HENRY CLAY MONITORED the discomfiture of John Calhoun with quiet satisfaction. Of his congressional peer group, Calhoun was the one who had worried Clay the most. Calhoun had been the first to achieve cabinet rank, as Monroe’s secretary of war, and the first to win national office, as vice president, twice. Calhoun lacked the rhetorical power of Daniel Webster and, Clay liked to think, himself. But he possessed a formidable intellect and, judging by his accomplishments, a knack for political advancement and survival. To be vice president under John Quincy Adams and then Andrew Jackson was no mean feat. Yet Calhoun had finally been too clever for his own good. Or perhaps he was too principled. In either case, he was finished, Clay thought.
Clay had expected to run in 1832 against Calhoun or Martin Van Buren. But then Jackson made known he would seek a second term. Clay considered sitting out, waiting another four years until Jackson must surely retire. But by then he would be almost sixty, nearly as old as Jackson had been on entering office. Jackson appeared ancient these days, staggering from one malady or old wound to another, and though Clay felt fitter than Jackson looked, he didn’t want decrepitude to catch him in office. Besides, much could happen in four years. Much was already happening. The splintering of Jefferson’s party had created confusion out of which order was slowly re-forming. New ties were being established and new loyalties proclaimed. One group of anti-Jacksonians called themselves National Republicans. Another group gathered under the banner of the Anti-Masonic party. Clay had to act or be left behind.
He chose to act: to challenge Jackson. He had sufficient cause, besides ambition. Jackson was doing his best to block or undermine Clay’s American System. Jackson opposed tariff protection. He defended the 1828 tariff solely because it was federal law and he was the nation’s chief magistrate. Once the South Carolina nullifiers got the message that they couldn’t defeat Old Hickory, he might well side with the many and influential tariff opponents in his party.
Jackson’s position on internal improvements, the second pillar of Clay’s system, was unrelentingly hostile. And he had announced his opposition in a manner that couldn’t have been more insulting to Henry Clay. Kentucky had some of the worst roads in America; barges and steamboats brought goods efficiently to Kentucky’s river ports only for the goods to bog down traversing the last muddy miles inland. Clay persuaded Congress to approve federal funding for a road from Maysville, Kentucky, on the Ohio, to Lexington, Clay’s hometown. Kentucky cheered the accomplishment and applauded its sponsor.
Jackson vetoed the measure. The president contended that the bill exceeded the constitutional authority of the federal government. Roads and other improvements in the federal territories were one thing, and roads between states might sometimes pass muster. But roads within states were the responsibility of those states themselves. To tax Massachusetts, which had paid for its own roads, to build roads in Kentucky was beyond anything the framers of the Constitution had intended, Jackson said. And it was beyond anything he would approve.
To Clay’s thinking, Jackson’s Maysville Road veto was wrongheaded and regressive. For two decades he—Clay—had been making the case that national prosperity required national effort. A thriving national economy depended on robust means of transport, starting with solid roads. Jackson’s reasoning would prevent America from ever having such roads in states that lacked the resources of the long-settled East. Of course roads ran through individual states, but they would be—or could be—part of a national network. Jackson was stuck in the eighteenth century, and he would leave America stuck in the mud.
BUT IT WAS the Bank of the United States, the third pillar of the American System, that proved the central battleground between Jackson and Clay. Clay’s support for the bank was public and of long standing; Jackson’s opposition was of shorter duration but equally well known. “I think it right to be perfectly frank with you,” Jackson told Nicholas Biddle, the director of the bank. “I do not think that the power of Congress extends to charter a bank out of the ten mile square”—the federal district. “I do not dislike your bank any more than all banks. But ever since I read the history of the South Sea bubble I have been afraid of banks.”
Jackson’s fear of banks as a category gave Biddle hope, for he thought the president might be educated. In Jackson’s youth banks had been rare in America; to many Americans of Jackson’s vintage they remained mysterious and therefore threatening. Most people didn’t use banks; they conducted their business affairs in cash. They didn’t borrow; they kept their savings under the pillow or in tangible assets: a few more acres, another cow, an extension to the house. When they did encounter banks, it was on the banks’ terms. Farmers and shopkeepers might accept banknotes in lieu of cash, but the banknotes were only as reliable as the issuing banks. If the banks failed to honor their notes, the holders were out of luck. Ordinary people rarely took on mortgages, but when they did, the interest rates were dictated by the banks. Missed payments resulted in the loss of the mortgaged farms and houses. Meanwhile, bankers were often the wealthiest men in any city or town. They never really worked, that anyone could tell; they never mussed their clothes or calloused their hands. Yet they lived in the biggest houses and drove the finest carriages. It was all a great mystery to ordinary people, and the source of distrust and fear.
