Andrew Jackson’s Character & The Second National Bank
Posted by Orrin Woodward on October 22, 2010
Andrew Jackson, when right or when wrong, was always a man of strong convictions, willing to stand by his principles even when it hurt him personally to do so. It takes character to stand by one’s convictions, especially when a financial motive is offered to tempt one to ignore them. Character is the ability to follow true principles because they are true principles, regardless of the financial consequences involved. In today’s ‘situational ethics’ society, principles are twisted to justify nearly any activity, tossing character aside into the dustbin of history. Much could be learned by studying the courageous stand made by Andrew Jackson against the ‘moneyed interest’ during the re-charter debates for the Second National Bank. Reading this history makes one yearn to find leaders of conviction to revive America, and the world, out of the moral relativity currently poisoning our society. Let’s review the historic battle between Jackson and the Second National Bank, learning the lessons of character and conviction so necessary for today world.
Jackson resided in the thriving American West, witnessing first hand the dire effects of inflationary banking policies in the western land prices. Jackson learned the salutary lesson of hard money (gold and silver coins) vs. the prevalent paper based inflationary policies loved by bankers and wealthy merchants. Inflationary methods allowed banks to print paper, pretending the paper had value, even thought it wasn’t backed by gold or silver. Without a check on the banks, like requiring banks to submit gold for paper dollars when requested, one can easily see how banks would fall into the trap of printing more paper than could possibly be redeemed on demand. Profits for banks can increase greatly in the short term by interest collected on nothing more than paper, causing more money to flow into the marketplace which raises the prices of consumer goods as more printed dollars are available. The splurge of printed money only corrects itself when consumers become aware of the inflationary policies of banks, quickly requesting gold for their inflated paper dollars before the banks runs out their reserves. In theory, paper money should be a promissory note, representing gold, but easier to carry on one’s person. The minute the promissory note is not backed by real value (gold, silver etc), it becomes fraudulent with the bank benefitting by printing monopoly money at the expense of all consumers who now own dollars less valuable than before the fraudulent activity. For example, if we doubled the amount of dollars in circulation today, giving everyone twice as much money as they have currently, each dollar would quickly fall to half of its former value, prices would rise as each person’s dollars bid up the prices in an attempt to purchase the means for living. Printing money does not produce wealth, but it can benefit the few at the expense of the many, a temptation too lucrative to be left in the hands of government politicians and their wealthy patrons.
When Jackson was elected President of the United States, one of his missions was to end the syndicate of control over America’s money supply by three power hungry groups: foreign interests, big business, and big politicians. Jackson believed that banks ought to run like any other businesses, having to sink or swim based upon their own business acumen, needing reserves to secure their loans provided. But when a national bank receives the protection of the federal government to ensure its solvency, this is no longer free enterprise, but a form of fascism, where government and business partner, reducing competition amongst banks, and increasing the cost of the entire system. It would be similar to all automotive companies agreeing to fix prices on cars, certainly improving the profits for manufacturers, while decreasing the downside risk of the manufacturers, all of this, at the expense of the customers. The Second National Bank received the deposits of the America, ensuring its solvency, providing a special deal for the bank and its investors at the expense of other banks and all customers. Nicholas Biddle, the president of the Second National Bank, was not alarmed, at first, with Jacksons rhetoric, having heard many politicians boast of drastic changes when entering office, only to conform into the system when elected. But Jackson character was different, his campaign promises before aligned with his actions after election, necessitating a showdown between the President and the money interest behind the Bank.
Biddle, President of the Second National bank, a scion of a high society Philadelphia family, did not like the rough and tumble behavior of the American political process, preferring to do his work behind the scenes. Jackson, on the other hand, loved the volatile political process and was elected by the populist vote throughout America. No two people better contrasted the opposing currents in the American stream of consciousness: the first, an equal opportunity for all proponent; the second, wealth and privilege for the few proponent. Jackson shared his disdain for the Bank in his first Presidential message saying, “Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow citizens, and it must be admitted by all that it has failed in the great end of establishing an uniform and sound currency.” Biddle, not concerned, responded to Jackson’s message with a cool indifference, writing of Jackson, “They should be treated as the honest though erroneous notions of one who intends well.” Biddle, simply put, did not believe that Jackson had the character and fortitude to fight, let alone win, against the moneyed interest firmly entrenched in America’s political system. Biddle would soon repent of this mistaken belief.
After confirming Jackson’s intention to not renew the Bank’s charter, Biddle rallied his political forces, including Henry Clay and Daniel Webster, deciding to re-charter the Bank in Jackson’s first term, instead of the waiting until the charter ran out at the end of Jackson’s second term. The goal being to force Jackson’s hand, since, desiring to be re-elected, Jackson, the money interest believed, would not risk his re-election on the Bank’s charter. But not for the last time, the Biddle and his crew, underestimated the character of Jackson. The Bank Bill, with the help of Clay and Webster, quickly passed through both houses, leaving Jackson with a fight or flee choice on his veto decision. Most people would have simply bowed to the powerful money interest, maintaining their prestige and electability, but Jackson was not like most people. In a historic veto address, Jackson declared war on the wealthy aristocracy attempting to subvert the American Republic. His veto address should be read by all Americans who love freedom and equal opportunity for all. Let me share a small portion of this powerful address:
“It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society-the farmers, mechanics, and laborers-who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.”
