Nullification Crisis & The Bank War: National crises in Jackson’s Presidency

1. Nullification Crisis & The Bank War:National crises in Jackson’s Presidency

2. The Economies of the North and South • Economy of the North • Fishing, shipbuilding industry and naval supplies, trade and port cities • Skilled craftsmen, shopkeepers, • manufacturing (textiles, tools, metals, building materials, etc.) • Economy of the South • Large farms/plantations, cash crops (tobacco, indigo, rice, cotton), wood products, small farms • Slavery

3. The Debate Over Tariffs • Tariffs are taxes that the government puts on imported goods (Goods brought in from other countries). • Pro: If you were a craftsman or manufacturer in the United States, you would like tariffs because your products would not have that additional tax, therefore your products are cheaper than foreign products. People will be more likely to buy your products. • Con: If your business is agriculture, you need to sell your food and raw materials and buy manufactured goods. You may depend on foreign nations to buy your goods and in return you buy their manufactured goods. You are afraid that tariffs will make foreign goods more expensive. You worry that if you don’t buy their goods, then they won’t buy your farm goods and your economy will suffer.

4. The Nullification Crisis In 1828, Congress adopted an especially high tariff. Southerners called it the Tariff of Abominations. Jackson’s Vice President, John C. Calhoun of South Carolina, violently opposed the tariff. Calhoun had been a strong nationalist. But his opinion changed after the Missouri controversy of 1819 and 1820. John Calhoun This episode convinced him that the future of slavery, which he supported, required a stronger defense of states’ rights. Toward that end, he began to champion the concept of nullification. Nullification – Concept in which states could nullify, or void, any federal law they deemed unconstitutional. John Calhoun

5. John C. Calhoun • Vice President under Andrew Jackson • Believed the Tariff of 1828 was unconstitutional since it favored the North • Insisted that states had a right to refuse to follow a law if the state felt it violated its rights • States could declare a federal law null and void • This is called nullification, a rejection of the law • He and many other Southerners called the 1928 tariff a “Tariff of Abominations”

6. Nullification Ordinance South Carolina was not pleased with the new tariff either. They said it was oppressive, so the state passed the Nullification Ordinance Declared the Tariffs of 1828 and 1832 null and void Stated they would secede if the federal government used force to make them comply.

7. The Nullification Crisis In 1832, the South Carolina legislature nullified the protective tariff and prohibited the collection of federal tariff duties in S.C. Further, the state threatened to secede from the Union if the federal government employed force against South Carolina. Calhoun resigned the vice presidency and instead became a senator. I quit! In Congress, Daniel Webster of Massachusetts became the great champion of nationalism. In 1833, Webster led the way in pushing for passage of a Force Bill, giving Jackson authority to use troops to enforce federal law in South Carolina. John Calhoun Daniel Webster

8. Jackson’s Response Claimed secession would be considered treason. Defended the federal government’s power to impose tariffs and chastised South Carolina for violating federal law because a state had no right to declare any national law null and void.

9. Force Bill Jackson asked Congress to grant him the ability to use military force to compel South Carolina to accept and follow the law -- The Force Bill Meanwhile Henry Clay proposed another tariff in Congress that would reduce tariffs significantly over the next ten years – Compromise Tariff Both of these passed in 1833, and South Carolina repealed its ordinance.

10. The Nullification Crisis

11. The Nullification Crisis With Jackson’s support, Congress reduced the tariff. This reduced South Carolina’s militancy. The crisis had passed. Jackson and Webster could declare victory. Winners Historical Significance: The difficult question of nullification and secession, however, had been postponed rather than resolved. Loser

12. The Bank War Jacksonian Democrats suspected that the new economy encouraged corruption and greed. To Jackson and his followers, industry seemed mainly to enrich wealthy people at the expense of everyone else. The Bank had many supporters in Congress. In 1832, they voted to renew the Bank’s charter. Jackson however vetoed the renewal.

