tv The Presidency Andrew Jackson the Bank War CSPAN December 28, 2017 4:09pm-5:14pm EST
daily, in 1979, cspan was created as a public service by america's public service companies and is brought to you today by your cable or satellite provider. >> next on american history tv, a historian revisits president jackson's bank war of the 1830s. a challenge to the country's only financial institution. the white house historical association hosted this hour-long event. #
>> welcome to everybody. we're delighted to have you here. i'm dr. curtis sandberg, the director of the national center for white house history and i have this long title. i'm concurrently the association's senior vice president for educational resources. i would like sort of con textually put this all into a nice picture. shear background about the association and then that places tonight's talk into a proper context. we are, and some of you may know already we're a private non-profit educational organization. the mission of the place and it has been for a long time is to enhance the understanding and appreciative of the executive mansion. a long, long time means 56 years at this point. it's 1961. this is during the kennedy administration, and first lady jacqueline kennedy founded the association and its purpose was to help the white house to collect and exhibit the very best of american history and culture, but underscoring all of that, to inform and excite the public about the history of the executive mansion. so today, fast forwarding all these years, we're still doing this. acquisition, preservation, research, education efforts that continue through the sale of our books, our products. i'll tell you more about that in a sec. the official white house
ornament which some of you may know as well. and then also in recent years from private and corporate donations. to strengthen our goal, the overarching goal to widely share white house history with the public, last year we created this lecture series. its purpose is to bring, pointing at dr. feller over here well-known authors and historians to the association to share their knowledge and insight with the public and to humanize the white house, its inhabitants there and things that happen there. we're delighted to have professor feller with us tonight to speak about andrew jackson and the white house but also the origins and the events and the enduring legacy of jackson's bank war and then taking that a step further, the impact of that on the role of the president in later generations. it does bear noting because we do anniversaries. i was thinking through the lecture series that 2017, this year is also a benchmark because jackson was born in 1767. so that makes it 250 years.
that one, that box is being checked, as well. before turning the podium over, it's important to share a few salient elements about his really impressive and far reaching background. he's a professor at the university of tennessee and he will tell you more about this momentarily. he's also the editor of the papers of andrew jackson. and on the sort of curriculum part, prior to joining the tennessee faculty, he was in a pretty unique place, the university of new mexico, albuquerque and before that, at northland college until wisconsin and his connection with the papers of andrew jackson goes all the way back in time to that period. he has contributed to numerous historical publications. we wen over this together. the new oxford university press volume which is a very cool title called "when life strikes the president." his critical essays and articles have appeared in many, many scholarly publications and he's been on television shows.
he's been on many shows including "history detectives," "who do you think you are," and cnn's race for the white house. he continues to carry out scholarly research that contributes in terms of all of us to our understanding and appreciation of america's history. now in closing, a little tiny moment of bookkeeping. i think some of you may have gotten these on the way in. we're offering the association a 10% discount on everything over there in the store. it's going to be open till 6:00. it encompasses the totality of the event. there is this wonderful andrew jackson ornament and it comes in a boxed set. there are a couple others that come with it. that's a thought, as well among our many, many white house christmas ornaments.
on that note, please join me in very warmly welcoming professor daniel feller. [ applause ] >> thank you, curtis. and thank you all for being here. for me, this is a very timely visit as curtis said, i'm the editor of the papers of andrew jackson. at that project, we are publishing all of his papers, at least all the surviving ones in chronological order. and our last volume covered the year 1832. i'm going to draw on that in what i tell you in a few minutes. in 1833, which is the year we're working on now as it happened just last week, i was sitting at my desk editing and preparing for publication the letters that susan key indicator limping in the decatur house wrote to jackson in may, 1833 saying we just auctioned off all my furniture and i'm still broke. would you buy for me out of charity all of my tableware and silver and plate which jackson did and then went down to the hermitage.
i'm not sure where the stuff is now. anyway, my suggest today is president andrew jackson's bank war but i'm going to begin by asking a favor. you have perhaps heard or read something about jackson of late. he's been very much in the news. and that something may have left an impression in your mind about his character and presidency. please put it aside because it may be wrong. we seem to be engaged today in a kind of public war on many fronts between loud fictions and quiet facts. and at least in jackson's case, the fictions seem to be winning. they come from all sides, everyone from the president of the united states and his acolytes at one side to his severest critics on the other have joined in propounding an image of jackson as a kind of bumpious cowboy in the white house.
