H.W. Brands’ The Money Men (A Book Tasting, Part II).

Jackson slays the many-headed monster

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A week ago I published a book tasting including quotations and commentaries from H.W. Brands’ fascinating book The Money Men. If you do not already own this book – I highly recommend acquiring a copy. It is a fascinating, well-written read. For some time now I have been attempting to understand our financial system, the recent
recession, OWS, political policy, and other similar topics – and I am still far from understanding it…but this book has been exceptionally insightful.

I include below some of my quotations, notes, and commentary from the second chapter in the book entitled, “The Bank War” but must admit that I was able to include even less of what I considered important in the section below than I did in the last tasting. If one where to open my copy of this small volume you’d find the pages heavily marked – the quality and quantity of the info. being so extensive.

  • “The fight over the Bank of the United States marked the beginning of the end of the fondest dream of the Founders: that the country they created might be spared the rancor of partisan politics. Parties, they believed, were artifacts of monarchy, where competing interests vied for the king’s favor. In a republic, based on civic virtue, parties need never emerge, for all good citizens would seek the common weal. What the Founders failed to appreciate was that good citizens might have distinctly different visions of the common weal.” – 57.
  • “Heading the camp of capitalism was Hamilton; of democracy, Jefferson.” – 57.
  • “Federalists responded by ramming through Congress the Alien and Sedition Acts, outlawing most dissent. Jefferson, Adams’s vice president…secretly penned a protest asserting the right of states to nullify laws they deemed unconstitutional.” – 59.
    • I have always heard this was a dark time in  American history, but have never studied it…it is on my list…somewhere.
  • “There are great and intrinsic defects in his character which make him unfit for the office of Chief Magistrate.” – Alexander Hamilton on John Adams, pg. 60.
    • Lest we think that political name-calling is only for today, it has been going on for a long time.
  • Hamilton’s eldest son had died in a duel, and so would Hamilton. – 61.
  • Aaron Burr.
    • When you see names like this it simply means the individuals were mentioned in the text and I would like to study them further at some juncture. In this manner a single book provides dozens or hundreds of leaping off points for further learning.
    • Nicholas Biddle.
    • “The violence of party…disgraces our country.” – Nicholas Biddle, 61.
      • This commentary would become ironic in light of Biddle’s later endeavors to maintain the existence of the national bank at great cost to the government.
    • “…as the fighting persisted [War of 1812] [President James] Madison succumbed to the temptation Hamilton had warned of and began printing unsupported paper money. Interest rates soared, investor confidence plunged, and the national accounts spun into confusion…about the time the British burned the Capitol and the White House, Madison concluded that Hamilton had been right regarding the need for a national bank, at least in time of crisis. Conveniently forgotten were the earlier Republican assertions, most notably by Madison himself, that a national bank contravened the Constitution.” – 63.
    • “…in 1816 the second Bank of the United States was chartered.” – 64.
    • “That it [the national bank] has been perverted to selfish purposes cannot be doubted. That it may, and must be renovated is equally certain.” – Nicholas Biddle, 64-65.
    • “In 1819 the United States suffered its first full-blown financial panic.” – 65.
    • “…the…struggle against the Indians of the West culminated in the destruction of nearly all aboriginal resistance to white settlement east of the Mississippi. The sudden availability of vast new reaches of territory, combined with the loose money left over from the war, fueled wild speculation in land. Prices rose and rose, becoming unsustainable…” – 66.
    • “Solid figures on the overall shrinkage of the money supply are impossible to reconstruct, but the contraction of the liabilities of the Bank of the United States–from $22 million in the autumn of 1818 to $10 million at the beginning of 1820–is indicative.” – 66.
    • “The depression that followed the panic prostrated large parts of the country. Banks folded; merchants liquidated; sailing ships sat idle; commercial buildings stood empty; farmers lost their land and homes. Tens of thousands of Americans took to the roads in vague hope of finding something better than the disaster they fled.” – 66.
    • Chief Justice John Marshall.
    • “For nearly two decades Marshall had defended and elaborated the Federalist vision of a strong central government.” – 67.
    • “Many Republicans disputed Marshall’s interpretation, and decades would pass before the Supreme Court was generally accepted as the final arbiter of the Constitution.” – 68.
      • The struggle revolving around a strong central government versus a loose association of states was an ongoing battle throughout the history of the country – resolved in some sense by the American Civil War, though the debate continues to this day.
    • John Jacob Astor.