13. Nicholas Biddle President of the Second Bank of the United States and made it prosperous

14. The Bank War The Bank’s supporters denounced Jackson as a power-hungry tyrant trampling on the rights of Congress. The veto shocked them because the previous Presidents had so rarely used that power – only nine times in forty-two years. PET BANKS

15. The Bank War Reasons for Chartering the Bank ~To establish a national paper currency ~Manage Government finances ~Regulate private banks Bank Supporters Bank Opponents (Jackson) ~The Bank supplied a stable currency, which helped economic growth. ~Important to regulate state banks. ~Imposes restraint on issuing credit. ~Bank favors rich investors ~Control of the banking is too far removed from the public. ~Restrains private bankers.

16. Opposition to the Second B.U.S. “Soft – Money” Advocates “Hard – Money” Advocates Wanted more currency in circulation – meaning they wanted more bank notes (not backed by gold or silver) to be issued Believed gold and silver were the only basis for money Condemned all banks who issued bank notes Stated the B.U.S. restrained state banks from issuing notes freely Were suspicious of expansion Believed in rapid economic growth

17. Battle for the Bank VS. JACKSON BIDDLE ROUND 1 Was influenced by Henry Clay & Daniel Webster to apply to Congress in 1832 for the Bank’s renewal Stated he would not favor the renewing of the Bank’s charter when it expired in 1836 WHY?? WHY?? • It would force the Bank to become a major issue in the 1832 election • Congress rechartered the Bank As expected, Jackson vetoed the bill; Congress was unable to overturn the veto

18. ROUND 2: The Knockout Punch He attempted other means to destroy the “monster” Jackson could not abolish the bank I can’t wait until 1836 for that “Monster” Bank to expire!! Remove all the government’s deposits Ummm President Jackson, I am pretty sure that will destabilize the financial system so I can’t do that. Sec. of Treasury – Louis McLane

19. ROUND 2: The Knockout Punch Jackson could not abolish the bank He attempted other means to destroy the “monster” YOU’RE FIRED!!!!! Sec. of Treasury – Louis McLane

20. ROUND 2: The Knockout Punch Jackson could not abolish the bank He attempted other means to destroy the “monster” Congrats on the new position…by the way I want you to remove all the government’s deposits from the Bank of the U.S. Ummm President Jackson, I really can’t do that. It would be bad. New Sec. of Treasury – William Duane

21. ROUND 2: The Knockout Punch He attempted other means to destroy the “monster” Jackson could not abolish the bank YOU’RE FIRED!!!!! New Sec. of Treasury – William Duane

22. ROUND 2: The Knockout Punch He attempted other means to destroy the “monster” Jackson could not abolish the bank Attorney General Taney, my good friend and ally congrats on the new position in my cabinet…now about removing those government deposits??? You got it A.J.!!!!! New Sec. of Treasury – Roger Taney

23. Goodbye Marshall; Hello Taney When John Marshall died in 1835, Jackson appointed his friend Roger B. Taney as the new Chief Justice of the Supreme Court This caused a shift from the previous ultra-nationalistic rulings during the Marshall Court Charles River Bridge v. Warren Bridge (1837) Dartmouth College v. Woodward (1819) Impact / Ruling: placed restrictions on the ability of state gov’ts to control corporations Impact / Ruling: supported Massachusetts right to issue the second charter SHIFT

24. “The object of government was to promote the general happiness, an object that took precedence over the rights of contract and property.”

25. One Last Effort by Biddle Ok Jackson…I’m not going away so easy. With the government’s deposits being removed to “pet banks”, Biddle called in loans This caused financial distress People went to Jackson for help but he stood firm and told them to “Go to Biddle” Biddle relented and due to his unpopular tactics lost support for rechartering the Bank

26. Answers: • Jackson wears a king’s clothing, including a cloak, crown, scepter. • That Jackson is trampling U.S. law; that Jackson is above the law.

