Andrew Jackson (79 page)

Jackson couldn’t be sure that this was what Biddle intended, but it was just what he expected of banks and bankers. Jackson as president didn’t know much more about currency questions than he had as a struggling businessman in Nashville, but what he did know disposed him to think the worst of those with their hands on the money supply. The fact that a few men in eastern cities could determine the fate of the nation outraged his democratic sensibilities. Who had elected Nicholas Biddle? None but his cronies on the bank board, whose interests were equally at odds with those of ordinary men and women. Jackson would have opposed the money power even had its intentions been benign. That they were so patently malignant—that the bank had become a “hydra of corruption,” as he put it in a private letter—made his opposition that much easier.

During the spring of 1833 the president prepared his anti-bank offensive carefully. He dangled the possibility of creating a new national bank, confined to the District of Columbia, even as he polled his cabinet secretaries on the feasibility of relying on state banks to handle the fiscal affairs of the federal government. Jackson’s survey had a dual purpose: to test his ideas and to test the loyalty of his secretaries. No less than Biddle did he know that removing the deposits would mean war, and he wanted to be sure that his lieutenants were as devoted to the cause as he was.

The one who displayed the greatest verve was Roger Taney, the attorney general. Like a seasoned prosecutor, Taney presented evidence that Biddle and the bank had consciously manipulated the money supply before the last congressional session. “Can any impartial and unprejudiced mind doubt the motive?” he asked rhetorically. “Was it not to compel the people to continue its monopoly and privileges, not on account of the benefits conferred by it, but to escape from the suffering which the corporation had the power to inflict?” Taney demonstrated that Biddle had bought favorable press coverage for the bank during the fight for renewal of the charter; this practice, of employing the people’s money to manipulate the democratic process, was “pregnant with so much evil,” Taney told Jackson, that it alone was cause for the severest censure. As for alternatives to Biddle’s bank, Taney contended that state banks, “judiciously selected and arranged,” would be able to perform the fiscal tasks of the federal government and supply “a general currency as wholesome and stable as that of the United States Bank.” Taney acknowledged that taking on the bank was fraught with peril. Biddle would wage a “fierce and desperate struggle” to preserve the bank and its prerogatives. But the risk was worth taking. “The purity of our institutions and the best interests of the country call for prompt, firm and decisive measures.”

Taney wasn’t a close friend of Jackson’s, but he knew him well enough to realize that nothing roused the old warrior like the promise of a bloody fight. Jackson indeed rose to the challenge, and by the end of June had fairly decided to remove the deposits and place them in state banks. But the man who would have to implement the policy, Treasury Secretary William Duane, was balking. Jackson sent him a paper defending the action. Duane and others worried that removal of the deposits would provoke Biddle to retaliate against the state banks that received the deposits, provoking financial panic. “If this apprehension be well founded, it proves two things of fearful import,” Jackson’s message to Duane asserted. “First, that the Bank of the United States has the power to accomplish the ruin of the state banks and cause general bankruptcy and distress among the people; and secondly, that there is a disposition to exercise that power, unless its forbearance be purchased by the Government.” Jackson wasn’t sure Biddle could bring down the economy, but if he could, that was all the more reason to bring down Biddle’s bank. “If this despotism be now partially fixed upon the country, a struggle must be made to cast it off, or our people will be forever enslaved.”

Duane, who had been one of the government-appointed directors of the Bank of the United States, wasn’t convinced, and he continued to argue against removal. But Jackson pressed forward. He sent Amos Kendall about the country to determine which state banks were willing and able to support the president against Biddle. In Baltimore, perhaps because it was so close to Philadelphia, the bankers were very hesitant. “Most of the banks there will answer precisely as the Bank of the United States desires,” Kendall reported. Boston was braver. “Some of the banks are not only willing to undertake the government business on the same terms that the Bank of the United States does it, but to give the personal responsibility of their directors and all they possess, for the security of the government.” Boston’s confidence was infectious. “The Maine bank at Portland has made the same tender. I expect to receive a similar offer from Portsmouth.” Yet all the state bankers said that if the deed were to be done, it must be done quickly. Biddle’s bank could crush any state bank that sided with the government but was left short of cash. “The only question, therefore, seems to me to be
an immediate removal
or
no removal
.”

