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Jackson’s Fight With The ‘Money Power’
The third in a series on TIMES OF TRIAL IN AMERICAN STATECRAFT Old Hickory's attack on Biddle's bank had some unexpected consequences
June 1956 | Volume 7, Issue 4
The businessmen comprising the latter were a quite different lot from the old. The Industrial Revolution required more men to finance, to man, and manage its railways, factories, and other enterprises than the old business world, comprising a few rich merchants, could possibly provide. The Industrial Revolution was set to absorb the greater part of the population.
Yet when the new recruits, who yesterday were mechanics and farmers, offered themselves not only as laborers but as managers, owners, and entrepreneurs requiring capital, they met a response that was not always respectful. There was still the smell of the barnyard on their boots, and their hands were better adapted to hammer and nails than to quills and ink. The aristocrats were amused. They were also chary of lending to such borrowers; whereupon farmers’ and mechanics’ banks began to be set up. These banks found themselves hindered by the older banks and by the federal Bank. They and their borrowers were furious. They resisted the federal Bank in suits, encouraged by sympathetic states’ rights politicians, and found themselves blocked by the federal courts.
Nor were their grievances merely material. They disliked being snubbed. Even when they became wealthy themselves, they still railed at “the capitalists” and “the aristocrats,” as David Henshaw of Massachusetts did, meaning the old families, the Appletons and Lawrences whom he named, the business counterparts of the political figures that the Jacksonian revolution had replaced. Henshaw and his fellow Jacksonian leaders were full of virtue, rancor, and democracy. Their struggle was not merely to make money but to demonstrate what they already asserted, that they were as good as anyone, or more so. In their denunciation of the federal Bank, one finds them calling it again and again “an aristocracy” and its proprietors, other than the federal government, “aristocrats.”
The Jacksonians, as distinct from Jackson himself, wanted a world where laissez faire prevailed; where, as Amos Kendall said, everyone would be free to get rich; where, as Roger Taney said, the benefits of banks would be open to all classes; where, as the enterprising exploiters of the land unanimously demanded, credit would be easy. To be sure, relatively few would be rich, and a good many already settling into an urban industrial class were beginning to realize it. But that consideration did not count with the Jacksonian leaders. They wanted a new order. But what they achieved was the age of the Robber Barons.
The attack on the old order took the form of an attack on the federal Bank for a number of reasons which may be summed up in political expediency. A factor in the success of the attack was that the president of the Bank, Nicholas Biddle, was the pampered scion of capitalists and aristocrats. He was born to wealth and prominence. He was elegant, literary, intellectual, witty, and conscious of his own merits. When at the age of 37 he became head of the largest moneyed corporation in the world he was wholly without practical experience. In his new duties he had to rely on brains, self-confidence, and hard work.
With these he did extraordinarily well. He had a remarkable grasp of productive and financial interrelations in the economy. The policies he formulated were sound. His management of the Bank, despite his inexperience, was efficient. His great weakness was naïveté, born of his ignorance of strife.
This characterization, I know, is quite contrary to the conventional one, which makes Biddle out a master of intrigue and craft such as only the purity of Andrew Jackson could overcome. But the evidence of his being a Machiavelli is wholly the assertion of his opponents, whose victory over him was enhanced by a magnification of his prowess. One of these, however, the suave Martin Van Buren, who knew him well and was a judge of such matters, ascribed no such qualities to him but instead spoke of the frankness and openness of his nature; it was in Daniel Webster that Van Buren saw wiliness.
Nicholas Biddle’s response to the Jacksonian attack was inept. He was slow in recognizing that an attack was being made and ignored the warnings of his more astute friends. He expected the public to be moved by careful and learned explanations of what the Bank did. He broadcast copies of Jackson’s veto message, one of the most popular and effective documents in American political history, with the expectation that people in general would agree with him that it was a piece of hollow demagogy. He entered a match for which he had no aptitude, impelled by a quixotic sense of duty and an inability to let his work be derogated. He engaged in a knock-down-drag-out fight with a group of experts as relentless as any American politics has ever known. The picture he presents is that of Little Lord Fauntleroy, lace on his shirt and good in his heart, running into those rough boys down the alley.
In his proper technical responsibilities Nicholas Biddle was a competent central banker performing a highly useful and beneficial task. It is a pity he had to be interrupted, both for him and for the economy. For him it meant demoralization. He lost track of what was going on in the Bank, he made blundering mistakes, he talked big. These things his opponents used tellingly against him. He turned from able direction of the central banking process to the hazardous business of making money, of which he knew nothing and for which his only knack lay in an enthusiastic appraisal of America’s great economic future. In the end his Bank of the United States broke, he lost his fortune, he was tried on criminal charges (but released on a technicality), and he died a broken man.