Nicholas Biddle spent much of his time attempting to allay the fears of the bank distrusters. He eschewed obvious involvement in politics. “There is no one principle better understood by every officer in the Bank than that he must abstain from politics,” Biddle asserted to an associate amid the presidential transition from John Quincy Adams to Jackson. “The course of the Bank is very clear and straight on that point. We believe that the prosperity of the Bank and its usefulness to the country depend on its being entirely free from the control of the officers of the Government, a control fatal to every bank which it ever influenced. In order to preserve that independence it must never connect itself with any administration—and never become a partisan of any set of politicians. In this respect I believe all the officers of the institution have been exemplary. The truth is that with us it is considered that we have no concern in politics. Dean Swift”—Jonathan Swift—“said, you know, that money is neither whig nor tory, and we say with equal truth that the Bank is neither Jackson man nor an Adams man. It is only a bank.”
But it was not only a bank. If Biddle thought Jackson an innocent in finance, Henry Clay deemed Biddle a child in politics, and he set about tutoring him in the ways of Washington. The bank’s twenty-year charter would last until 1836, and although Jackson opposed the bank in principle, he appeared inclined to let the charter run out rather than disrupt the economy by disturbing the bank’s current operations. Yet the bank’s investors and customers sought reassurance that the institution would last beyond 1836, and some agitated for early renewal of the bank’s charter.
Clay initially counseled patience. “It may be assumed as indisputable that the renewal of the charter can never take place, as the Constitution now stands, against the opinion and wishes of the President,” he wrote to Biddle in the fall of 1830. “A bill which should be rejected by him for that purpose could never be subsequently passed by the constitutional majority”—the two-thirds necessary for an override of a veto. “There would always be found a sufficient number to defeat such a bill, after its return with the President’s objections, among those who are opposed to the Bank on constitutional grounds, those who, without being influenced by constitutional considerations, might be opposed to it upon the score of expediency, and those who would be operated upon by the influence of the Executive.”
At this point Jackson had not announced his decision to run again, and Martin Van Buren appeared the likely bearer of the Jackson standard. Clay asserted that Van Buren and his allies sought to make the bank the central issue of the 1832 campaign. “If you apply at the next session of Congress, you will play into the hands of that party,” Clay told Biddle. “They will most probably, in the event of such application, postpone the question until another Congress is elected. They will urge the long time that the charter has yet to run; that therefore there is no necessity to act at the next session on the measure; and that public sentiment ought to be allowed to develop itself etc. These and other considerations will induce Congress, always disposed to procrastinate, to put off the question. In the mean time, the public press will be put in motion, every prejudice excited and appeals made to every passion.”
Biddle therefore should wait to seek renewal. “I think the session immediately after the next presidential election would be the most proper time,” Clay said. “Then every thing will be fresh; the succeeding presidential election will be too remote to be shaping measures in reference to it; and there will be a disposition to afford the new administration the facilities in our fiscal affairs which the Bank of the United States perhaps alone can render.”
BIDDLE TOOK CLAY’S advice, although he professed not to be concerned by the political considerations Clay described. “In respect to General Jackson and Mr. Van Buren,” he told a friend, “I have not the slightest fear of either of them, or both of them.” He was sure the American people would see the wisdom of support for the bank. “Our country-men are not naturally disposed to cut their own throats to please any body, and I have so perfect a reliance on the spirit and sense of the nation that I think we can defend the institution from much stronger enemies than they”—Jackson and Van Buren—“are. In doing this we must endeavor to reach the understandings of our fellow citizens by the diffusion of correct views of a subject which is much misunderstood.”
Biddle aided the diffusion of correctness by a covert campaign of public education. “It is obvious that a great effort will be made to array the influence of the Executive and his party against the Bank,” he wrote to one of his lieutenants. “It is not less evident that our most effectual resistance is the dissemination of useful knowledge among the people, and accordingly I am endeavoring to convey to all classes real and positive information in regard to the working of the institution and its beneficial influence on the prosperity of the nation. To do this newspapers must be used, not for their influence, but merely as channels of communication with the people.” Biddle had written various articles favorable to the bank and appealing to general readers. “For the insertion of these I will pay either as they appear or in advance. Thus for instance if you will cause the articles I have indicated and others which I may prepare to be inserted in the newspaper in question, I will pay at once to you one thousand dollars.” Discretion should be exercised. “There is as you perceive nothing in this communication which I should care to conceal, but as it might be misconstrued, I enclose your letter to me and request that you will have the goodness to return what I have written to you.”
The propaganda campaign went forward. It appeared to have good effects in much of the country. Congress seemed to be leaning Biddle’s way. But then Jackson revealed that he would seek reelection.
The news spoiled Biddle’s plans. Jackson was a strong favorite to win, no matter who ran against him. Most likely Jackson would still be president when the bank’s current charter expired in 1836. If he was, the bank would expire with the charter. Biddle began to think patience no longer a virtue.
HENRY CLAY REACHED the same conclusion. Jackson’s decision to run cast the bank’s future into grave doubt. If Jackson won, there was no way the bank would survive. Congress, yielding to Jackson’s opposition, might refuse to pass a new charter, or the president would veto it.
The only hope for the bank was to press for renewal before the election. Clay thought he could shepherd renewal through the legislature. Jackson would probably veto the renewal bill, but then the bank would become an issue in the campaign. And possibly—just possibly—the reaction to a Jackson veto would be sufficient to knock the general off his horse.
