1. States’ Rights and the National Bank
Chapter 7.4

2. Tariff Raises the States’ Rights Issue
Congress would pass the Tariff of 1816 in order to protect the newly developed American industry, this tax on foreign made products would be increased two more times in the years 1824 and 1828

3. The Nullification Theory 1/2
Jackson’s vice-president called the tariff of
1828 a Tariff of Abominations since he
thought it was ruining the agricultural based
southern economy
There would begin a strong resentment that
the North was getting rich at the expense of
the South

5. The Nullification Theory 2/2
Calhoun would devise a nullification theory, “The South Carolina Exposition” questioned the legality of applying some federal laws to all states, and that if a state did not feel that a law was legal it could nullify it
Calhoun would also believe that if a state was not granted nullification then a state had a right to secede from the Union

6. Hayne and Webster Debate States’ Rights
January 1830, Senator Robert Hayne (SC) and Senator Daniel Webster (MA) would participate in one of the greatest debates in American history

7. Hayne’s stance not only dealt with the tariff and its influence on the southern economy, but that it “brings the States and the people to the feet of the federal government, and leaves them nothing they can call their own”

8. April 13, 1830, Jackson would state his position: “Our Union: it must be preserved.”

9. Calhoun would disagree and state: “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 benefit and burden of the Union”
Jackson & Calhoun would not work together again

10. South Carolina Rebels
1832, Congress passes another tariff which South Carolina found unacceptable
The state would rule them null and void & threatened to secede from the Union if customs officials tried to collect duties
Force Bill 1833, allowed the federal government to use the army and navy against SC if state authorities resisted paying property dues
A bloody confrontation was avoided when the “Great Compromiser” stepped in and devised a compromise: a tariff bill that would gradually lower duties over a 10 yr period

11. Jackson Attacks the National Bank
Jackson does not like the BUS and in 1832, vetoed the bill to re-charter the Bank

12. Jackson Opposes the Bank
Clay and Webster wanted to enter the issue of the BUS into the election of 1832
The two would underestimate the public’s dislike of the BUS as well as Jackson’s political skill

13. Jackson demonstrated how the BUS was a privileged institution
All federal tax revenues deposited into the BUS
BUS stockholders not the average American taxpayers earned the interest
Bank’s president Nicholas Biddle often extended loans to congressman at much lower rates of interest than the bank gave to the avg. citizen

14. Pet Banks 1/2
1832, Jackson tells running mate Martin Van Buren that the BUS “corrupted our statesmen” and wanted to “destroy our republican institution”
Jackson wanted to destroy the BUS, and thus elected a secretary of treasury that was willing to place all government funds in certain state banks or “pet banks” because of their loyalty to the Democratic Party

15. Pet Banks 2/2
Nicholas Biddle would attempt to save the BUS by demanding repayment of loans and refusal to make new loans
He hoped frustration would demand a new charter, it did not he was forced to adopt a more generous loan policy and it eventually went out of business

16. Whig Party Forms
Jackson’s tactics and policies angered many, including his own party
Clay, Webster and Adams would form the Whig Party
The Whig Party backed the ideals of the American System, and thought the president had gained too much power

17. Van Buren Deals with Jackson’s Legacy
Martin Van Buren with the help of Jackson wins the election of 1836

18. Jackson’s Legacy 1/2
Many of Jackson’s “pet banks” went wild and printed bank notes well in excess of the amount of gold and silver that they really had
Realizing that the bank notes virtually had little worth, Jackson caused the Treasury Department to issue an order stating that only gold and silver (specie) could be used to purchase public land

19. Jackson’s Legacy 2/2
When this was made public people ran to bank to trade in their paper money,
Only to be told there was a suspension on trading in your money
Panic of 1837: bank closings, collapse of the credit system, unemployment
Van Buren would try to reduce federal spending and an independent treasury that would use only silver and gold but they both just made things worse

20. Harrison and Tyler
Election of 1840: William Henry Harrison (Whig) defeats Van Buren (D.R.)
Harrison was deemed a war hero and a man of the people where as Van Buren was seen as a pampered privileged aristocrat (opposite)

21. Harrison would die one month after his inauguration, and his Vice President, John Tyler would assume the duties, known as
“His Accidency”