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230 C

HAPTER 7

Terms & Names

MAIN IDEA

One American's Story

States’ Rights and

the National Bank

Andrew Jackson confronted

two important issues during

his presidency—states’ rights

and a national bank.

The conflict between states’

rights and federal government

control continues to flare up in

such arenas as education,

commerce, and law enforcement.

WHY IT MATTERS NOW

On January 26, 1830, Massachusetts senator Daniel Webster rose in

the Senate and delivered one of the great speeches of American history.

A PERSONAL

VOICE DANIEL WEBSTER

“ When my eyes shall be turned to behold for the last time the sun in

heaven, may I not see him shining on the broken and dishonored frag-

ments of a once glorious Union. . . . Let their last feeble and linger-

ing glance rather behold the gorgeous ensign of the republic . . .

bearing for its motto, no such miserable interrogatory as ‘What is all

this worth?’ nor those other words of delusion and folly, ‘Liberty first

and Union afterwards’; but everywhere, spread all over in characters

of living light, . . . that other sentiment, dear to every true American

heart—Liberty and Union, now and forever, one and inseparable!

”

—speech delivered in the Senate on January 26 and 27, 1830

“Liberty first and Union afterwards” was favored by John C. Calhoun, one of

Webster’s greatest opponents in the struggle between states’ rights and federal

authority. The question of how much power the federal—as opposed to the

state—government should have came to a head over the issue of tariffs.

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 the infant American indus-

tries. The tariff was increased in 1824 and again in 1828.

THE NULLIFICATION THEORY

Jackson’s vice-president, John C. Calhoun of

South Carolina, called the 1828 tariff a Tariff of Abominations, a “disgusting

and loathsome” tariff. As an agricultural region dependent on cotton, the South

had to compete in the world market. The high tariff on manufactured goods

reduced British exports to the United States and forced the South to buy the more

•Daniel Webster

•John C. Calhoun

•Tariff of

Abominations

•Bank of the

United States

•Whig Party

•Martin Van Buren

•panic of 1837

•William Henry

Harrison

•John Tyler

▼

Daniel Webster

was an ardent

nationalist. He

defended the

federal

government’s

power to make

laws that applied

to all states in

the Union.

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Page 1 of 6

Balancing Nationalism and Sectionalism 231

expensive Northern manufac-

tured goods. From the South’s

point of view, the North was

getting rich at the expense

of the South. One observer

remarked that when Southerners

“see the flourishing villages of

New England they cry, ‘We pay

for all this.’”

Calhoun was in an unusual

and politically dangerous posi-

tion. He had long been known

as a nationalist spokesman, and

he had supported the protective

tariff of 1816. Calhoun was

building a career as a national

statesman, having served under

both Adams and Jackson as

vice-president. The situation in

his home state, however, had

made him change his views.

South Carolina’s economy had

failed to recover fully from an

economic depression. Cotton

prices remained low because

planters and their slaves were

moving to more fertile lands in

Alabama and in the lower

Mississippi River valley. Some

South Carolinians began to

wonder if Calhoun really cared

about the needs of his state. He

soon showed them that he did.

Calhoun devised a nullifi-

cation theory, which basically

questioned the legality of

applying some federal laws in

sovereign states. Calhoun’s

argument was that the United

States Constitution was based

on a compact among the sover-

eign states. If the Constitution

had been established by 13 sov-

ereign states, he reasoned, then each had the right to nullify, or reject, a federal

law that it considered unconstitutional. In 1828 Calhoun wrote down his theory

in a document entitled “The South Carolina Exposition,” but he did not sign his

name to it. Nor did he say what he privately felt. Calhoun believed that if the fed-

eral government refused to permit a state to nullify a federal law, the state had the

right to withdraw from the Union.

HAYNE AND WEBSTER DEBATE STATES’ RIGHTS

The tariff question (and

the underlying states’ rights issue) was discussed in one of the great debates in

American history. In January 1830, visitors to the Senate listened to Senator

MAIN IDEA

Summarizing

What was

Calhoun’s

nullification

theory?

A. Answer

Calhoun argued

that since the

U.S. Constitution

was based on a

compact among

sovereign states

then the states,

must still be

sovereign and

had the right to

determine

whether an act

of Congress was

unconstitutional

and, if it was, to

declare it illegal

within its bor-

ders.

JOHN C. CALHOUN

1782–1850

John Caldwell Calhoun entered

national politics in 1811 when

he was elected to the House

of Representatives. There he

was labeled a War Hawk for

his support of the War of

1812. As President Monroe’s

secretary of war star ting in

1817, Calhoun improved the

army’s organization.

This ambitious and hand-

some man with dark, flashing

eyes served as vice-president

under two presidents—John

Quincy Adams, elected in

1824, and Andrew Jackson,

elected in 1828.

Calhoun had a hard and

humorless side. He took a

tough position on slavery,

arguing that it was not only

necessary but even good:

“There never has yet

existed a wealthy and

civilized society in which

one portion of the com-

munity did not . . . live

on the labor of the other.”