an image that lies somewhere between tangentially misleading and plain false. as example, president trump at the hermitage laying a wreath on jackson's birthday for the 250th anniversary said that tough guy jackson laid tariffs on foreign imports. the truth of that is exactly the reverse. the national review called a highly nationalistic even menacing presidential address on foreign relations a few weeks ago in its words a very jacksonian speech. there was nothing whatsoever jacksonian about it. on the other side of the political fence, an "atlantic magazine" cover story declared that jackson fought at least 14 duals. "newsweek" magazine not to be outdone upped that number to 100, 100 duals. you know how many duals andrew
jackson actually fought? one. count them, one. "the new york times" declared a little while back that jackson and this is its forward, annihilated the southeastern indians. not expelled, not deported. not evicted but annihilated which last i looked at a dictionary meant he killed them all. to top it all off just days ago, a "washington post" senior national security correspondent named karen de younging in an article about presidential insults or political insults reported that jackson said to his vice president, john c. calhoun, if you secede from my nation, secede your head from your body," which is charming and completely false, fake. even jon meacham's "time" magazine special issue on jackson which is otherwise very good concludes with a page of bold quotations several of which are dubious or just plain madeup. and one of the madeup ones is the very first one on the page,
take time to deliberate but when the time for action arrives, stop thinking and go in. we are in short regrettably bombarded from all sides by fake history on andrew jackson, much of it going to suggest that jackson as president was impull sib and uncontrollably violent. now, i'm not here to defend jackson. but i am going to tell you a story which i think challenges that perception, one that is closely grounded in contemporary sources, the ones that i work with, especially in jackson's own surviving papers. in other words, a story that is, to the best of my knowledge, actually true.
on july 5th, 1832, martin van buren, who had been jackson's secretary of state and now is his running mate in the 1832 presidential election, arrived at the white house at midnight. he had just the day before that landed in new york city after almost a year abroad and he had rushed down to washington and one day at jackson's urgent summons. he found the president sprawled out on a sick bed and jackson took his hand and said, and these are van buren's words describing it, with the clearest indications of a mind composed and in a tone entirely devoid of passion or bluster, he said, the bank, mr. van buren, is trying to kill me. but i will kill it. well, van buren first told this story many years later in his auto biography and explained had he kept it secret till then for the fear that in his words casual hearers would misinterpret it to mean jackson had acted against the banking from again van buren's words offended personal feelings, which van buren said was without the slightest foundation in truth.
well, van buren was right to worry because from his day to our own, andrew jackson's destruction of the bank of the united states has been denounced by critics as reckless and vin dicktive, an act of private peevish spleen for which the nation was made to pay dearly. calling for jackson's eviction from the $20 bill in 2015, by the way, i have no opinion on that, no opinion on it. they want to change the faces, that's fine with me. but calling for jackson's eviction, "the new york times" charged him with wantonly and outrageously destroying the bank which was after all as the "times" pronounced a predecessor of the federal reserve. now, i'm not going to try to convince you that killing the bank was wise. i'm not sure that it was. i'm going to try to persuade you it was by no means hasty or impulsive and that the concerns that motivated were far from merely personal. at the heart of jackson's so-called bank war were issues that were serious and weighty, serious and weighty then perhaps serious and weighty still today. so let me begin by setting the stage. in 1816, congress had chartered or incorporated the second bank of the united states for 20
years. till 1836. remember that year. the bank was headquartered in philadelphia with power to establish branches wherever it wanted to. by 1832, four years before that charter was going to run out, the bank had 25 branches in 20 different states and the district of columbia. the bank's capital stock was set at $35 million. at a time when the annual entire federal budget was about $20 billion. the bank was neither simply a private concern nor was it an arm of government, but it was a hybrid of both.
the united states owned one-fifth of its capital stock, $7 million, and the president of the united states with senate consent appointed five of the bank's 25 board members of the board of directors. the bank was to be the federal government's own banker. it performed some of the functions of today's federal reserve and also some functions of today's treasury department. it brokered federal loans, received stored, transported and paidout government funds, and it issued bank notes which were the country's only legal tender paper currency. but the bank was also with all of this a commercial business. it loaned money in competition with other banks. it made profits, and it paid dividends. clothed by its charter with, and these words are in the charter,
exclusive privileges and benefits, operating throughout the land when every other bank in the country was confined to a single state and most of them to a single city, at a time when the treasury department itself consisted of a few dozen washington clerks and scatterings of custom offices throughout the country, the bank of the united states was literally the only national financial institution in the country. it held immense power over the functions of government, the solvency of other banks, the stability of the nation's economic system, and the welfare of the citizens. well, this mix of private and public and the banks organization had been a deliberate feature of alexander hamilton's design for the second bank of the united states's predecessor. >> the first bank of the united states which had already been chartered for 20 years from 1791 and allowed to expire in 1811. and hamilton deliberately mixed public and private interests in the bank because he thought it was necessary to fortify confidence in the soundness of the new government's finances. but by the time andrew jackson took the inaugural oath in 1929,
the ability of the united states and willingness of the united states to pay its bills which is what hamilton was concerned about was no longer in question. and the bank's hybrid private/public nature stood out as we shall see for other reasons. now, the origins of jackson's hostility to the bank are obscure. they are sometimes attributed to my mind a very unpersuasively to an early financial disaster of his own where he had been burned by endorsing another man's bad notes. jackson purportedly said during his presidency that he had always opposed all banks. but as we have learned in the jackson papers, jackson had a notoriously pliant memory and a pronounced habit of believing he had always believed what he happened to believe at the current moment. there were at any rate plenty of good reasons to distrust banks.
