[Sidenote: Tariff of 1832.]

[Sidenote: "Nullified" by South Carolina, 1833.]

[Sidenote: Jackson's warning.]

[Sidenote: He prepares to enforce the law.]

[Sidenote: The Force Bill, 1833.]

306. Nullification, 1832-33.--In 1832 Congress pa.s.sed a new tariff act. The South Carolinians decided to try Calhoun's weapon of nullification. They held a convention, declared the act null and void, and forbade South Carolinians to obey the law. They probably thought that Jackson would not oppose them. But they should have had no doubts on that subject. For Jackson already had proposed his famous toast on Jefferson's birthday, "Our federal Union, it must be preserved." He now told the Carolinians that he would enforce the laws, and he set about doing it with all his old-time energy. He sent ships and soldiers to Charleston and ordered the collector of that port to collect the duties.

He then asked Congress to give him greater power. And Congress pa.s.sed the Force Bill, giving him the power he asked for. The South Carolinians, on their part, suspended the nullification ordinance and thus avoided an armed conflict with "Old Hickory," as his admirers called Jackson.

[Sidenote: Tariff of 1833.]

307. The Compromise Tariff, 1833.--The nullifiers really gained a part of the battle, for the tariff law of 1832 was repealed. In its place Congress pa.s.sed what was called the Compromise Tariff. This compromise was the work of Henry Clay, the peacemaker. Under it the duties were to be gradually lowered until, in 1842, they would be as low as they were by the Tariff Act of 1816 (p. 231).

[Sidenote: Second United States Bank, 1816.]

[Sidenote: Jackson's dislike of the bank.]

308. The Second United States Bank.--Nowadays any one with enough money can open a national bank under the protection of the government at Washington. At this time, however, there was one great United States Bank. Its headquarters were at Philadelphia and it had branches all over the country. Jackson, like Jefferson (p. 163), had very grave doubts as to the power of the national government to establish such a bank. Its size and its prosperity alarmed him. Moreover, the stockholders and managers, for the most part, were his political opponents. The United States Bank also interfered seriously with the operations of the state banks--some of which were managed by Jackson's friends. The latter urged him on to destroy the United States Bank, and he determined to destroy it.

[Sidenote: Jackson, Clay, and the bank charter.]

[Sidenote: Const.i.tution, Art. I, sec. 7, par. 3.]

[Sidenote: Reelection of Jackson, 1832.]

309. Struggle over the Bank Charter.--The charter of the bank would not come to an end until 1836, while the term for which Jackson had been elected in 1828 would come to an end in 1833. But in his first message to Congress Jackson gave notice that he would not give his consent to a new charter. Clay and his friends at once took up the challenge. They pa.s.sed a bill rechartering the bank. Jackson vetoed the bill. The Clay men could not get enough votes to pa.s.s it over his veto. The bank question, therefore, became one of the issues of the election of 1832.

Jackson was reflected by a large majority over Clay.

The people were clearly on his side, and he at once set to work to destroy the bank.

[Sidenote: The bank and the government.]

[Sidenote: Removal of the deposits, 1833. _McMaster_, 305-308.]

310. Removal of the Deposits.--In those days there was no United States Treasury building at Washington, with great vaults for the storing of gold, silver, and paper money. There were no sub-treasuries in the important commercial cities. The United States Bank and its branches received the government's money on deposit and paid it out on checks signed by the proper government official. In 1833 the United States Bank had in its vaults about nine million dollars belonging to the government. Jackson directed that this money should be drawn out as required, to pay the government's expenses, and that no more government money should be deposited in the bank. In the future it should be deposited in certain state banks. The banks selected were controlled by Jackson's political friends and were called the "pet banks."

[Ill.u.s.tration: ANDREW JACKSON, 1815. "Our Federal union, it must be preserved."--Jackson's toast at the Jefferson dinner.]

[Sidenote: Speculation in Western lands. _McMaster_, 309.]

[Sidenote: The specie circular, 1836.]

311. Jackson's Specie Circular, 1836.--The first result of the removal of the deposits was very different from what Jackson had expected. At this time there was active speculation in Western lands.

Men who had a little spare money bought Western lands. Those who had no money in hand, borrowed money from the banks and with it bought Western lands. Now it happened that many of the "pet banks" were in the West.