DANIEL WEBSTER

1782–1852

In New England he was

known as the “godlike

Daniel.” New Hampshire

native Daniel Webster actually

began his career in favor of

states’ rights. After moving to

Boston, Massachusetts, in

1816, however, his views

changed. New England’s tex-

tile manufacturers needed a

strong national government to

protect their interests. As a

lawyer and a congressman,

Webster represented Boston’s

business interests. He argued

several landmark cases

before the Supreme Cour t,

including Gibbons v. Ogden.

Webster was best known for

his skill as an orator, but he

hungered after the presiden-

cy. He ran for the highest

office twice, never winning.

Late in his career he said:

“I have given my life to

law and politics. Law is

uncertain and politics is

utterly vain.”

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232 C

HAPTER 7

Robert Hayne of South Carolina debate Senator Daniel Webster of Massachusetts.

Hayne delivered a pointed condemnation of the tariff.

A PERSONAL

VOICE SENATOR ROBERT HAYNE

“ The measures of the federal government . . . will soon involve the whole South in

irretrievable ruin. But even this evil, great as it is, is not the chief ground of our

complaints. It is the principle involved in the contest—a principle, which substitut-

ing the discretion of Congress for the limitations of the constitution, brings the

States and the people to the feet of the federal government, and leaves them

nothing they can call their own.

”

—from a speech to Congress, Januar y 21, 1830

On January 26 Webster replied that he could not conceive of a “middle course,

between submission to the laws, when regularly pronounced constitutional, on

the one hand, and open resistance, which is revolution, or rebellion, on the other.”

Once the debates ended, the people wanted to hear President Jackson’s posi-

tion. On April 13, at a public dinner, he clarified his position in a toast: “Our

Union: it must be preserved.” Calhoun replied with an equally pointed toast: “The

Union, next to our liberty, the most dear; may we all remember that it can only be

preserved by respecting the rights of the States and distributing equally the bene-

fit and burden of the Union.” The two men would not work together again; in fact,

Calhoun resigned the vice-presidency in 1832. Jackson would run for reelection

with former secretary of state Martin Van Buren.

SOUTH CAROLINA REBELS

The issue of states’ rights

was finally put to a test in 1832 when Congress passed a

tariff law that South Carolina legislators still found unac-

ceptable. They responded by declaring the tariffs of 1828

and 1832 “unauthorized by the Constitution” and “null,

void, and no law.” Then they threatened to secede, or

withdraw, from the Union, if customs officials tried to

collect duties.

Jackson was furious. Although himself a Southerner

and a slaveholder, he believed that South Carolina’s

action in declaring a federal law null and void flouted the

will of the people as expressed in the U.S. Constitution.

He declared South Carolina’s actions treasonous and

threatened to hang Calhoun and march federal troops

into South Carolina to enforce the tariff. To make good

on his threats, Jackson next persuaded Congress to pass

the Force Bill in 1833. This bill allowed the federal gov-

ernment to use the army and navy against South Carolina

if state authorities resisted paying proper duties.

A bloody confrontation seemed inevitable until Henry Clay stepped in. In

1833 the Great Compromiser proposed a tariff bill that would gradually lower

duties over a ten-year period. For now, the crisis between states’ rights and fed-

eral authority was controlled, but the issue would continue to cause conflict

in the 1840s and 1850s and would be a major cause of the Civil War.

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.

MAIN IDEA

Contrasting

What were

Jackson’s and

Calhoun’s differing

opinions on states’

rights versus

federal authority?

B. Answer

Jackson thought

that federal

authority was

supreme, while

Calhoun thought

that states’

rights were

supreme.

South Carolinians

wore emblems

made from

palmetto leaves

to show their

support for

nullification.

▼

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Page 3 of 6

JACKSON OPPOSES THE BANK

The Second Bank’s 20-year charter was not due

to expire until 1836, but Henry Clay and Daniel Webster wanted to introduce the

renewal earlier to make it a campaign issue. They thought that Jackson might veto

a new charter and, in so doing, lose some of his support. They underestimated,

however, both the public’s dislike of the BUS and Jackson’s political skill.

Jackson and his allies made certain that the general public came to think of

the BUS as a privileged institution. Jacksonians did have some powerful facts to

support their opinions. Since all federal tax revenues were deposited in the BUS

rather than state or private banks, the Second Bank had an unfair advantage over

other banks. Furthermore, BUS stockholders, not average American taxpayers,

earned the interest from these deposits. A privileged few were making money that

should have benefited all the taxpayers. In addition, the bank’s president,

Nicholas Biddle, often extended loans to congressmen at much lower rates of

interest than the bank gave to the average citizen.