banking was not in the early republic as we hope it is today, a staid and upright profession operating on well-known principles and accepted standards. it was at best a half understood, half mysterious trade and at worst, banking was something close to a con game. bank charters were produced from state legislatures throughout the country through political influence, often the people seeking those charters were not men with money to lend but in pen cunious and ambitious men who wanted to create banks so they could borrow from them. the hard capital with which banks supposedly started was often fictitious kissing of ious with the idea you would be able to redeem the ious from the profits that the bank would make after you set it up. self-dealing among bank officers was routine, corruption not uncommon and failures were
frequent. even the second bank of the united states itself chartered back in 1816 had begun its career with a spree of speculation, embezzlement and fraud by 1820 had brought it to the edge of insolvency and required a wholesale purge of its management. given what we know of thomas jefferson's politics, it would be no surprise to learn that he condemned all chartered banking as, and this is a quotation, a sacrifice of public and private interests to a few aristocrat cal friends and favorites. except that jefferson didn't say that. the man who said that was jefferson's federalist opponent and later friend federalist john adams of massachusetts. bank of the united states kept a low and competent profile through the 1820s under the deft management of its president, a man named nicolas biddle. it was not an issue in the
storied 1828 presidential campaign when jackson defeated the son of old john adams, john quincy adams. and jackson said nothing about it in his inaugural address march 4th, 1829. the first inklings of trouble came afterwards when reports reached jackson that certain branches of the bank had tried to wield their influence against him in the 1828 election. again, he heard about this afterwards. now, given jackson's sense of grievance over that election, an election in which jackson believed and these are all his words, the virtuious yeomanry of the united states had sustained him against more jackson's words all the tore renes of slander, the corruption and wickedness could invent circulated through
subsidized presses in every way inspired by the patronage of the government. given that sense, if you look at the election that way, learning that the bank of the united states was part of that torrent of wickedness and abuse would be enough by itself to set you off against it. already by 1829, june of 129 he would have been president all of three months, jackson was writing friends that the only thing that can prevent our liberties to be crushed by the bank and its influence would be to kill the bank itself. well, jackson challenged both the constitution alt and the efficacy, the financial efficacy, the competence you might say of the everything of the united states in his first annual message to congress in december, 1829. this attack came out of the blue and startled his audience, went against the advice of several members of his cabinet. jackson got backing from his confidential inner circle, including a treasury auditor and presidential wordsmith named amos kendall.
and the district attorney whom jackson appointed for the southern district of new york, named james a. hamilton who was martin van buren's political sidekick and also as it happened a son of the former secretary of the treasure -- treasury secretary alexander hamilton. the language of jackson's official criticism of the bank in his first annual message was somewhat restrained but his private words were not. he wrote hamilton that he was being opposed by, these are jackson's words, all the sordid and interested who prize self-interest more than the perpetuity of our liberty and the blessings of a free republican government. he was opposed again by this moneyed aristocracy preparing for renewal of its charter which i view as the death blow to our liberty. well, jackson asked hamilton for a plan for a government-owned institution to take over the
official functions of the bank if he should kill the bank itself. hamilton gave him one, a plan for a government substitute early in 1830, beginning with a bill of particulars against the existing bank of the united states. and that bill of particulars was under two headings. one, it's unconstitutional. two, it's dangerous to liberty. and the text under dangerous to liberty began with this. because in the number wealth and standing of its officers and stockholders, in its power to make loans or withhold them, to call oppressively upon its debtors or to indulge them, to build houses, to rent lands to, make donations for political or other purposes, the bank embodies a fearful influence which may be wielded for the aggrandizement of a favorite individual, a particular interest or a separate party. two, because it concentrates in the hands of a few men a power over the money of the country which may be perceived, may be perverted, i'm sorry, to the
oppression of the people and in times of public calamity to the embarrassments of the government. this is what alexander hamilton's son thought of the bank of the united states. well, jackson kept a private memorandum book in which he jotted down occasional notes to himself, usually a few lines or less. short things. into this private memo book, he copied hamilton's entire memorandum on the bank six and a half pages long. parts of it are traceable in jackson's own veto of the bank of the united states two and a half years later. well, in january, 1832, four years before its charter was due
to expire, you remember in 1836, the bank formally applied to congress for a renewal. now, this timing was not accidental. a presidential election was coming up in the fall. jackson had declared against the bank now in three annual messages his opponent for the presidency in 1832, henry clay, was as advocate for the bank. and clay and biddle, president of the bank who were in communication with each other calculated that the bank was oh obviously indispensable to the country that jackson would not dare to veto a recharter. and if he did, they'd make an issue out of it in the campaign. well, some of jackson's counselors even within his own cabinet favored rechartering the bank and that has fooled historians some of them into thinking there was possibly some compromise that could have been worked out.