    • “One measure of his [Nicholas Biddle] success was the reduction and eventual elimination of the monetary exchange rate between the different regions of the country.” – 70.
      • IMHO, this is a pretty impressive achievement.
    • “By the 1820s nearly all the old property qualifications for voting had disappeared, as new states entered the Union with constitutions based on the egalitarian rhetoric of the Declaration of Independence, and shamed the existing states into changing their rules. At the same time for similarly democratic reasons, state legislatures conferred the selection of presidential electors upon the people. The result was that presidential campaigns in the 1820s became popularity contests, with the victor the candidate most appealing to the largest number of adult white males.” – 70.
      • I’d like to study further the differences between a democratic and republic government and the advantages/disadvantages of each.
    • “[Andrew] Jackson adopted the position pioneered by that other general-turned-politician, George Washington, that a candidate’s actions should speak for themselves…As a result, when he assumed the presidency in 1829…he did so unburdened by promises or commitments to anything more specific than the national welfare, however he chose to define it.” – 72.
      • I like this manner of achieving one’s ends…might our character speak louder than our words…and, oh that it could be true in our politics.
    • “A strict constructionist, Jackson believed that Congress legitimately might charter a bank for the federal District of Columbia, but not for the rest of the country. That John Marshall had ruled otherwise didn’t impress him.” – 72.
    • Henry Clay.
    • “Presidential vetoes were rare in those early days but not unheard of…” – 73.
    • Martin Van Buren.
    • “We must endeavor to reach the understandings of our fellow citizens by the diffusion of correct views of a subject which is much misunderstood.” – Nicholas Biddle, concerning the bank, 75.
    • Biddle paid newspapers thousands to publish articles written by the bank to promote the bank and also made payments to politicians. – 75.
    • “I believe my retainer has not been renewed, or refreshed, as usual. If it be wished that my relation to the Bank should be continued, it may be well to send me the usual retainers.” – Daniel Webster, pp. 75-76.
    • “…by way of a warning to the enemies of the Bank to keep hands off, Biddle arranged a contraction of credit in the West. It was there that antipathy for the Bank ran broadest and support for Jackson deepest. Biddle concealed his intentions in the matter, citing financial uncertainty as cause for calling in the loans. The effect wasn’t dramatic but it was unmistakable, as was Biddle’s point: that the Bank would defend itself, by harming its enemies if necessary.” – 76.
    • Daniel Webster was oftentimes called by contemporaries the “God-like Daniel.” – 78.
    • “[Thomas Hart] Benton’s alliance with Jackson [against the national bank] couldn’t have been predicted a decade earlier, when he and Jackson took opposite sides in a shooting brawl in Nashville. Jackson’s shoulder caught a bullet that spent years in his flesh before finally popping out…” – 79.
      • From other reading I have done it appears Jackson was in a number of duels and shootouts and had several bullets jangling around in his body.
    • “They lead to the abduction of its gold and silver. If notes are issued, they are payable at the branch bank and an adequate supply of gold and silver must be kept on hand to redeem them; but these orders being drawn on Philadelphia, the gold and silver of the state must be sent there to meet them.” – Thomas Hart Benton, 79.
    • “When the renewed charter [for the national bank] is brought in for us to vote upon, I shall consider myself as voting upon a bill for the establishment of lords and commons in this America, and for the eventual establishment of a King!” – Thomas Hart Benton, 80.
    • “I do not mean to say that he was directly bribed to give this vote. From the character he sustained and from what I knew of him, I think he would have resented any thing that he regarded as an attempt to corrupt him. But he wanted the money, and felt grateful for the favor. And perhaps he thought that an institution which was so useful to him, and had behaved with so much kindness, could not be injurious or dangerous to the public, and that it would be as well to continue it.” – Roger Taney, Attorney General for Jackson, pg. 80.
      • Brands points out that Jackson on the other hand had a much stronger view – that some supporters of the bank in the political realm had been outright bribed.
    • “Each public officer who takes an oath to support the Constitution swears that he will support it as he understands it, and not as it is understood by others. It is as much the duty of the House of Representatives, of the Senate, and of the President to decide upon the constitutionality of any bill or resolution which may be presented to them for passage or approval as it is of the supreme judges.” – Andrew Jackson, 81.
    • “Jackson’s view of the Constitution and its interpretation was hardly unique at the time; the doctrine of judicial supremacy remained a conceit of John Marshall and a minority in America.” – 82.
    • “…Jackson believed the Bank undermined democracy by creating a monopoly of money. Of the Bank’s twenty-five directors, only five were answerable to the people. The rest served the interests of capital.” – 82.
