Here is Part II of  my article on Andrew Jackson and the Bank veto. If you missed Part I, here it is. So many lessons can be learned by studying history and how leaders responded.  The Mental Fitness Challenge teaches many of these lessons though numerous historical examples. The LIFE Business is creating a group of courageous leaders who have learned how to learn. All of us are ignorant in some area; however, when we are ignorant on how to learn, our ignorance may become permanent. The goal in LIFE is to teach people how to think so they can learn and remove ignorance from any area of their lives. In truth, this is the same journey taken by Laurie and me and we are still on it to this day. What lessons did you learn from Jackson’s story? How do they apply to your life?

Sincerely,

Orrin Woodward

Andrew Jackson & the Bank Veto

Andrew Jackson & Second National Bank

Jackson’s veto was a shot across the financial-elites broadside and could not remain unanswered, especially when the messenger was the sitting President of the United States of America. Contrary to prevailing perceptions, Jackson was not a novice in his understanding of inflationary policy. In fact, he studied, at length, the history of the South Sea Bubble and the debilitating effects of its inflationary methods. Accordingly, he understood the principles at stake in the Bank battle better than many of the Eastern intellectual elites opposing him. He knew that paper money not backed by bullion was fraud upon the many for the benefit of the few. Biddle, finally comprehending Jackson couldn’t be bought or bullied declared war, pulling out every political weapon in his extensive arsenal. Biddle purchased propaganda pieces in the newspapers in an attempt to refute Jackson’s charges and rally support for the Bank. For instance, he wrote 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 then is equivalent to twenty-five thousand today, certainly enough to bribe most editors into action. Biddle’s relentless assault only strengthened Jackson’s belief that the Bank’s influence was unhealthy and detrimental to a republican government. In truth, money and power are just two sides of the same coin. Consequently, where money gathers, power is soon to follow and where power gathers, money is soon to follow.

The Bank’s  Advocates

Daniel Webster, the famed lawyer and presidential contender from New England, championed the Banks cause, becoming one of the Bank’s most virulent supporters. Ironically, although Webster had originally opposed the Bank’s charter, he found Bank religion when Biddle offered him a healthy legal retainer to aid in the re-charter movement. In the midst of the Bank battle, Webster wrote the a revealing 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 the champion of the statists American System, Henry Clay, supported the financial-elites in their fight against Jackson as perks, power, and recognition were sure to follow with the Bank’s blessing. Webster, in fact, launched a lengthy attack on the Jackson’s policies, blasting his veto of the Bank. Biddle, in addition, bought other influencers in Congress to oppose Jackson’s measures, dividing Jackson’s supporters into two camps. The first group desired the President to yield on the issue, hoping to maintain government decorum. The second group, in contrast, encouraged the President to finish what he started and end the unholy alliance between Big Banks and Big Government. Jackson’s popularity suffered from the steady stream of paid propaganda unleashed by the editors congenial to Biddle’s financial largesse. Indeed, numerous diatribes against Jackson’s policy permeated the press on a weekly basis.

Bank Declares War on Economy

Despite the funded politicians in Congress and rabid press editors willing to do Biddle’s bidding, he still stored one more ace up his sleeve. Fearing that Jackson would remove the Treasury deposits from his Bank, starving the bank of the lifeblood of money necessary to maintain its special power base, Biddle declared 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.” Following through on his promise, Biddle launched a campaign of loan closures across America, causing financial panic among the state banks and business community. They were forced to either pay back their loans or collapse into insolvency. State banks and businesses screamed for relief, appealing to Jackson to end the Bank war and submit to the recharter. Misreading the President’s courage again, the bank and business failures only steeled Jackson’s resolve to end Biddle’s undue influence in the American economy. Moreover, many state leaders awakened by the inordinate power held by the Bank over the economy also recognized the truth of Jackson’s veto message. The President firmly 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 understood the role that money-interest can play in causing inflation and market cycles; unfortunately, this understanding seems lost on today’s politicians and our Federal Reserve System.

Author H. W. Brands, biographer of Andrew Jackson, discussed the Bank’s undue power of the purse, sharing Biddle’s money-influence over the Jackson government, “‘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.’” Clearly, Biddle was playing for keeps, understanding that money buys power and power produces money. Even in the midst of the Federal Government’s withdrawal of Treasury Deposits, Biddle 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.” Biddle appears to have succumbed fully to the corrupting effects of absolute power. His dictatorial thoughts, writings, and actions are on display during this stage of the war. He shared 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 truly believed, that by causing harm and suffering in America, he could control the political leaders of our country.