but the evidence of jackson's papers problems otherwise to paraphrase charlton heston who made a career out of playing andrew jackson in a whole string of movies, the only way jackson was going to sign a recharter bill was with a pen inserted into his cold dead fingers. well, in fact, jackson drawing on ideas that he had been gathering for more than two years had started assembling materials for veto the minute the recharter bill landed on the floor of congress. in june of 1832, he gave them all to amos kendall. who was jackson's best wordsmith. and kendall after a few weeks gave back to jackson a closely written draft for a reit toe 59 pages long, just as the recharter bill finally passed congress and was presented to jacksoning with deliberate timing on july 4th, 132. well, roger twaney and yeah,
this is the same guy jackson later appointed chief justice of the supreme court and is now forever branded as the man who delivered the dread scott decision, at this time, he was jackson's attorney general. and he has left us a picture of what came next. jackson wanted someone to work over kendall's draft. antawny who had been urging jackson to veto all along, was the one member of his cabinet who was in favor of vetoes the charter, twaney was the only one jackson thought he could trust. for a company, jackson had living with him in the white house a professional artist named ralph e.w. earl who had painted landscapes and historical scenes and any number of portraits of jackson himself. if you've seen a portrait of jackson, it's almost certainly
an earl portrait. did hem over and over again. so earl had converted one room in the white house, unfortunately i don't know which, converted one room in the white house into a studio and that is where twaney and the president's nephew and private secretary andrew jackson donaldson set themselves up to work. they spent, according to twaney, three days going over kendall's draft. jackson himself would occasionally wander in, approve a passage, make some suggestions and go back out. over the entire time, earl was painting away, paying absolutely no attention what soever, completely oblivious. as we know from this draft because the draft survives and we printed it in the last volume of the papers of andrew jackson, and as we know from that draft, most of twaney's revision
consisted of simply crossing things out. if you take in kendall's original 59-page draft and leave out all the crossouts what's left is the bank veto will word for word in final form. by the way, we printed with all the crossouts there. so you can see what was crossed out. in particular, kendall wandered off into a whole bunch of rants against the british moneyed ar ris tocracy. they took all of those out. in final form, in final form as jackson delivered it to congress on july 10th, 1832, the bank veto is a hodge pong of arguments. some constitutional arguments. some financial arguments. some historical arguments, some nationalistic arguments, nationalistic and even xenophobic, some arguments that are rather weighty and some rather silly. but it's most an arresting and enduring passage was this from
the bank veto, july 10th, 1832. it is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. 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 under take to add to those natural and just advantages, artificial distinctions to grab the titles gratuities, and exclusive privileges, remember that language is in the bank charter, exclusive privileges, to make the rich richer when the laws undertake to make the rich richer and the potent more powerful, then 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. no president before had said anything like this. other presidents had warned
americans against entangling foreign alliances. they had warned americans against sectionalism and excessive partisanship at home. jackson warned them against control of their own government by, in his words, the rich and powerful. the language was unprecedented and in some eyes unpresidential. martin van buren called the veto message in his words the most effective document amongst the people that was ever issued under like circumstances. nicolas biddle, president of the bank of the united states called it a manifesto of anarchy such as marot or robespierre might have issued to the mob. well, the veto didn't end the
war. it just escalated it. the bank still had four years to live under its original charter. it was still rich. still powerful and still it bent on recharter. it had in fact stayed out of politics down to this point which nicolas biddle rather dubiously claimed, it dropped that forbearance after the veto about a vengeance. in the 1832 presidential contest the bank campaigned openly for henry clay and against jackson, spent thousands of dollars on loans to newspaper editors and congressmen, and on publications. opposing the bank veto including one scurrilous piece which biddle wrote himself in which he called jackson a miserable dotard. love that word. these expenses were recorded on the bank's books which were