27. The Bank War Led by Henry Clay and Daniel Webster, in 1832 the Bank’s friends formed a new political party known as the Whigs. The Whig Party Forms The Whigs were nationalists who wanted a strong federal government to manage the economy. Relying on a broad interpretation of the Constitution, they favored the American System of protective tariffs, internal improvements, and a national bank. Historical Significance: The emergence of the Whigs renewed two-party politics in the United States. Whigs challenged Jackson’s Democrats in local, state, and national elections.

28. Emphasis on Opportunity Economic Union Fearful of rapid Territorial growth Defend the Union Embraced industry as the future of the country Rallied behind Jackson Anti-Masons Supported Jackson’s choice, Martin Van Buren, in the 1836 election Loyalties divided among the “Great Triumvirate”

29. The Bank War Jackson was able to undermine the Bank, but the destruction weakened the economy. PET BANKS Relieved from federal regulation, state banks expanded, inflating prices with a flood of paper bank notes. The inflation hurt the common people that Jackson had professed to help. The face of value of bank notes exploded from: $10 million in 1833 to $149 million in 1837.

30. I loathe Paper currency!!!!!!!!! • Before leaving office, A.J. issued a presidential order, the “specie circular” • Only gold or silver coins for payment for public lands • A.J. thought it would curb land speculation • Led to the Panic of 1837

31. What did Van Buren inherit?? There was a nationwide economic boom Speculators bought land in such bulk that the federal government paid off their debt and even had a surplus The federal government was selling Western lands in great amounts NOOOOOOO!!!!!!!! A. Hamilton Give it to the states – The Distribution Act

32. Politics After Jackson Economic troubles were plaguing the country when Martin Van Buren took office in 1837, the economy suffered a severe panic. A key trigger was Jackson’s decision, taken months earlier, to stop accepting paper money for the purchase of federal land. Results: • Hundreds of banks & businesses that had invested in land went bankrupt. • Thousands of planters and farmers lost their land. • 1 out of 3 urban workers lost their jobs. • Those who kept their jobs saw their wages drop by 30%. • The Panic of 1837 was the worst depression suffered by Americans to that date.

33. Panic of 1837 Worst depression in the U.S. up to that point Unemployment rose Banks failed

34. Van Buren’s Response Uh what do you want me to do??? Van Buren did nothing because he strongly opposed government intervention The Panic of 1837 spelled disaster for Van Buren Van Buren was able to get the Independent Treasury passed U.S. Federal Gov’t Martin Van Buren Banks

35. Election of 1840 Vs. William Henry Harrison for the Whigs Martin Van Buren for the Democrats Whigs were more united Democrats had no answer to these campaign strategies Log Cabin Campaign

36. N Who is everyone going to blame for the Panic of 1837? The Whigs Taste Brief Victory The depression in 1837 revived the Whigs. In 1840, they ran William Henry Harrison for President and John Tyler for Vice President. The Whigs ran a campaign that was light on ideas but heavy on the sort of theatrics that would become common in American politics. Van Buren "Tippecanoe & Tyler too" Turning the political tables, the Whigs persuaded voters that Van Buren was ineffective, corrupt, and an aristocrat who threatened the republic. Harrison

37. The Whigs Taste Brief Victory Harrison won the Presidency, and the Whigs succeeded in capturing Congress. A month after assuming office, Harrison died of pneumonia. Vice President John Tyler of Virginia became the President. Tyler surprised and horrified the Whigs by rejecting their policies. The Whigs would have to wait for a future election to exercise full control of the government. Harrison Tyler

38. Tyler Takes Over • Was a former Democrat • Destroyed Van Buren’s independent treasury • Said no to Clay’s proposal to recharter the B.U.S. • Vetoed several internal improvement bills • Whigs broke ties with Tyler • His cabinet resigned (except Sec. of State Daniel Webster) John Tyler The Caroline Affair Webster-Ashburton Treaty Treaty of Wang Hya