Andrew Jackson’s Resolve

In hindsight, had it been any other President besides Jackson, Biddle would have been right. Jackson, however, stood his ground and eventually won the Bank war, despite receiving many battle scars along the way. Re-elected in a landslide, Jackson proved that a person with conviction and character can stand his ground and win, no matter the size of the forces aligned against him. Boldly, 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 example demonstrates a leader’s powerful effect upon others. When a person has the courage to stand strong, he strengthens the spine of others who recognize the truthfulness of his fight between right and wrong. Courage, just like lack of courage, is contagious. Character is courage and integrity combined. Integrity is identifying what is right and courage is the ability to stand for truth even when it hurts. Jackson accomplished many things in his life, both militarily and politically. However, in my opinion, his finest hour was his courageous stand against the Second National Bank. May this generation of leaders display similar courage in today’s fight against tyranny.

Here is part one of a two part series on battle Andrew Jackson faced against the USA Second National Bank. What a powerful example of courageous leadership in action. The Mental Fitness Challenge is a key part of any potential leaders plan to help in developing this type of courage and character. I am proud to say that the LIFE Business is filled with this type of leadership throughout its ranks.

Sincerely,

Orrin Woodward

Andrew Jackson

Andrew Jackson Slays Multi-Headed Monster

Andrew Jackson, when he was right and when he was wrong, was always a man of strong convictions. He stood by his love of liberty even when it hurt him politically to do so. It takes courage to stand by one’s convictions, especially when a person is offered peace and financial rewards to surrender them. Courage isn’t the absence of fear; rather, it’s the acknowledgement that one’s principles are bigger than one’s fears, regardless of the consequences.

In today’s “situational ethics” society, principles are sold out for pragmatism, making courageous stories like Andrew Jackson’s as rare as gold-backed currency. Consequently, much could be learned by the study of Andrew Jackson’s stand against the “moneyed interest” drive to re-charter the Second National Bank. Indeed, through reading Jackson’s battles against the Bank, one yearns to find leaders with similar backbones to break  the Federal Reserve monopoly on America’s money. Let’s examine this historic battle between the President Andrew Jackson of the United States of America versus President Nicholas Biddle of the Second National Bank. Several questions come to mind. First, what are the leadership lessons learned from this historic struggle between the statist and anti-statists philosophies of money? Second, how do the lessons from Jackson’s battle apply in today’s battle for monetary freedom?

Inflationary Policies

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 though 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.

Big Banks Marry Big Business

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.

This 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 American Treasury Department, 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.

Nicholas Biddle versus Andrew Jackson

Biddle and Jackson were opposites in upbringing and temperament. The former, a scion of a high-society Philadelphia family, did not like the rough and tumble behavior of the American political process. Choosing to avoid the masses, he preferred instead to do his work behind the scenes. Jackson, on the other hand, loved the volatile political process and was elected by the populist mass of voters across America. No two people better contrasted the opposing viewpoints in the American political arena. One, a believer in wealth and privilege for the chosen few; the other, an equal opportunity for all to rise based upon merit. Jackson shared his disdain for the Bank in his first Presidential message proclaiming, “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, however, seemingly unconcerned initially, responded to Jackson’s message with a cool indifference. He wrote of Jackson, “They should be treated as the honest though erroneous notions of one who intends well.”  Clearly, Biddle did not believe Jackson had the courage or fortitude to fight against the entrenched money-interest feeding off America’s body politic.

Biddle quickly discovered that Jackson’s courage was even greater than his rhetoric, when he confirmed Jackson’s intentions to end the Bank’s charter. Undaunted, he quickly rallied his political supporters to his cause. Two of the biggest and brightest political stars, Henry Clay and Daniel Webster, were enlisted by the Bank in support of the recharter initiative. With Clay and Webster’s help, the Bank moved for an early renewal of its charter, hoping to force Jackson’s hand before his second term election. Jackson, the moneyed-interest believed, would not risk his re-election on a veto of the Bank’s charter. Once again, the special-interest elites had underestimated Jackson courage. The Bank bill, with Clay and Webster’s support, passed both houses and arrived on Jackson’s desk for approval. Most people would have bowed to the “inevitable” and approved the bill to ensure his re-election; Jackson however, was not like most people. In his historic veto address, Jackson declared war on the wealthy aristocracy attempting to subvert the American Republic.  His veto address should be read by everyone concerned with freedom and equality of opportunity. Jackson, in part, stated:

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.

To be continued in the next blog post.