subject to treasury inspection. recorded on the bank's books under the innocuous heading of printing and stationery. and as jackson himself noted since the united states owned one-fifth of the bank's stock, this campaign to sway government policy and to defeat a president was, in fact, being waged with the governments or rather the people's own money. well, the campaign, biddle's campaign failed. jackson was overwhelmingly re-elected and the bank's fate was sealed. but another episode that played out simultaneously with the campaign helped convince jackson that he could now not wait patiently for the bank to wrap up and go out of business in 1836 that it needed to be defanged, stripped of power to do further damage right now. and that affair concerned the so-called 3%s, the 3%s were outstanding government bonds held largely by british and
european investors representing nearly the last of the federal debt. early in 1832, jackson's treasury secretary louis maclean notified biddle of the government's intent to redeem most of the 3% with government funds ample to that purpose which were on deposit with the bank of the united states. the united states in fact, had somewhere around 7 or $8 million in its account at that time just sitting there with the bank of the united states. they were going to redeem about $6 million worth of 3%s. biddle requested a three-month extension from july until october. he then arranged with the bank's core responding house in britain, bearings of london, arranged with bearings to buy up the foreign held debt certificates and hold them for redemption later on. with the bank paying the regular interest in the interval. i realize this is a little complicated. took me awhile to anything out
what was going on myself. from a banker's perspective, this spreading out of redemption was smart because if biddle didn't do this, the bank would are to make a massive cash payment all at once all of it in species, gold and silver, and to do that, it would have to curtail its business, call in its loans thus threatening commercial stability at a time when financial markets for other reasons including a cholera epidemic were unusually vulnerable. everything worked. the bondholders still got paid. they just got paid a few months later. the government suffered no loss. business of the country went on without a ripple of disruption. everybody won. that's not how it looked to andrew jackson. for this reason. biddle had handled the whole transaction through the bank's exchange committee. which was a personally hand
picked subcommittee of the full board of directors on which none of the government directors sat. remember the president of the united states appointed five of the 25 directors. and the exchange committee conducted its operations in strict secrecy. not only secrecy from the government but from the other members of the board of directors. in fact, it was only after the operation was complete that the treasury even learned it had gone on. another thing about the operation was that the way biddle arranged it violated some of the terms in the details of the bank's charter. it became known publicly accidentally and at that point biddle publicly repudiated it after it became known what he was doing. until that point, the government knew nothing whatever about any of this. what it then learned after the fact was that although it had ample funds on deposit in the bank to redeem the last of the
debt, and had ordered it redeemed, months later, the bond holders were still unpaid. the government was still liable to them, and the bank still had the money. well, above all else, it was this apparently brazen violation of law and trust that prompted jackson and his advisers to question not only the bank's honesty but even its solvency and jackson in 1833 ordered the removal of the deposits, that is to stop using the bank of the united states as a government depository, draw down the government's balances in the bank and deposit its money from now on in whatever state chartered banks could be found that would be willing to take them. stripped of the government funds in its vaults, the bank's ability to wage war against the
government would be drastically curtailed. well, under the bank's charter, the man who had legal authority to remove the deposits was not the president of the united states but the secretary of the treasury. who for this purpose was a kind of quasi autonomous agent. much to jackson's astonishment, his new treasury secretary, william john wayne appointed for exactly this purpose, balked at ordering the remove of the deposits. so on september 13th, jackson convened had his cabinet and read a paper stating it as his decision upon his responsibility to remove the deposits starting october 1st, which was just two weeks away. dwayne still didn't get the message or rather he got it but refused to heed it. he refused to sign the order removing the deposits and so on september 23rd, a monday, not a saturday, jackson fired him. and replaced him with roger twaney. previously the attorney general. that was on september 23rd.
