American History Series: Bank of the United States Worries Jackson
Chartered by Congress in 1816, the bank was privately run but could lend public money. President Andrew Jackson warned of a risk of political corruption. Transcript of radio broadcast: 13 November 2008
Welcome
to the MAKING OF A NATION – American history in VOA Special English.
Andrew Jackson
served as president of the United States from eighteen twenty-nine to eighteen thirty-seven.
His first term seemed to be mostly a political battle with Vice President John
C. Calhoun.
Calhoun wanted to
be the next president. Jackson believed his secretary of state, Martin Van
Buren, would be a better president. And Van Buren wanted the job. He won the
president's support partly because of his help in settling a serious political
dispute.
This week in our
series, Harry Monroe and Kay Gallant continue the story of Andrew Jackson and
his presidency.
Andrew Jackson
VOICE ONE:
President Jackson's
cabinet was in great disorder. Vice President Calhoun was trying to force out
Secretary of War John Eaton. Eaton would not resign, and the president would
not dismiss him.
Van Buren designed
a plan to gain Eaton's resignation. One morning, as Jackson discussed his
cabinet problems, Van Buren said: "There is only one thing, general, that
will bring you peace -- my resignation."
"Never,"
said Jackson.
Van Buren explained
how his resignation would solve a number of Jackson's political problems.
Jackson did not want to let Van Buren go. But the next day, he told Van Buren
that he would never stop any man who wished to leave.
VOICE TWO:
The president
wanted to discuss the resignation with his other advisers. Van Buren agreed. He
also said it might be best if Secretary of War Eaton were at the meeting.
The advisers
accepted Van Buren's resignation. Then they went to Van Buren's house for
dinner. On the way, Eaton said: "Gentlemen, this is all wrong. I am the
one who should resign!" Van Buren said Eaton must be sure of such a move.
Eaton was sure.
VOICE ONE:
President Jackson
accepted Eaton's decision as he had accepted Van Buren's. But he was unwilling
to give up completely the services of his two friends. He named Van Buren to be
minister to Britain. And he told Eaton that he would help him get elected again
to the Senate.
Jackson then
dismissed the remaining members of his cabinet. He was free to organize a new
cabinet that would be loyal to him and not to Vice President Calhoun.
Even with a new
cabinet, Jackson still faced the problem of nullification. South Carolina
politicians, led by Calhoun, continued to claim that states had the right to
reject -- nullify -- a federal law which they believed was bad.
(MUSIC)
VOICE TWO:
Jackson asked a
congressman from South Carolina to give a message to the nullifiers in his
state. "Tell them," Jackson said, "that they can talk and write
resolutions and print threats to their hearts' content. But if one drop of
blood is shed there in opposition to the laws of the United States, I will hang
the first man I can get my hands on to the first tree I can find."
Someone questioned
if Jackson would go so far as to hang someone. A man answered: "When
Jackson begins to talk about hanging, they can begin to look for the
ropes."
VOICE ONE:
The nullifiers held
a majority of seats in South Carolina's legislature at that time. They called a
special convention. Within five days, convention delegates approved a
declaration of nullification.
They declared that
the federal import tax laws of eighteen twenty-eight and eighteen thirty-two
were unconstitutional, and therefore, cancelled. They said citizens of South
Carolina need not pay the tax.
The nullifiers also declared that if the
federal government tried to use force against South Carolina, then the state
would withdraw from the union and form its own independent government.
VOICE TWO:
President Jackson
answered with a declaration of his own. Jackson said America's constitution
formed a government, not just an association of sovereign states. South
Carolina had no right to cancel a federal law or to withdraw from the union.
Disunion by force was treason. Jackson said: "The laws of the United States
must be enforced. This is my duty under the Constitution. I have no other
choice."
VOICE ONE:
Jackson did more.
He asked Congress to give him the power to use the Army and Navy to enforce the
laws of the land. Congress did so. Jackson sent eight warships to the port of
Charleston, South Carolina, and soldiers to federal military bases in the
state.
While preparing to
use force, Jackson offered hope for a peaceful settlement. In his yearly
message to Congress, he spoke of reducing the federal import tax which hurt the
sale of southern cotton overseas. He said the import tax could be reduced,
because the national debt would soon be paid.
VOICE TWO:
Congress passed a
compromise bill to end the import tax by eighteen forty-two. South Carolina's
congressmen accepted the compromise. And the state's legislature called another
convention. This time, the delegates voted to end the nullification act they
had approved earlier.
They did not,
however, give up their belief in the idea of nullification. The idea continued
to be a threat to the American union until the issue was settled in the Civil
War which began in eighteen sixty-one.
(MUSIC)
VOICE ONE:
While President
Jackson battled the nullifiers, another struggle began. This time, it was
Jackson against the Bank of the United States. Congress provided money to
establish the Bank of the United States in eighteen sixteen. It gave the bank a
charter to do business for twenty years. The bank was permitted to use the
government's money to make loans. For this, the bank paid the government one and
one-half million dollars a year. The bank was run by private citizens.
VOICE TWO:
The Bank of the
United States was strong, because of the great amount of government money
invested in it. The bank's paper notes were almost as good as gold. They came
close to being a national money system.
The bank opened
offices in many parts of the country. As it grew, it became more powerful. By
making it easy or difficult for businesses to borrow money, the bank could
control the economy of almost any part of the United States.
VOICE ONE:
Nicholas Biddle
During Jackson's
presidency, the Bank of the United States was headed by Nicholas Biddle. Biddle
was an extremely intelligent man. He had completed studies at the University of
Pennsylvania when he was only thirteen years old. When he was eighteen, he was
sent to Paris as secretary to the American minister.
Biddle worked on
financial details of the purchase of the Louisiana territory from France. After
America's war against Britain in eighteen twelve, Biddle helped establish the
Bank of the United States. He became its president when he was only
thirty-seven years old.
VOICE TWO:
Biddle clearly
understood his power as president of the Bank of the United States. In his
mind, the government had no right to interfere in any way with the bank's
business. President Jackson did not agree. Nor was he very friendly toward the
bank. Not many westerners were. They did not trust the bank's paper money. They
wanted to deal in gold and silver.
Jackson criticized
the bank in each of his yearly messages to Congress. He said the Bank of the
United States was dangerous to the liberty of the people. He said the bank
could build up or pull down political parties through loans to politicians.
Jackson opposed giving the bank a new charter. He proposed that a new bank be
formed as part of the Treasury Department.
A political drawing from 1832 about the Bank of the United States. President Jackson is shown as a cat defending the United States from rats that steal.
VOICE ONE:
The president urged
Congress to consider the future of the bank long before the bank's charter was
to end. Then, if the charter was rejected, the bank could close its business
slowly over several years. This would prevent serious economic problems for the
country.
Many of President
Jackson's advisers believed he should say nothing about the bank until after
the presidential election of eighteen thirty-two. They feared he might lose the
votes of those who supported the bank. Jackson accepted their advice. He agreed
not to act on the issue, if bank president Biddle would not request renewal of
the charter before the election.
Biddle agreed. Then
he changed his mind. He asked Congress for a new charter in January eighteen thirty-two.
The request became a hot political issue in the presidential campaign.
(MUSIC)
ANNOUNCER:
Our program was written by Frank Beardsley. Your narrators were Harry
Monroe and Kay Gallant. Transcripts, MP3s and podcasts of our programs can be
found, along with historical images, at voaspecialenglish.com. Join us again
next week for THE MAKING OF A NATION - an American history series in VOA
Special English.