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The planter, the farmer, the mechanic, and the laborer... form the great body of the people of the United States, they are the bone and sinew of the country men who love liberty and desire nothing but equal rights and equal laws. —Andrew Jackson
“My vow shall be to pay the national debt [and] to prevent a monied aristocracy from growing up around our administration that must bend to its views, and ultimately destroy the liberty of our country. —Andrew Jackson

In 1791, the first “national” bank was created in the United States. It was supposed to manage the currency of this country fairly and for the benefit of all U.S. citizens. Thomas Jefferson, however, saw the central bank as an undemocratic tool of the private bankers in the Northeast United States. [3@10:45]. It was dismantled after it's 20 year charter expired.

In 1816, the government created the Second Bank, and prior to his becoming president, Andrew Jackson came to see the Bank as a dangerous institution that had to be taken apart.

Bank Monster, HydraJackson called the Second Bank a multi-headed “hydra” [citation], and a “monster” [1@4:40] [3@11:07] because it gave too much power to private bankers who created it. They used it serve their own interests rather than those of the country as a whole [1@4:10]. The Second Bank had also installed it's people in many parts of the Federal government. The Bank had learned how to use it's money to control politicians by financing their elections or maintaining them in office with payments [2@0:23][1@4:45].

Jackson could also find no provision in the Constitution for the private bank and thus denounced it on Constitutional grounds as well. [1@4:02]

The power that Jackson despised most in the Second Bank was it's ability to manipulate the value of the dollar as it wished. [1@4:30]. At times, the Bank would “inflate” or increase the amount of money in the system. This would cause a boom in the country because interest rates would fall, and the lower credit costs encouraged businesses to start up. Then later, the Bank could raise the rates. The higher costs would eat into the profits and cause the failures of business and of others who had made commitments based on the lower interest rates. [3@11:22]

On November 29, 1828, Andrew Jackson was elected into office [2@0:32] and he took the oath of office on March 4, 1829. [1@0:44] He had a list of goals for his term. On it were his desire to eliminate the national debt, eliminate the Second Bank and do away with the paper money that could be manipulated. [1@2:04]

His first action as a new, first-term president was to fire 2,000 of the 11,000 Federal employees who he recognized as servants of the Second Bank. [2@0:58].

In 1832, as Jackson's reelection approached, the Second Bank played political hardball. [2@1:10]

Nicholas BiddleNicholas Biddle, the head of the Second Bank, had been fully aware of Jackson intentions from the start. Working with Senator Henry Clay, an opponent of Andrew Jackson on other matters, Biddle hoped to lure Jackson into a political trap. They would ask Congress to extend the life of the Bank, years before the extension was required. [1@5:17] [2@1:19] They, in effect, gambled that Jackson would sign the extension because of the belief that the bank was of too important to not be renewed. [1@5:36] If Jackson vetoed the bill, Clay and Biddle hoped that it would cost Jackson his chance at a second term. Jackson recognized the dilemma he was given. [1@5:56]

Jackson vetoed the renewal bill anyway [2@1:29] [4] and the Bank became the central issue of the 1832 election [1@6:43]. Jackson took the matter directly to the American people. For the first time in U.S. history, an American president took his presidential campaign on the road. His campaign slogan was “Jackson, and no Bank.” [2@2:54]

Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence... would be more formidable and dangerous that a military power of the enemy. —Andrew Jackson[2@2:07]

The national Republican party ran Henry Clay against Jackson, and the banking establishment spent over $3 million to promote him [2@3:15]. During the campaign, Clay portrayed Jackson as “King Andrew I”, a despotic king who trampled on the Constitution [1@6:56]. (Being called a “king” was derisive at that time because Americans still remembered the lives lost during America's war for independence from King George of England.)

In spite of the distortions, Jackson's message appealed to the American voter and he won by a landslide in 1832. [1@7:08] [2@3:21]

Jackson ordered his Treasury secretary to move the nation's money from the Second Bank to the state banks. [1@8:13] [2@3:42]. Louis McLane, his new Treasury secretary refused to do so, so Jackson fired him and put in William J. Duane. Duane also refused, so Jackson fired him and appointed Roger B. Taney. Tayne complied and the money was moved. [2@3:42].

Biddle, the head of the Second Bank, used his influence to get the Senate to reject Taney's nomination [2@4:28].