on september 26th, three days after his appointment, twaney signed the order to remove the deposits starting october 1st. all this is being done while congress is out of session. in december, a new congress convened. jackson then controlled the house but they were in the minnesota in the senate. so that's where the action took place. the senate began by officially demanding to see that paper that jackson had read to the cabinet back on september 18th. now, this document was the opposite of secret. it was meant for public view. it was meant to explain jackson's policy not only to his cabinet but to everybody else and it appeared in the newspapers the day after jackson read it to the cabinet. but invoking what today would be
called executive privilege when the senate called for it officially, jackson responded politely that what he told his cabinet was none of your damn business. on march 28th, 1834, the senate voted by 26-20, and this is the language of the resolution that it adopted -- that the president in the late executive proceedings in relation to the public revenue, has assumed upon himself authority and power not conferred by the constitution and laws but in derogation of both. it was, in other words, an official sensured. and that was the last time that the government has sensured a
sitting president. and they had meant to stand as a moral ekwquivalent of an impeachment verdict, but had done so without an actual impeachment vote by the house of representatives, there was no charges, there was no trial and there was no 2/3 majority which is what it really takes to convict someone, remember it was 26-20. these proceedings jackson quoted were palpably repugnant to the senate. it was, as jackson noted not directly doby the people. he didn't say i was, and i quote again, the direct representative of american people. well, the senate stood its ground. it branded jackson's protest as a breach of official privilege, refused to enter it on the journal, refused to acknowledge that it had been received and denied jackson's right to
officially challenge or criticize it in any way. but even this did not stand. now, in law it meant nothing but almost immediately, after the senate passed, a jacksonian from missouri named thomas hart benton, moved a resolution to expunge the censure, not expunge or repeal it, but literally cross it out. he introduced that resolution. it failed in 1834. it failed in 1835. it failed in 1836. but meanwhile, jackson men by now calling themselves democrats, were organizing with the expunging resolution as their rallying point and in state after state, senators who would not pledge to vote for the expunging resolution were either voted out of office by state legislatures or compelled to resign.
by state legislatures, i should add, acting on queue from the white house. the crowning triumph came january 1837, six weeks before the end of jackson's presidency the end of jackson's presidency. benton's exponlging passed. the handwritten manuscript journal was brought out and they crossed out the resolution. the clerk was ordered to draw black lines around it, as if it had never existed. meanwhile, the back of the united states finally healed and defeated. wound down its business. procured a new charter from the state of pennsylvania and continued as a state bank after 1836. within a few year, it got involved with speculations that went bad and closed its doors,
bankrupt and disgraced. what do we make of this? i know you were thinking what's the point. here's the point. some historians and especially economists, take a kind of instrumentalist approach to history and they fault jackson severely r for his actions in the bank war. they defend it as a modern style bank. they charge that jackson had no decent replacement and blame his use of state banks, which is where jackson put the money after it was taken out. blamed that for triggering a boom that ended with a crash, the so-called panic of 1837 that inturn ushered in a deep depression that lasted through the end of the 1830s and 1840s. all of this because they said of jackson's war on the bank. now all of these propositions can be and have been disputed.
the bank was not constructed like a modern bank. it's not clear biddle was operating it as such. the question of blame is ir resolvable because it lies at the end of a long chain of hypotheticals. what would had happened if jackson had not of removed the deposits or the bank of england had not raise ed interest ratesr if the chinese had not found a new way to finance their opium imports. the it's a major part of the argument. and you can go on down the list of what caused the panic of 1837. really we just don't know. now it is true that jackson had no ready substitute for the bank. using state banks as depositories was what was
frapgfrapg frankly dubbed an experiment and it would be fruitless to try to claim a sophisticated grasp of banking and finance. a famous historian said once of one of jackson's ideas for replacing the bank of the united states that and these are hammonds words, that it may be intelligible to those whose understanding has not been corrupt ed by some knowledge an experience of the subject. in other words, if you know anything about banking, you know that jackson doesn't. but a primitive understanding is not necessarily a false one. bankers then and dare i say today, shrouded their operations in a kind of forbidding mystery. let a president or a congressional committee inquire into them and the answer may be and this was certainly biddle's answer, a politely phrased
version of never you mind. we understand these matters. you don't. go away. leave us alone. but there can also be moments and i think we can all remember one a few years later when the bankers facade of omniscience collapsed and that dismissive tru trust, gives way to kind of embarrassed, oop. it's debatable in short whether the person who knows he doesn't fully understand a subject is worse off than the person who thinks he does and yet all this perhaps misses the point. jackson was not mainly concerned about the bank's efficacy as a financial agent. though we questioned that as well. his core concern was political. he thought the intertwining of government operations with wanging and corporate finance was inherently dangerous.
