States Rights and the National Bank The Americans, Chapter 7.4, Pages 230-235
A Tariff Raises the States Rights Issue When the war of 1812 ended, British manufacturers wanted to destroy their American competitors by flooding the U.S. market with inexpensive goods. In response, Congress in 1816 passed a tariff to protect infant American industries. The Tariff was increased in 1824 and again in 1828. ~The Americans, page 230.
The Nullification Theory Southern view of Tariff of 1828 Forced South to buy more expensive goods from the North North getting rich at the expense of the South John C. Calhoun Sec of War under James Monroe Vice President under both John Quincy Adams and Andrew Jackson Supported the tariff of 1816 Reversed position because of economic needs of South Carolina Nullification Theory Constitution a compact among Sovereign States States had the right to reject federal laws that they considered unconstitutional States had the right to withdraw from the Union
Debate in the Senate 1830 Hayne and Webster Debate States Rights Robert Hayne from South Carolina Daniel Webster (New Hampshire) Hayne s view Condemned the tariff Tariff will ruin the South Places federal government before the Constitution Webster Obey the laws or open revolt
South Carolina Rebels 1832 South Carolina s Actions Declares tariffs of 1828 & 1832 null & void Threaten to secede Jackson s Response Declares South Carolina s actions treasonous Threatens to enforce tariff with federal troops Force Bill of 1833 Authorizes use of military against South Carolina Henry Clay s Compromise Tariff would gradually be reduced over 10 year period
Jackson Attacks the National Bank Although Andrew Jackson never did resort to sending troops into South Carolina, he did wage a very personal war on the Bank of the United States (BUS). In fact, during the same year he dealt with the South Carolina crisis, 1832, he vetoed the bill to recharter the Bank. ~The Americans, page 232.
Jackson Opposes the Bank Politics of 1832 Henry Clay and Daniel Webster want to make renewal of the charter campaign issue If Jackson vetoes a new charter, he will lose support Jackson s Criticism of the BUS Had an unfair advantage over other banks Stockholders made money which should have gone to all taxpayers Bank gave lower loan rates to congressmen than to average citizens
Pet Banks Jackson s Actions against the BUS Has all government funds placed in State banks Loyal to Democratic Party Pet banks Nicholas Biddle President of the BUS Calls in all loans Refuses to make new loans Fails to save bank Charter expires in 1836 Bank goes out of business in 1841
Whig Party Forms 1834 Dissatisfaction with Jackson s policies Democratic Splits Henry Clay, John Quincy Adams & Daniel Webster form Whig party Ideals of Whig Party Henry Clay s American System National currency Federal control of banking system Protective tariff Federal funding to build roads & infrastructure
Van Buren Deals with Jackson s Legacy When Jackson announced that he would not run for a third term, the Democrats chose Vice-President Martin Van Buren as their candidate. The newly formed Whig party, which in 1836 was not able to agree on a single candidate, ran three regional candidates against him. With Jackson s support Van Buren won the election easily. Along with the presidency, however, Van Buren inherited the dire consequences of Jackson s bank war and money policies. ~The Americans, page 234.
Wildcat banks Printed bank notes in excess of gold reserves People try to use notes to buy federal land Panic of 1837 Jackson issues order that only hard currency can purchase land Causes a run on the banks Jackson s Legacy trade paper money for hard currency People lose savings; businesses go bankrupt; 1/3 population out of work Van Buren s Policies Reduces Federal spending Makes problem worse Establishes an independent treasury
Harrison and Tyler William Henry Harrison Whig candidate in 1840 Portrayed as a man of the people Actually came from a wealthy family War hero (Battle of Tippecanoe) Defeats Van Buren Enacts economic reform Dies of pneumonia after 1 month John Tyler Harrison s vice president On the ballot to gain Southern Votes Opposed many parts of economic recovery plan