Jimmy Dolan

Andrew Jackson and His Policies on the National Bank


Andrew Jackson saw the Bank of the United States (BUS) as a vehicle of privilege in society. Plainly, Jackson's own personal experience told him the bank discriminated against the common people. Contributing to Jackson's skepticism of the bank was Nicholas Biddle, the president of the bank, whose aristocratic manner aggravated Jackson. Jackson also harbored a personal hate for the rich Kentucky gentlemen Henry Clay and his pro-bank American System. The bank's personal loans exclusively to the wealthy, and even the bank's Federalist roots under Alexander Hamilton incensed the "Old Hero." The "New Democracy" whom Jackson sought to please, had put him in power hoping he would correct what they saw as a vast wrong. Wielding supreme power with his veto "sword", "King Andrew the First" set about destroying the bank and the firm financial institution which had helped our country from its infancy.
The primary reason Jackson saw corruption and privilege in the Bank of the United States was its president, Nicholas Biddle. Dubbed "Czar Nicholas I," Biddle was a rich elitist Pennsylvanian who hoped to "relieve the country of the domination of these miserable [Jackson] people." (American Pageant p. 277) As Bailey and Kennedy state, "Biddle cleverly lent funds where they would make influential friends." In short, he used the money to buy influence, in 1831 alone, fifty-nine members of Congress had loans from "Emperor Nick of the Bribery Bank." Anyone he could not bribe, for example, Jackson, he attempted to destroy. In other words, while an important financial institution, the Bank was ridden with corrupt, arrogant, and inept officers. None of these factors played well in business or the court of public opinion.
The next reason Jackson objected to the Bank of the United States was more personal than political. Jackson's personal hatred for Henry Clay became a major issue in the future of the bank. To truly understand this, one must be aware of the past of the two men. They were both westerners but Jackson believed in the common man instead of Clay and his "old New England stock and gentry-proud Virginians." This was the same Henry Clay who had smashed Jackson's presidential aspirations with his "corrupt bargain" of 1824. "Old Hickory" was well aware of Clay and his strong advocacy of the bank and knew that the BUS was a key cornerstone of his precious American System. Jackson slowly set about picking apart this platform by not only vetoing the Maysville Road Bill to allow a large highway in Clay's home state of Kentucky, but by scorchingly vetoing the recharter bill Clay had rammed through Congress on "greased skids." Calling the bank a tool of "the rich and the powerful [who] too often bend the acts of government to their selfish purposes," Jackson stated the bank had "powers conferred upon its agent [that were] not only unnecessary but dangerous to the government and country."(American Spirit p. 254) Jackson then further assailed the bank by draining it of federal deposits and bleeding the bank dry by 1836. The once "gallant Henry" was not only defeated but heartbroken by the further loss of both his system and his presidential ambitions which had died at the hands of Jackson in 1832.
The next reason for Jackson's intense hatred of the bank was its exclusive loans to the wealthy and influential members of society. Biddle targeted newspapers for loans to earn good press. In fact, when one Boston Journal heard of Jackson's veto of the recharter, they condemned the veto as "the most wholly radical and basely Jesuitical document that ever emanated from any administration, in any country.... [a production of] hypocrisy and arrogance; of imbecility and talent; of cunning, falsehood, and corruption." (American Spirit p. 255) But, Biddle's Bank became even more corrupt seducing members of Congress earning strong support and the nickname "the hydra of corruption." Unfortunately, the bank and its officers were not fully aware of their responsibilities, public trust, and the strong "New Democracy" and "Kitchen Cabinet" who were to destroy it years later.
Jackson even saw evil in the bank's roots. The Bank of the United States was a key plank in Alexander Hamilton's Federalist Treasury plan. Jackson saw big government and constitutional problems with Hamilton's plan much like his predecessor Thomas Jefferson. "Old Andy" saw the Federalists as big government aristocracy who clearly did not believe in the interest of the common people. It was for this reason Jackson saw the bank as such an evil of the society of the elite rich classes.
Finally, Jackson was against the bank for his own individual experiences. As a young lawyer, Jackson became very successful and even opened up a store along the Cumberland River in Tennessee. However, Jackson engaged in a large amount of land speculation and was forced to sell the store when he unwittingly became involved in the financial manipulations of his creditor, a Philadelphia speculator. It was this experience which made Jackson an opponent of paper money and distrustful of any bank which was geared toward those of privilege. (Microsoft Enc.)
While Jackson did feel what he was doing was morally right, returning the riches back to the common people, he was wrong. While the bank truthfully was an instrument of the privileged, it was also a financially sound institution. As a monopoly, it was able to control other banks such as "fly-by night banks" which would simply accept money from the people and then leave town. It also reduced the amount of bank failures and printed genuine bank notes at a time when the country was flooded with money of little or no value. It was also a safe place to put government funds which could be transferred and disbursed. While it did have these qualities, its power in the hands of the rich elite made it politically vulnerable to attack. As one could say however, "you don't cut off the head of the patient whose stomach is sick." Yes, the Bank of the United States had problems and was riddled with corruption. However, it helped keep the nation in good financial standing and gave it a source of funds to fall back on. It was this type of institution which could have saved us from the disasters of the panic of 1837. While sometimes problematic, Biddle's Bank kept the nation afloat.
In conclusion, while Jackson saw the Bank of the United States as a vehicle of privilege in society, he failed to see the benefits of the bank. While he did feel that the common people were being abused by such people as Nicholas Biddle, Henry Clay, and our forefather Alexander Hamilton, he took drastic action when all that was needed was modification. He instead let his personal vendettas against people and his experiences cloud his judgment so that the only remedy was to destroy it. Unfortunately, Andrew Jackson did not see the folly of his actions and as a result his party and his country perished due to the panic of 1837.

Bibliography
Bailey, Thomas A., David M. Kennedy, and Lizabeth Cohen. The American Pageant. Boston: Houghton Mifflin Company, 1998.

Bailey, Thomas A.and David M. Kennedy The American Spirit. Lexington, Massachusetts: D.C. Heath and Company, 1991.

"Andrew Jackson" Microsoft Encarta. 1998 ed.