Banks used federal bonds as backing for their issuance of banknotes, and Jackson, wanting to get rid of paper money, planned to do so by getting rid of the backing." He admitted that `bundles of letters' every day urged him to take a new course; and Senator Silas Wright of New York, Van Buren's closest and most trusted adviser, believed that a majority in his state wanted a change,' wrote historian Major L. Wilson. It was a big mistake. Many of the newer banks were speculative ventures pure and simple, whose managers were operators in the worst sense of the world." People who had no intention of settling bought large tracts of land from the federal government and paid for them with paper money borrowed from local banks in ever greater amounts." This purpose was laudable," wrote Bray Hammond. The question will incorporate Itself with all our elections, and especially with that as to which there is so great a desire that it should be incorporated. As specie was at a premium, it was hoarded by those who possessed it, and to carry on necessary business transactions, small bills became the medium of exchange," wrote Reginald Charles McGrane. He clearly stated that `congress has no constitutional power to grant a charter' despite the fact that in 1819, in the case McCulloch v. Maryland, the U.S. Supreme Court upheld the Bank's constitutionality. Share with the class a secondary account of the Panic of 1837 and President Van Buren, such as the section “Economic Panic of 1837” in Martin Van Buren: Domestic Affairs from the EDSITEment resource The American President. Bray Hammond noted: "The year 1834 ended and 1835 passed with nothing to warrant hope; the Bank wavered between the prospect of liquidation and that of becoming a state bank. By his second term in office, with the help of high import duties, Jackson succeeded in his fondest goal - eliminating the National debt left over from the Revolutionary War and the War of 1812 before 1835. In a painfully fracturing society, it conferred civic dignity and social inclusion on patriotic working people. Pessimism abounded during the time. Like Biddle, Clay miscalculated. 84, "The one who displayed the greatest verve was Roger Taney," wrote historian H. W. Brands. In any case, Jackson’s successor Martin Van Buren would suffer the consequences of this policy and accordingly would be … He will then have also less influence; for it may be loosely asserted, at least as a general rule, that the President will have less popularity in his second than in his first term. Historian Major L. Wilson noted that "the economic development of the United States depended upon foreign aid in the form of English credit. The charge was all the more scurrilous, given the indispensable help Biddle provided for Jackson's program to retire the national debt. These precious mint drops were soon carried under the vast and rising flood of pulp money. On 2 January 1837, the society’s officers and stockholders reorganized the institution, renaming it the Kirtland Safety Society Anti-Banking Company, and began operations as an unchartered financial institution. Ironically, Jackson, who opposed national investment in internal improvements effectively stimulated irresponsible spending on such projects by state governments that lacked the resources to pay for them. Specie and the Specie Circular Martin Van Buren and the Panic of 1837 The 1830s were a tumultuous decade for America. 4. I have seen many evidences of it. 82 Historian Arthur M. Schlesinger, Jr., wrote: "Jackson seems to have decided on this course shortly after his re-election. Ordinary Americans paid the price for their economic mistakes. It was an economically and politically shortsighted act. Given the fact that the bank was the government's principal mechanism for collecting internal revenue and its only one for raising loans, the defeat of the charter was perhaps the most feckless act in the history of the United States Congress, although, to be sure, that is a title for which there has been no little competition over the years." Biddle said it was the least he could do. Economic historian Charles Sellers wrote: "The full audacity of Old Hickory's [veto] strategy was revealed only at the end of the message, in a brief but sensational attack on the only bank for which he had any constitutional responsibility, however remote. 27" Debt was bad so Biddle must be bad too. Surely the American people now realized how essential the institution was for the financial stability of the country. 151 Daniel Walker Howe wrote: "Repercussions of the panic extended throughout the economy. The insanity of speculation was in ample tho unobserved control of the country while Nicholas Biddle still controlled the deposits, and was certain to reach a climax: whether they stayed with him or went elsewhere." 101 Historian Yonathan Eyal wrote of the pet banks: "Some proved solvent and responsible, others less so, though all were loyal to the Democratic Party. 15, In 1823, the BUSII entered its third stage under President Nicholas Biddle, who as a Pennsylvania state legislator had been a supporter of the first Bank of the United States. "The suspension of specie payment by the banks was followed by the disappearance of coin as a circulating medium. The ball was now in the president's court. Their success, however, was limited because the National Republicans and Anti-Masons were not fully reconciled to the new techniques and could not work together." After the banks had suspended specie payments, they kept up their scheduled distributions to the accounts of the states the only way they could, in nonconvertible funds, and the states accepted this. Martin Van Buren and the Panic of 1837. In the absence of laws requiring banks to hold sufficient reserves of specie and or specie-backed bonds (or both) to back up their paper instruments, evisceration of the BUS all but invited `wildcat banks' (a term invented in frontier Michigan) to issue all the loans and `rag money' the market would bear. It happened shortly after Andrew Jackson left office. The federal bank was an organization to be manned by the faithful. When bills are redeemable at sight in specie, banks will hoard bullion to meet the demands at their counter; the community prefer paper meantime as their more convenient medium of traffic, since the sound currency of a nation is not gold, but the paper which is as good as gold. 79 The bank's effectiveness, however, was not the primary issue. Schlesinger wrote: "In Biddle's eyes the bank was...an independent corporation, on a level with the state, and not responsible to it except as the narrowest interpretation of the charter compelled. 76 The author of the veto message, Amos Kendall, was also the author of the Democratic campaign. A factor of more limited scope but of the greatest cogency was New York's determination to supersede Philadelphia. This he accomplished through the freer use of domestic bills of exchange and the introduction of branch drafts. Yet with every disadvantage the Bank now panting for life had furnished a perfectly sound currency for fifteen years or more, and brought local exchange down to a very moderate cost. Clay demanded: "Tell him it is nearly ruined and undone by the measures which he has been induced to put in operation." Jackson explained his broader views on banking and the Bank of the United States. Robert E. Wright and David Cowen wrote: "The usual story is that Jackson abhorred banks, bankers, and banknotes and embarked on a personal vendetta to extinguish them. And Clay was annihilated by a campaign against the "monster" of the Bank of the United States. Biddle would wage a `fierce and desperate struggle' to preserve the bank and its prerogatives. (Letter from Andrew Jackson to Martin Van Buren, March 22, 1857). 142 Within a week, the Panic of 1837 erupted in New York with banks refusing to redeem in specie. Panic of 1837 Martin Van Buren was better at acquiring presidential power than using it for himself. Biddle had sent Jackson a plan to pay down the federal debt; in their meeting Jackson told Biddle he appreciated the advice. According to his reasoning, public deposits at the Bank had increased by some $2.25 million during that time, and the loans and discounts of the Bank had decreased by over $4 million. By `monied aristocracy,' he meant the older fortunes of the Eastern Seaboard and those who dealt in `paper' rather than `real' wealth such as land and manufacturing facilities. The Deposit Act of Congress provided for the distributed of the federal surplus to the states. "This document was notable for being the only administrative act of President Jackson that was consistent with the hard-money doctrine absorbed from his agrarian background always professed by him. Historian Major L. Wilson said: "After the presidential election of 1836 many Democratic spokesmen joined the Whigs in opposition to the `Specie Circular.' According to Jackson's veto message, "Every man is equally entitled to protection by the law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society - the farmers, mechanics and laborers - who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government." Was obnoxious to many not merely because it was a major policy of the world. of.. Historian John Steele Gordon wrote: `` Repercussions of the Panic of 1819 Jacksonian policy similar factor limited! Aid in the abnormal growth from 1830 to 1834 the distributed of United. 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