Three weeks later Jackson announced the decision to his cabinet. He reiterated the constitutional arguments against the bank from his veto message but now emphasized the political and especially the moral elements of the case. The fight against the bank was the current battleground in the long struggle for liberty, he said. “The divine right of kings and the prerogative authority of rulers have fallen before the intelligence of the age. Standing armies and military chieftains can no longer uphold tyranny against the resistance of public opinion. The mass of the people have more to fear from combinations of the wealthy and professional classes—from an aristocracy which through the influence of riches and talents, insidiously employed, sometimes succeeds in preventing political institutions, however well adjusted, from securing the freedom of the citizen.” The moneyed aristocracy had attained a stranglehold over the nation’s economy. “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.” The Founding Fathers had revolted against England when such power was wielded against them. The current generation—in particular, the current administration—could do no less. Nor would it. By October 1, 1833, Jackson declared, the federal deposits would be transferred from the Bank of the United States to the state banks.

T
he decision, when it came, didn’t surprise Biddle. His spies had informed him of the debates within the administration and of the soundings of the state banks by Amos Kendall. He considered a preemptive strike by buying off vulnerable members of the administration and Congress. “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.” But he held back, not quite believing that Jackson would really go through with removal.

When Jackson did, Biddle launched a counterattack. He called in loans, tightened credit, and otherwise reduced the bank’s financial exposure. His publicly stated purpose was to strengthen the bank against the uncertainty that must follow the president’s hasty action, but his deeper aim was to demonstrate the economy’s need for a central bank beyond the reach of what he privately called the “nest of gamblers” in the administration. To complement his fiscal tightening, Biddle went ahead with his bribery, offering lucrative positions to Jackson loyalists if they would abandon the president and join the bank.

The attack on the money supply had an immediate effect, starting in the nation’s financial capital. Samuel Swartout, Jackson’s customs collector at New York, was one of those to whom Biddle offered a bank directorship. Swartout declined the offer but pleaded with Biddle to have mercy on the nation’s finances, which were beginning to scream. “It is dreadful here, and no hope of relief except through your institution,” Swartout said. “You must be
liberal
.” Swartout was no radical bank hater, which was why Biddle had thought he might be seduced. Speaking as one businessman to another, Swartout appealed to the better angels of Biddle’s nature, and to his political self-interest. “Now that the effect of the late measure has been made manifest, you can relieve the whole community. . . . Rely upon it, you would receive due credit and consideration for it.” Biddle must act before it was too late. “Nothing but extensive discounts by your institution can save your friends and the public in general. . . . The old friends and dependents of the Bank are perishing.”

Biddle refused to relent. The financial panic spread from New York across the country. Banks collapsed in Washington and Philadelphia while a Boston paper described conditions there as “absolutely frightful.” But Biddle maintained his choke hold on the money supply. “My own view of the matter is simply this,” he explained to the president of the Boston branch of his bank. “The projectives 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.” The president and the administration had started this fight. They would have to see it to the end. “If the Bank remains strong and quiet, the course of events will save the Bank and save all the institutions of the country which are now in great peril. But if from too great a sensitiveness, from the fear of offending or the desire of conciliating, the Bank permits itself to be frightened or coaxed into any relaxation of its present measures, the relief will be cited as evidence that the measures of the government are not injurious or oppressive, and the Bank will inevitably be prostrated.”