The government's money, deposited with them, tempted their managers to lend money more freely. This, in turn, increased the ease with which people could speculate. Jackson saw that unless something were done to restrain this speculation, disaster would surely come. So he issued a circular to the United States land officers. This circular was called the Specie Circular, because in it the President forbade the land officers to receive anything except gold and silver and certain certificates in payment for the public lands.

[Ill.u.s.tration: A SETTLER'S CABIN.]

[Sidenote: Payment of the national debt. _McMaster_, 309-310.]

312. Payment of the Debt, 1837.--The national debt had now all been paid. The government was collecting more money than it could use for national purposes. And it was compelled to keep on collecting more money than it could use, because the Compromise Tariff (p. 248) made it impossible to reduce duties any faster than a certain amount each year.

No one dared to disturb the Compromise Tariff, because to do so would bring on a most bitter political fight. The government had more money in the "pet banks" than was really safe. It could not deposit more with them.

[Sidenote: Distribution of the surplus.]

[Sidenote: Van Buren elected President, 1836.]

313. Distribution of the Surplus, 1837.--A curious plan was now hit upon. It was to loan the surplus revenues to the states in proportion to their electoral votes. Three payments were made to the states. Then the Panic of 1837 came, and the government had to borrow money to pay its own necessary expenses. Before this occurred, however, Jackson was no longer President. In his place was Martin Van Buren, his Secretary of State, who had been chosen President in November, 1836.

CHAPTER 30

DEMOCRATS AND WHIGS, 1837-1844

[Sidenote: Causes of the Panic.]

[Sidenote: Hard times, 1837-39.]

314. The Panic of 1837.--The Panic was due directly to Jackson's interference with the banks, to his Specie Circular, and to the distribution of the surplus. It happened in this way. When the Specie Circular was issued, people who held paper money at once went to the banks to get gold and silver in exchange for it to pay for the lands bought of the government. The government on its part drew out money from the banks to pay the states their share of the surplus. The banks were obliged to sell their property and to demand payment of money due them.

People who owed money to the banks were obliged to sell their property to pay the banks. So every one wanted to sell, and few wanted to buy.

Prices of everything went down with a rush. People felt so poor that they would not even buy new clothes. The mills and mines were closed, and the banks suspended payments. Thousands of working men and women were thrown out of work. They could not even buy food for themselves or their families. Terrible bread riots took place. After a time people began to pluck up their courage. But it was a long time before "good times" came again.

[Sidenote: The national finances.]

[Sidenote: The Sub-Treasury plan.]

[Sidenote: Independent Treasury Act, 1840.]

315. The Independent Treasury System.--What should be done with the government's money? No one could think of depositing it with the state banks. Clay and his friends thought the best thing to do would be to establish a new United States Bank. But Van Buren was opposed to that.

His plan, in short, was to build vaults for storing money in Washington and in the leading cities. The main storehouse or Treasury was to be in Washington, subordinate storehouses or sub-treasuries were to be established in the other cities. To these sub-treasuries the collectors of customs would pay the money collected by them. In this way the government would become independent of the general business affairs of the country. In 1840 Congress pa.s.sed an act for putting this plan into effect. But before it was in working order, Van Buren was no longer President.

[Sidenote: New parties.]

[Sidenote: The Democrats.]

[Sidenote: The Whigs.]

316. Democrats and Whigs.--In the Era of Good Feeling there was but one party--the Republican party. In the confused times of 1824 the several sections of the party took the names of their party leaders: the Adams men, the Jackson men, the Clay men, and so on. Soon the Adams men and the Clay men began to act together and to call themselves National Republicans. This they did because they wished to build up the nation's resources at the expense of the nation. The Jackson men called themselves Democratic Republicans, because they upheld the rights of the people. Before long they dropped the word "Republican" and called themselves simply Democrats. The National Republicans dropped the whole of their name and took that of the great English liberal party--the Whigs. This they did because they favored reform.

[Ill.u.s.tration: Log Cabin Song Book.]

[Sidenote: "A campaign of humor." _Higginson_, 269; _McMaster_, 315-316.]

[Sidenote: Harrison and Tyler elected, 1840.]