With this shot across the broadsides of the financial elite, a shot that could not go unanswered, especially when delivered by the sitting President of the United States, the elites turned on all of their political weapons. Biddle realized, finally, that Jackson could not be bought, bullied or bs’ed. Jackson, having studied the effects of paper money for years, especially the South Sea Bubble debacle of the 18th century, knew more about currency than many of his Eastern elites opposing him, understanding that paper money, not backed by hard currency, was a fraud upon the people. Biddle, on the other hand, suffered no scruples in issuing propaganda articles in support of his Bank against the interest of the people, even using his money to influence, dare I say bribe, editors to run articles in a move to win the people to his side. He wrote a letter to one editor, “If you will cause the articles I have indicated and others which I may prepare to be inserted in the newspaper in question, I will at once pay to you one thousand dollars.” A thousand dollars at that time is equivalent to nearly twenty-five thousand today, certainly enough money to buy the principles of all but the editors of the highest character. Actions like this only confirmed to Jackson his belief in the unhealthy influence of the Bank, not only with politicians, but also the press, leaving our republican political process in a sad state. Remember, money and power are only two sides of the same coin. Where money gathers, power is soon to follow; where power gathers, money is soon to follow.
Biddle, not to be denied, declared war on Jackson in response to Jackson war on the Bank. One of the Bank’s most virulent supporters, a man who could name his price, was Daniel Webster, the famed lawyer and politician from New England. Even though Webster, originally, had opposed the Banks charter, he found Bank religion when Biddle offered a healthy retainer, helping Webster repent of his previous views. In the midst of the re-charter controversy, Webster wrote the following missive to Biddle, “ I believe my retainer has not been renewed or refreshed as usual. If it be wished that my relation to the Bank should be continued, it may be well to send me the usual retainers.” Webster, along with Henry Clay, were more than happy to support the financial elite structure as long as perks and recognition flowed to themselves in this Faustian bargain. Webster launched a vociferous attack on the policies of Jackson, blasting his veto measure of the Bank. Biddle had bought some of the best names in Congress to oppose Jackson, forcing consternation among many of Jackson supporters, requesting him to yield on the Bank issue to maintain decorum in the government. On top of that, Jackson’s popularity suffered greatly by the spewed propaganda unleashed by editors congenial to the financial largesse offered by Biddle for diatribes against Jackson’s policy.
With the political forces in Congress assembled against him, with the editors of the press greased for battle by the outpouring of dollars, Biddle still had one more ace up his sleeve. He feared that Jackson’s would remove the Treasury deposits from the Bank, starving the bank of the money necessary to maintain its unique power base, saying to Webster, “They will not dare to remove them. If the deposits are withdrawn, it will be a declaration of war which cannot be recalled.” Biddle launched a campaign of loan closures, calling in loans made from his Bank to many businesses across the country, causing financial panic and loud calls for Jackson’s submission to the Bank’s re-charter. With banks collapsing across the country under Biddle financial flexing of his muscles, Jackson’s resolve to finish the war only strengthened, witnessing, first hand, the inordinate power that the Bank held over the economy. Jackson believed that any power capable of causing a panic of this magnitude was not healthy for the freedoms of the American people. He denounced the Bank’s action to his cabinet, “The Bank has by degrees obtained almost entire dominion over the circulating medium, and with it, power to increase or diminish the price of property and to levy taxes on the people in the shape of premiums and interest to an amount only limited by the quantity of paper currency it is enabled to issue.” Jackson clearly understood the role that money interest can play in causing inflation and market bubbles, an understanding seemingly lost by today’s politicians with our Federal Reserve System.
In fact, H. W. Brands is his remarkable biography of Andrew Jackson writes of Biddle’s plan to buy off members Congress along with key influencers in Jackson’s administration, “In half an hour,” he boasted to an intimate, “I can remove all the constitutional scruples in the District of Columbia. Half a dozen presidencies” — of bank branches — “a dozen cashierships, fifty clerkships, a hundred directorships, to worthy friends who have no character and no money.” Another example of Biddle’s intuitive understanding that money and power flock together, by gaining one, the other will follow as night follows day. Biddle, even in the midst of the government’s withdrawal of Treasury Deposits, remained confident of his ultimate victory writing, “My own view of the matter is simply this…. The [instigators] of this last assault on the Bank regret and are alarmed by it. But the ties of party allegiance can only be broken by the actual conviction of existing distress in the community. Nothing but the evidence of suffering abroad [that is, in the country as a whole] will produce any effect in Congress.… This worthy President thinks that because he has scalped Indians and imprisoned judges, he is to have his way with the Bank. He is mistaken.” The corrupting effects of power are evident throughout the thoughts, writings, and actions of Biddle at this stage of the war, sharing with another confidante, “My own course is decided, all other banks and all other merchants may break, but the Bank of the United States shall not break.” Biddle literally believed that he, by causing suffering to America, could control the political leaders of our country, making politicians serfs to the whims of the financial elite.
Jackson stood his ground, eventually winning the war, though not without receiving many wounds along the way. Re-elected in a landslide, Jackson proved that a person with convictions and character can stand his ground, regardless of the forces aligned against him. At one point in the battle, Jackson told his Vice-President Martin Van Buren, “The Bank is trying to kill me. But I will kill it.” Jackson demonstrated the powerful effect that one man or woman, with the courage to stand strong, will eventually strengthen the spine of others who recognize the fight between right and wrong. Character, like a lack of character, is contagious. Anyone can say they have character, but character is not recognized in words, but only in deeds, especially when you will suffer for your convictions. Jackson accomplished many things in his life, both militarily and politically. He died a revered American patriot, but, in my opinion, his most courageous stand occurred in his battle against the Second National Bank. May all of us learn the lessons of courage and character from Andrew Jackson’s life. God Bless, Orrin Woodward