The louder the economy shrieked, the more determined Biddle grew. “The whole future is full of gloom and confusion,” he wrote in February 1834. “My own course is decided. All the other banks and the merchants may break, but the Bank of the United States shall not break.” Pleas for relief were in vain. “You may rely on it,” he told one pleader, “that the Bank has taken its final course, and that it will be neither frightened nor cajoled from its duty by any small driveling about relief to the country.” Jackson had chosen the wrong man to tangle with. “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. . . . He may as well send at once and engage lodgings in Arabia.”

T
his was what it came down to: the will of Jackson versus the will of Biddle. Banks might crumble, markets collapse, crops go unplanted, but one man would win. Jackson had no doubt who that would be. “The Bank, Mr. Van Buren, is trying to kill me,” he told the vice president. “
But I will kill it!
”

Yet victory was no sure thing. The initial requirement was to secure his own ranks. Jackson realized that Biddle was encouraging defections, but, given that jobs with Biddle’s bank paid much better than government jobs, there was little Jackson could do besides exhort the tempted to keep the democratic faith. Certain other individuals he threw overboard himself. Treasury Secretary Duane continued to oppose the removal of the deposits even after Jackson made his decision. Jackson didn’t relish replacing Duane after having replaced his entire cabinet already, but he needed a stalwart in that crucial position. He fired Duane and moved Roger Taney from the Justice Department to the Treasury.

The removal process itself seemed to be going well. “We have got the Bank in Baltimore, Philadelphia, New York and Boston perfectly under
check mate
,” Jackson wrote Van Buren. The state banks that were receiving the federal deposits—“pet banks,” their critics called them—had laid in financial stores. And Jackson prepared to send reinforcements and apply whatever pressure was needed to bring Biddle down. “I am ready with the screws to draw every tooth and then the stumps. . . . We will, if I mistake not, have Mr. Biddle as quiet and harmless as a
lamb
in six weeks.”

Jackson rarely underestimated his opponents, but he underestimated Biddle. The bank president proved as politically astute as he was financially ruthless. Having starved large parts of the economy of cash, he encouraged the sufferers to take their case to Congress and the White House. Jackson found himself bombarded with memorials and petitions crying distress and demanding restoration of the deposits and a return to the status quo ante. Meanwhile Henry Clay, with Biddle’s support, introduced resolutions in the Senate condemning Jackson for overstepping his constitutional authority by removing the deposits without leave of Congress.

Jackson was unmoved. “Were all the worshippers of the golden calf to memorialise me and request a restoration of the deposits,” he told Van Buren, “I would cut my right hand from my body before I would do such an act.” Jackson had rarely felt so confident of his rectitude. “My conscience told me it was right to stop the career of this destroying monster,” he wrote Andrew Jr. “I took the step fearlessly, believing it a duty I owed to my God and my country.”

Jackson’s conviction allowed him to ignore much of the havoc the panic played on the economy. “There is no real general distress,” he declared privately in February 1834. “It is only with those who live by borrowing, trade on loans, and the gamblers in stocks.” Perhaps Jackson forgot that he himself had once lived on borrowing and that millions of farmers and businessmen still did. In any event, he declared that it would be a “god send to society if all such were put down.”

He spoke somewhat more openly to a delegation of New York merchants who came to the White House bearing a petition signed by six thousand of their fellow sufferers. Jackson had reason to believe Biddle had put the merchants up to the mission and helped them gather the signatures. So he made them wait in an outer office before he examined their petition, and when he did let them in, he answered their spokesman’s plea for relief with a vehemence that scorched their ears. “Relief, sir!” he thundered. “Come not to me! . . . Go to the monster! . . . Go to Nicholas Biddle. We have no money here. . . . Biddle has all the money. He has millions of specie in his vaults at this moment, lying idle, and yet you come to
me
to save you from breaking.” By one version of this meeting, Jackson’s anger at Biddle grew so uncontrollable that he couldn’t continue speaking. By another, more believable version, the president didn’t lose control for a second. “Didn’t I manage them well?” he asked an aide as the merchants filed out.