PET BANKS

In 1832, Jackson told his running mate, Martin Van Buren, that the

BUS was a “monster” that corrupted “our statesmen” and wanted “to destroy our

republican institution.” “The bank, Mr. Van Buren, is trying to kill me, but I will

kill it.” After Jackson’s reelection in 1832, he tried to kill the BUS before its char-

ter ran out in 1836. He appointed a secretary of the treasury who was willing to

place all government funds in certain state banks. The banks were called “pet

banks” because of their loyalty to the Democratic Party.

In an attempt to save the BUS, Nicholas Biddle decided to have the bank call

in—or demand repayment of—loans. He also refused to make new loans. He

hoped that these actions would cause a frustrated public to demand the passage

of a new bank charter. Businessmen descended on Washington, D.C., to plead

Balancing Nationalism and Sectionalism 233

Analyzing

“KING ANDREW THE FIRST”

Andrew Jackson once justified his tendency to place person-

al prerogative above constitutional law or national policy by

stating that “One man with courage makes a majority.” His

critics replied with accusations of tyranny. The New York

American condemned Jackson as a “maniac,” who would

“trample the rights of our people under his feet.” The Whig

convention of 1834 declared, “your president has become

your MONARCH.”

Both of those sentiments are reflected in this political car-

toon which portrays Jackson as a king. Ancient portraits of

kings often depicted them grinding their conquered enemies

beneath their heels. Notice that beneath Jackson’s feet are

the torn pages of the Constitution. Notice, too, that in one

hand Jackson is holding a scepter, a symbol of kingly power,

while in the other he is holding the veto, a symbol of presi-

dential power.

SKILLBUILDER

Analyzing Political Cartoons

What does this cartoon suggest about Jackson’s

attitude towards the Constitution?

How does this cartoon specifically comment on

Jackson’s use of presidential power?

SEE SKILLBUILDER HANDBOOK, PAGE R24.

C. Answer

Jackson was

suspicious of

big banks; he

thought the

national bank

was a symbol of

big business; he

saw the bank as

a tool of the

upper classes

and a threat to

democracy.

MAIN IDEA

Analyzing

Motives

What were

some of Jackson’s

reasons for

opposing the

Second Bank of

the United States?

p0230-235aspe-0207s4 10/16/02 4:00 PM Page 233

Page 4 of 6

with Jackson for help. Jackson firmly told them they were talking to the wrong

man. “Go to Nicholas Biddle,” he said.

Pressure from financial leaders finally forced Biddle to adopt a more generous

loan policy. However, the entire chain of events had by this time cost Biddle much

of his backing. In 1836, when its charter expired, the Second Bank of the United

States became just another Philadelphia bank. Five years later, it went out of

business.

WHIG PARTY FORMS

Jackson’s tactics and policies had angered many people,

including some members of his own Democratic Party. In 1834 the discontented—

including Henry Clay, John Quincy Adams, and Daniel Webster—channeled their

frustrations into action; they formed a new political party called the Whig Party.

The Whigs backed the ideals of the American System, as promoted by Henry Clay.

Besides a protective tariff, they wanted to use federal money to construct roads and

canals to foster the exchange of goods between regions. The Whigs also backed

federal control of the banking system and a nationally accepted currency.

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 elec-

tion easily. Along with the presidency, however, Van Buren

inherited the dire consequences of Jackson’s bank war and

money policies.

JACKSON’S LEGACY

Many of Jackson’s pet banks—where

federal funds had been deposited—were wildcat banks.

These banks printed bank notes wildly in excess of the gold

and silver they had on deposit, and were doomed to fail

when many people attempted to redeem their currency for

gold or silver.

Since the notes printed by wildcat banks were nearly

worthless, the federal government was left holding the bag

when people used them to purchase land from the govern-

ment. Jackson realized what was happening. He caused the

Treasury Department to issue an order that made only gold

and silver, called specie, acceptable payment for public land.

The order went into effect on August 15, 1836, and sent peo-

ple rushing to banks to trade paper currency for gold and sil-

ver. In turn, many banks, which had limited specie, sus-

pended the redemption of bank notes.

By May 1837, New York banks stopped accepting all

paper currency. Other banks soon did the same. In the

panic of 1837, bank closings and the collapse of the cred-

it system cost many people their savings, bankrupted hun-

dreds of businesses, and put more than a third of the popu-

lation out of work.

Van Buren tried to help by reducing federal spending,

but that caused already declining prices to drop further.

Then he tried to set up an independent treasury that would

use only gold and silver coin. In 1840 Congress established

this treasury, but the demand for gold and silver it created

only worsened matters.

E. Answer

Jackson had

funds deposited

in pet banks—

which were

often wildcat

banks—and

made specie the

only acceptable

form of payment

for public lands,

which contrib-

uted to the panic

of 1837.

D. Answer

The Whig Party

was formed by

people who

were angry with

Andrew

Jackson and

were in opposi-

tion to a too

powerful presi-

dent. Because

Jackson’s poli-

cies were grow-

ing in unpopu-

larity, this was a

good time for

the Whigs.

POLITICAL

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