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. —Nicholas Biddle

Biddle also threatened to cause a depression if the bank was not rechartered. He would make money scarce and choke off business unless Congress restored the bank. [2@4:34]

Nothing but widespread suffering will produce any effect in Congress... Our only safety is in pursuing a steady course of firm restriction – and I have no doubt that such a course will ultimately lead to restoration of the currency and the recharter of the bank. —Nicholas Biddle

Biddle made good on his threat by pulling money out of the economy. He effectively raised interest rates, recalled old loans, refused to issue new loans and increased foreclosures. This amounted to an attack on small businesses. [1@7:53] [2@4:54] [2@5:46]

And Biddle's plan worked well. A financial panic resulted followed by a deep depression. Biddle blamed the resulting crash on Jackson's move of the country's money to the state banks. [2@5:56] Wages fell, unemployment and bankruptcies went up. The nation was in an uproar and newspapers blasted Jackson in editorials [2@6:09].

Congress assembled “The Panic Session” and Jackson was officially "censured" or publicly reprimanded by resolution. It was the first time a President had ever been censured by Congress. [2@6:41].

Jackson lashed out at the Second Bank.

You are a den of vipers! In intend to rout you out, and by Eternal God, I will rout you out! —Andrew Jackson [2@7:01]

The tide began to turn on Biddle. The governor of Pennsylvania came out in support of Jackson and against the Second Bank. And, Biddle had been caught boasting in public of his plan to crash the economy [2@7:26].

The House of Representatives voted 134 to 82 against rechartering the bank. In addition, an even greater number voted in favor of an investigative committee to determine if the Second Bank had caused the crash. [2@7:44]

When presented with a Congressional subpoena for the Second Bank's documents, Biddle refused to provide them. He also refused to release letters between the bank and Congressman on loans and advances made to them by the bank. He also refused to testify before the committee in Washington. [2@8:01]

On January 8, 1835, Jackson made the final payment on the National Debt. He was the only president in American history to have ever made the United States debt free. The U.S. had been freed from the central bank. [1@8:50] [2@8:23]

Three weeks later, on January 30, 1835, an assassin named Richard Lawrence tried to kill Jackson. Both pistols Lawrence was carrying had misfired. Lawrence was later found not guilty for reason of insanity. [2@8:44]

The following year, the Second Bank ceased operation. Biddle was later arrested and charged with fraud. He was tried and acquitted, but died thereafter while still tied up in civil suits. [2@9:10]

Jackson success was so permeated politics that it took 77 years before private bankers could form another central bank, the Federal Reserve. [2@9:38]

When he was asked what his greatest accomplishment was, Jackson responded “I killed the Bank.” [2@9:51]

Jackson had believed that the government should live within it's means, just as an ordinary household should. [1@9:05]

Quotes

As long as our government is administered for the good of the people, and is regulated by their will; as long as it secures to us the rights of persons and of property, liberty of conscience and of the press, it will be worth defending.
Americans are not a perfect people, but we are called to a perfect mission.
It is to be regretted that the rich and powerful too often bend the acts of government to their own selfish purposes.
Never take counsel of your fears.
One man with courage makes a majority.
The brave man inattentive to his duty, is worth little more to his country than the coward who deserts in the hour of danger.
Fear not, the people may be deluded for a moment, but cannot be corrupted.

Personal Concerns

Political attacks

Censure

Assassination attempt

Proposed Solutions

This profile contains historical information. There are no "solutions" but there are some observations.

Must-see Resources

  1. Video: Andrew Jackson Kills the BANK (9 mins, 31 secs)
    URL: http://www.youtube.com/watch?v=Knf8KA5aAjw&NR=1
  2. Video: The Money Masters - Andrew Jackson (Pt 16)
    URL: http://www.youtube.com/watch?v=rqkxttD-j0Q
  3. Video: Money, Banking and the Federal Reserve (February 22, 2006)
    URL: http://www.youtube.com/watch?v=iYZM58dulPE

  4. Document: Andrew Jackson's Veto Statement [July 10, 1832], Yale Law School
    URL: http://avalon.law.yale.edu/19th_century/ajveto01.asp

Added December 15, 2010 Posted December 27, 2010 Revised (n/a)

This is my opinion. It's a work in progress. I hope it's helpful.

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