The “Bank War” and Nullification Crisis


1.   "Accomplishments" of the Jackson Administration (1829-1837)

      a.   Defended the "honor" of Peggy Eaton

      b.   Initiated the "spoils system"

      c.   Affirmed the doctrine of "strict construction" through his veto of the Maysville Road bill (and then proceeded to approve more internal improvements bills than all his predecessors combined!)

      d.   Forcibly removed the five "civilized nations" (native Americans) from their ancestral homes and relocated them on lands west of the Mississippi River

      e.   Destroyed the nation's central banking system through his "war" on the Second Bank of the United States

      f.   Preserved the Union through his handling of the nullification crisis

      g.   Revolutionized the office of the American presidency.


2.   The "Bank War": Phase One

      a.   The Second Bank of the United States: A mixture of public and private enterprise

      b.   Functions of the Bank

            i.   as "fiscal agent" of the federal government, served as the receiver of government revenue and disburser of its expenditures

            ii.  issued bank notes which circulated as currency

            iii. regulated the state banks by preventing them from issuing too many notes

      c.   Opponents of the Bank

            i.   "hard-money men" (e.g., Sen. Thomas Hart "Old Bullion" Benton) who distrusted all banks and paper money

            ii.  speculators and enterprising businessmen who opposed the regulatory functions of the banks

            iii. Americans who mistrusted large concentrations of power

            iv. Andrew Jackson, who viewed the Bank as a personal threat to his own political power

      d.   The Bank Veto

            i.   bill to re-charter the Bank passes Congress in July 1832

            ii.  The veto message articulates the political philosophy of the Democratic party

                        (1)       Jackson denounces the Bank as a monopolistic "engine of special privilege"

                        (2)       Jackson announces a new role for government: to strike down special privilege and guarantee a "level playing field" for all citizens

            iii. Contrast between the populist tone of the message and the not-so-radical substance


3.   The Election of 1832: A referendum on the Bank?

      a.   "National Republicans" (Henry Clay) vs. "Democratic Republicans" (A. Jackson)

      b.   Martin Van Buren replaces John C. Calhoun as the "heir apparent" as a result of the "Eaton Affair"

      c.   The advent of the national nominating convention

      d.   Outcome: Jackson carries 16 (of 24) states, wins 55 percent of the vote


4.   The Bank War: Phase Two

      a.   Jackson interprets his re- election as a sign of popular approval of his Bank policy and attempts to destroy the Bank by removing the federal deposits (1833)

      b.   Jackson and his Treasury secretaries: Louis McLane, William Duane, Roger Taney

      c.   Rise of the Whig party (National Republicans plus dissident Jacksonians)

      d.   Why was the removal of the deposits so controversial?

            i.   the issue of the "power of the purse"

            ii.  Jackson interprets his election as a popular mandate to destroy the bank

      e.   Jackson is censured by the U.S. Senate for exceeding his authority


5.   Andrew Jackson as the first "modern" president. Jackson transformed the office of the presidency through

      a.   his claim that the president was the direct representative of "the people" B the embodiment of the "popular will"

      b.   his aggressive use of the veto power

      c.   his relationship with his cabinet


6.   The Nullification Crisis (1832-1833)

      a.   John C. Calhoun: the South's great "champion of error"

            i.   Calhoun's evolution from staunch nationalist to southern sectionalist

            ii.  South Carolina's evolution from a bastion of nationalism to a hotbed of extremism

                        (1)       falling cotton prices undermine the economy of South Carolina

                        (2)       South Carolinians blame their problems on the succession of protective tariffs that pass Congress in 1816, 1824, and 1828.

                        (3)       South Carolinians see themselves as a beleaguered minority victimized by the northern majority

                        (4)       Relationship between the tariff issue and slavery issue

      b.   The Doctrine of Nullification: John C. Calhoun's response to two unresolved questions about the nature of the American system of government

                        (1)       Who has the power to judge the constitutionality of federal laws? The Supreme Court (Marbury v. Madison) or the individual states (Kentucky and Virginia Resolutions).

                        (2)       What is the nature of the Union created by the Constitution?

                                          (a)       legalistic view ("compact theory"): the Union is a partnership among the states; the federal government is the agent of the sovereign partners; each partner (state) has the right to judge whether the agent (federal government) has lived up to the terms of the contract

                                          (b)       organic view: The Union is not a partnership but a nation -- more than merely the "sum of its parts." No one part (state)can interpose its authority against the authority of the nation

      c.   The Nullification Ordinance (November 1832)

      d.   Jackson's "Proclamation to the People of South Carolina" (December 1832): "the laws of the United States must be executed"

      e.   The Force Bill ("Bloody Bill")

      f.   The Compromise of 1833 ends the nullification crisis, providing for a gradual reduction of tariff duties over a ten-year period

      g.   Who "won" the nullification crisis?