politically corrupting. a threat to democracy itself. he worriy eied about the presen within a republic of a financial institution so huge and powers so fortified by special privilege, that it could, even in defiance of the people's own will, run the country to suit itself. was jackson wrong to r worry about that? well, the actual conduct of the bank of the united states offers no reason. we can blame biddle for descending into politics and some have. but the fact was the bank's very nature is a congressionally chartered wielding monopoly official powers was inescapably political. as biddle himself remarked, when it came to loaning money to congressmen or newspapers, he
have damned if he did or didn't. it would look political any way. the bank made large loans to the washington printing house of gales and seton, publish eers o the country's leading anti jackson newspaper, the washington national sbel where she knows. biddle justified these loans as solid business transactions. they were made on good security. but part of that security was the anticipated profit from government printing contracts, which were awarded by congress on a party vote. so what message or lesson does the bank war leave for us today? i do not think as economists sometimes do, that it can confirm some policy pointers of any practical use. history does not repeat itself, at least not in any precise or predictable way. our sirkds now may resemble those of jackson's day in some
ways, but not no others and the differences matter at least as much as the similarities. the bank of the united states was indeed as the "new york times" said last year, a predecessor of the federal reserve. if you can imagine, the federal reserve is a privately controlled, profit-making, dividend paying shop run by the boys from enron. the lesson i think if there is one is broader and less specific. not so much a prescription as a cautious. speaking of governmental checks and balances, way back at the time of the adoption of the constitution, james madison in federalist paper number 51, famously said, these are madison's words. it may be a reflection on human nature that such devices, checks and balances in government, should be necessary to control the abuses of government. but what is government itself
but the greatest of all reflections on human nature? if men were angels, no government would be necessary. well, in 1829 in very first skirm rish between the bank of the united states and the jackson administration, biddle had repelled those accusations of political favoritism on the part f the bank in the 1828 campaign by telling jackson's treasury secretary that the 500 men who ran the bank and its branches were so disinterested that no loan had ever been made or refused in his word, on account of political partiality or hostility. ingham reply iing to this, challenged what we called bi biddle's assertion of history. he remarked that no institution could claim an entire exems from
the feelings and pat esh earns inseparable from human nature. jackson wrote in the margin opposite that. well said. and he underlined it. indeed, james madison and andrew jackson were saying the same thing. banks are but human institutions and whaile they like other such institutionings can be control and circumscribe d by checks an balances ultimately, they cannot be made more infallible than the people who run them. the ultimate question posed by the bank was thus the same as that posed by government itself. how could a system of finance and credit be created, which was sufficiently stable in uniform, to perform its necessary tasks pr properly, without becoming so
powerful, without that it would use its powers improperly and corruptly and ultimately, become a threat to the very citizens whom it was supposed to serve. that riddle confronted jackson and the bank in the bank of the united states, in the bank war. it still confronts us u today and that means that the bank, banks plural, the banks as well as the government, still bear watching. thank you. >> any questions? >> yeah. this was wonderful. we have a few minutes for questions before you go as well then we have a reception. through there is a hand held microphone back here with matt, our senior historian.
so any questions? don't leave us up here alone. there we go. have a taker. >> thanks. i have two questions. the first is simply what biography of andrew jackson woul you recommend for people looking for an accurate scholarly study. second, in holmes alexander's biography of van buren, he had suggested that van buren went along with jackson's bank policy, but didn't really believe in it. do you believe that was correct? >> let me answer the second one. first because it's easier. no. and who was the author? >> get another biography. would it help answer that to tell you that when jackson was colle collecting ideas for the bank veto, van buren was a willing contributor.
van buren was in fact not only not a supporter of the bank veto, but he had been pushing it on jackson from the beginning and van buren did write this postmousily published autobiography where he talks about how the bank veto was wonderful and van buren as president, when andrew jackson with was still kind of looking over his shoulder from tennessee from when van buren was president himself, he took the policy to the next level. since the state banks were an interim experiment, the next thipg to do is in the phrase of the time, divorce bank and state. separate out the federal government's financial arrangements so they have nothing to do with banks whatsoever. and set up something instead called the independent treasury. it was the leading policy. the leading policy of the van buren administration.
so he was 100% behind it. good biography. well, the best biography that i can recommend to you was published in 1860, and it's rather long. it's in three volumes. a, an early historian named james parton did a three-volume life of andrew jackson. and i still think the best, by the way, it's very critical of jackson. i still think it's the best biography. this is the biography if you've ever seen the famous phrase about jackson's ignorance was a wall around him. a high, impenetrable wall and they paced back and forth within the cage of his i guegnorance la chained panther. that comes from that biography. john meacham's recent biography
is a good read. i think it's better on kind of social atmosphere of the white house than it is on policy. it's not really a wonks biography. robert remini, who's just died a few years ago, he spent a career writing biographies of jackson. and frankly, they got sloppier as he went on. and so i think the first one, which is still out, which was written in the 1950s then later updated to include things he left out like slavery and indian removal. that one's, that one's still a good read and the updated version very good.
