 Opponents called Jackson "King Andrew I" for his opposition to federal banks. Andrew Jackson and Banking Crisis of 1833
The recharter of the Bank of the United States became the focus of the presidential campaign of 1832 between Jackson and Clay. The real issue, however, was Jackson. Analysis of Jackson's election victory showed a decline in his support and the rise of a strong opposition.
During his second administration, Jackson continued to use the veto and took unprecedented actions: in 1833, without congressional approval, he ordered federal deposits removed from the Bank of the United States and placed in state banks, forcing the resignation of the cabinet officer who refused his directive; and in 1836 he issued the Specie Circular, which required the payment of government debts in hard money.
Jackson's 1833 proclamation against nullification defining the Union as indissoluble assaulted states’ rights advocates. In consequence, his opponents denounced him as a tyrant, "King Andrew I," and united to form the Whig Party. By the end of the decade, the second American party system had emerged in all the states.
Andrew Jackson framed his opposition to a federal bank in familiar terms:
“The paper-money system and its natural associations--monopoly and exclusive privileges--have already struck their roots too deep in the soil, and it will require all your efforts to check its further growth and to eradicate the evil. The men who profit by the abuses and desire to perpetuate them will continue to besiege the halls of legislation in the General Government as well as in the States, and will seek by every artifice to mislead and deceive the public servants. It is to yourselves that you must look for safety and the means of guarding and perpetuating your free institutions. In your hands is rightfully placed the sovereignty of the country, and to you everyone placed in authority is ultimately responsible."
Words from over 175 years ago speak to the continuation of the classic battle between the wealthy and working class of this country. Central to this debate is what role government has in the regulation of economies and financial transactions. Inherent within this debate is the role of big government working to prop up special industries and businesses with outright monopolies for public services and or single source government contracts without oversight.
Andrew Jackson saw the dangers of a banking system left to its own moral code:
"But it will require steady and persevering exertions on your part to rid yourselves of the iniquities and mischiefs of the paper system and to check the spirit of monopoly and other abuses which have sprung up with it, and of which it is the main support. So many interests are united to resist all reform on this subject that you must not hope the conflict will be a short one nor success easy.
My humble efforts have not been spared during my administration of the Government to restore the constitutional currency of gold and silver, and something, I trust, has been done toward the accomplishment of this most desirable object; but enough yet remains to require all your energy and perseverance. The power, however, is in your hands, and the remedy must and will be applied if you determine upon it."
It is all too depressing that history began repeating itself in September 2008 when the banking system, led by big banks reminiscent of the Bank of the United States from the Jacksonian Era, squalled for (and got) government money to save them from their own excesses.
Special interest money buys access and privilege of contracts to generate special interest funding for political parties favors. Only the working poor are without a voice in this loop. Their job is to pay taxes to support the rich in this economic model.
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