic. The republic of texas, and that republic of texas is going to apply for statehood in the United States, and that is going to cause its own controversy. So, that does it. Enjoy your weekend, and i will see you on monday. Americane watching history tv. 48 hours of programming on American History every weekend on cspan three. Follow us on twitter for information on our schedule and to keep up with history news. Tv is inan history harrisburg. In capital was dedicated 1906 and then president Theodore Roosevelt said it was the handsomest capital he had ever seen. Up next, we take you inside and show you around. This is our third state capital here in harrisburg. In 1892. One was built it burned. The second was an interim capital. And the third one was built in 19021906. It was designed and