>> it's two-part. i don't know if it's really related. well, it is related. was there any commodity back in the currency back at that time? and the other question was what was the inflationary climate that the bank was being opened on? because i know as a precursor to federal reserve, so it wasn't interest rates as we know it today. >> it was a quote precursor of the federal reserve. inflation was not an accepted part of the economic system at the time. so there was inflation and there was at times, deflation. but when prices and values changed, the assumption was that something had gone wrong. now over a long period of time,
you can chart inflation, you know, an inflationary trend, but generally in the 19th century, when there was measurable inflation, things are more expensive this year than last year. it was when there was some disruptive event. like during the civil war. there was plenty of inflation. but the assumption of economicists at the time was that price, wages, values, ought to be stable. the first part of the question, yeah. it was a species bad currency. and i didn't want to get into bank notes because it takes a whole hour to explain bank notes and you know, and if you thought what i did say was less than exciting, you should hear that part of it. supposedly, the only real money
was gold and silver. species. and all, everything was was a rep sresentation. so what banks did when they got charters was that they allegedly had a certain amount of gold, of species in their vaults. they would issue ious from the cashier saying this thing is worth $10, you can bring it in and what the banks hoped is that not too many people bring them in at the same time because there was no deposit insurance and if you get a run on the bank, the bank folds. what often happened, there were some banks created where the species that was allegedly backing the paper money didn't exist. today, i think a modern economist would say well, it doesn't really matter.
what underlies the soundness of our currency today is everybody's faith in it. why is a $20 bill worth $20? it is because the government tells you so. as long as we accept that, it's worth $20 where ever you go. doesn't matter whether the it's a hypothetical gold piece behind it or not. that is a 20th century understanding of economics. >> one more question. >> this for you. wonderful. but i wonder at that time when they have election of president and then maybe some officials, in that environment, do they put just other issues for the bend into control our government? is it really an issue in the
election or it does all cover up and people don't know about it? >> no, it was a real issue. not, i could answer this in several different ways. was it a decisive issue? nobody can ever tell. the only thing you can tell at the end of a presidential election is that one person won. jackson himself believed that since he had remember the timing here, recharter bill passed congress in early july of 1832, jackson vetoed it, then the election was in november. jackson himself took that overwhelming re-election because it was overwhelming. he stomped henry clay pretty badly. as a mandate. in a modern word. and indeed, jackson's, you said over and over again, the people have spoken. this issue was before them.
if they didn't want me to kill the bank and proceed further against it, they would have v e voted me out of office and therefore i have been empowered to proceed further in killing the bank. if you read the newspapers at the time, the pamphlet literature of the time, the bank issue is all over it. it's bank, bank, bank, bank. were people also voting on other grounds? sure. >> this is sort of white house historical association comment, but as i said earlier in introducing dr. feller, one of our, in fact overarching goal is to bring scholars to bring professors, experts in the field, family members of presidents to the association to enlighten the public. what we've seen tonight, and thank you so much, dan, is to bring life into a moment in the 1820s and the 1830s that happened right over there and sort of right around the square
here, decatur house was here as well. there were people looking out the window talking in these rooms right over here while all this was happening. so please just really join me in thanking professor fellers for making this happen. coming up new year's weekend on cspan. saturday at 8:00 p.m. eastern. north korean refugees describe life under the kim regime. >> in china, however, tens of thousands of north korean defectors are leaving without papers. under the shadows and are being physically or sexually exploited. while the u.s. should continue urging china and russia to support more economic sanctions, it should also do more. to stop beijing repate rating defectors back to north korea. >> sunday at 6:30 p.m. eastern, james clapper on his career in
the intelligence community. >> we call that new paradigm immaculate collection. now i mean it semihumorously, but it makes a point about the difficulty of being so sis given the global interconnection represented by the internet, which is where efb communicates. and the diftty of sorting out you know, good people and bad people. >> and on monday, new year's day at 10:00 a.m. eastern, a tech fire summit on the self-driving revolution and at noon, former clinton officials on the legacy of president bill clinton. >> he knew who he was fighting for. he got there every day. he knew the people he wanted to help. and through thick and thin, when times were good and times were bad a, all he cared about was could he deliver for the people, the government. >> watch this new year's weekend
on cspan. american history tv continues with a look at andrew jackson's presidency. up next, hear from u.s. military academy history professor samuel watson. he presents talk titled the army before and after andrew jackson. the new york military affairs sim pose hosted this event. it's about an hour and 50 minutes. tonight's speaker is sam watten. at the united states military academy at west point, where he has taught for 18 years, he's author jackson's sword and peace keepers and