    • “It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few men irresponsible to the people.” – Andrew Jackson, 82.
    • “Nor were the monopolists all Americans; almost a third of the stock of the Bank was owned by foreigners.” – 82.
    • “Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions….But when the laws undertake to add to these natural and just advantages artificial distinctions, to grant title, 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. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.” – Andrew Jackson, pp. 82-83.
    • “[Nicholas Biddle] paid to distribute [Henry] Clay’s speeches and provided other financial and logistical support.” – 84.
      • See pg. 85ff for information on how Nicholas Biddle and the bank fought tooth and nail against Jackson by attempting to undermine the economy when Jackson attempted to close the bank and was in the end successful.
      • This section is especially interesting and illuminative, but I’d have to copy entire pages if I were to do it justice…so you’ll have to get a copy of the book, sorry. 😛
    • “The mass of the people have more to fear from combinations of the wealthy and professional classes–from an aristocracy which through the influence of riches and talents, insidiously employed, sometimes succeeds in preventing political institutions, however well adjusted, from securing the freedom of the citizen.” – Andrew Jackson, speaking of the national bank, 87.
      • This sounds a bit like what Occupy Wall Street’ers are saying today…
    • “Biddle’s Bank had gained ‘almost entire dominion over the circulating medium, and with it, power to increase or diminish the price of property and to levy taxes on the people in the shape of premiums and interest.’ The Founders had fought to free Americans from such arbitrary rule. To continue the fight was the current generation’s ‘sacred duty.’” – 87.
    • “The worthy President thinks that because he has scalped Indians…he is to have his way with the Bank. He is mistaken….He may as well send at once and engage lodgings in Arabia.” – Nicholas Biddle, 90.
    • “Biddle’s willingness and ability to ravage the economy confirmed Jackson’s judgment of the malignant irresponsibility of the moneyed class. It was precisely this power of the Bank that had determined Jackson to destroy it. And he remained determined to do so, regardless of the pain the destruction produced.” – 90.
    • “Were all the worshipers of the golden calf to memorialise me and request a restoration of the deposits I would cut my right hand from my body before I would do such an act. The golden calf may be worshiped by others, but as for myself I will serve the Lord…My conscience told me it was right to stop the career of this destroying monster. I took the step fearlessly, believing it a duty I owed to my God and my country.” – Andrew Jackson, 90.
      • I’d like to study more about Jackson’s spiritual life…what was his religion? How did he reconcile his dangerous dueling habits with Christianity?
    • “Relief, sir! Come not to me, sir! Go to the monster!…Go to Nicholas Biddle. We have no money here….Biddle has all the money. He has millions of specie in his vaults at this moment, lying idle, and yet you come to me to save you from breaking….It is folly, sir, to talk to Andrew Jackson. The government will not bow to the monster.” – Andrew Jackson, to a spokesman for an assembly of “six thousand bankers, brokers, and merchants requesting relief”, 91.
    • “The Bank, Mr. Van Buren, is trying to kill me but I will kill it!” – Andrew Jackson, pg. 91.
    • “The congressional campaign of 1834 was the stormiest in memory. In Philadelphia mobs rioted against the Bank and against Biddle, forcing the Bank chief to barricade himself in his home, surrounded by armed guards. He and his family survived, but the Whigs–as the party of capital now called itself–almost did not.” – 91.
    • “Jackson’s defeat of Biddle and the Bank restored what the Jacksonians hoped would be democratic control of the money supply, but in fact it left the money supply even more at the mercy of the capitalists than before. The hundreds of state banks, now freed of the oversight of the Bank of the United States, issued bank notes profligately, producing speculative bubbles in all manner of commodities and property. Jackson could do nothing about most of the speculation, but he could curb that in land, and he did so by issues a ‘specie circular’ in July 1836 directing federal officers to accept only gold and silver in exchange for public lands….The measure dampened the speculation in land, but it simultaneously disordered the money system.” – 92-93.
      • I like how Brands seems even-handed. He points out the bad points of both sides – where the hopeful endeavors of each side fail miserably – and in this I think he provides us with significant insight into current discussions.
    • “The crusade against banks and the discrimination at the Land Offices between specie and bank paper has not been without its effect on the less intelligent part of our population,” Biddle declared. He couldn’t help gloating at the Democrats’ discomfiture, even though it devastate the economy and threatened to swamp his own bank.” – 94.
    • “Biddle retired in 1839, claiming ill health but secretly planning a candidacy for president.” – 94.
    • William Henry Harrison.
    • “He [Nicholas Biddle] suffered another blow when his old bank collapsed amid scandal in 1841.” – 95.

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