Which would be Clay’s only hope. Jackson looked nearly unbeatable. Clay’s one chance was to provoke the president into some intemperate action, one that would unite the various anti-Jackson elements into a single force. Vetoing the bank’s recharter could have the desired effect.
Clay didn’t show all his cards to Nicholas Biddle. “Have you come to any decision about an application to Congress at this session for the renewal of your charter?” he asked innocently. “The friends of the Bank here, with whom I have conversed, seem to expect the application to be made. The course of the President, in the event of the passage of a bill, seems to be a matter of doubt and speculation. My own belief is that, if now called upon he would not negative the bill.”
If Clay really believed that, he knew nothing about Andrew Jackson. In fact, he knew a great deal about Jackson, more than he cared to tell Biddle.
DANIEL WEBSTER’S INTEREST in Biddle and the bank was different from Clay’s, but not less intense. Webster did legal work for Biddle; that is, Biddle paid him for legal work. Webster in reality advised Biddle on politics relating to the bank, and he argued the bank’s case in the Senate, in exchange for which Biddle kept him on retainer. The money was important to Webster, as money always was. “I have had an application to be concerned, professionally, against the Bank,” he informed Biddle at one point. “I have declined, of course, although 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 retainer.”
Biddle sent the money. Webster, en route from Boston to Washington, stopped in Philadelphia and visited the director at the bank’s headquarters. Webster said he would test the ground for renewal. A few days later he reported to Biddle from the capital. “I have seen a great number of persons and conversed with them, among other things, respecting the Bank,” Webster said. “The result of all these conversations has been a strong confirmation of the opinion which I expressed at Philadelphia that it is expedient for the Bank to apply for the renewal of its charter without delay. I do not meet a gentleman, hardly, of another opinion, and the little incidents and anecdotes that occur and circulate among us all tend to strengthen the impression.”
On advice of Clay and Webster, Biddle took the fateful step. At the beginning of 1832 he requested early renewal of the bank’s charter.
Webster congratulated him on the decision. “I cannot but think you have done exactly right,” he told Biddle. “Whatever may be the event, it seems to me the path of duty is plain.” The renewal bill would certainly succeed, at once or eventually. “A failure this session, if there should be one, will not at all diminish the chances of success next session.”
Webster pitched in to make the bill succeed. He earned the money Biddle was paying him. “A disordered currency is one of the greatest of political evils,” he told the Senate. “It wars against industry, frugality, and economy; and it fosters the evil spirits of extravagance and speculation. Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money.” The bank was commonly accounted the pet of the rich, but Webster contended that it was really a mainstay of the middling. Without the bank, hardworking men and women would become victims of currency fraud and manipulation. “This is the most effectual of inventions to fertilize the rich man’s field by the sweat of the poor man’s brow. Ordinary tyranny, oppression, excessive taxation: these bear lightly on the happiness of the mass of the community, compared with fraudulent currencies and the robberies committed by depreciated paper.” In the absence of a national bank, merchants and their customers would be thrown back upon state banks, which, sadly, had a dismal record of integrity and solvency. Critics of the bank alleged that it benefited the East at the expense of the West. Webster asserted the opposite. The Western states were the ones most in need of sound currency, which their own banks failed most egregiously to provide. It was fairer to say that Western banks sometimes suffered from the existence of the national bank, which prevented their profiteering. But the people of the West benefited. “A dollar at St. Louis or Nashville becomes, at once, a dollar in New Hampshire or Maine.” Prices equalized across regions, to the advantage of consumers everywhere.
THE FOES OF the bank were at no loss for words. Missouri’s Thomas Benton, who acquired the nickname Old Bullion for his opposition to paper money and other artifices of banks, decried the Bank of the United States as unconstitutional, unethical, unprincipled and immoral. “Gentlemen of the South complain of the tariff, and doubtless with much reason,” he said. “But the day is at hand when every eye shall see, and every tongue shall confess, that the tariff is not the only, nor the largest, nor the most voracious vampire which sucks at their veins! The Bank of the United States divides that business with the tariff, and, like the stronger brother, takes the largest share to herself. She furnishes her brood of these insatiable suckers. She hangs them on every vein of gold and silver which the South and West exhibit. They gorge to repletion, then vomit their load into the vast receptacles of the Northeast, and gorge again.” What, in the day of reckoning, would be the result of this baleful conspiracy? “When that dread day comes, and come it will, and nothing is gained by putting it off, the towns and cities of the South and West, the fairest farms and goodliest mansions, will be set up at auction, to be knocked down to the bank agent, at the mock prices fixed in the compting room of the bank itself. And in these mock sales of towns and cities may be laid the foundations for the titles and estates of our future nobility—Duke of Cincinnati! Earl of Lexington! Marquis of Nashville! Count of St. Louis! Prince of New Orleans!” This specter was what the Senate was to decide upon. “Yes, sir! When the renewed charter 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; for when the lords and commons are established, the King will come of himself!”
Benton’s bluster played well in the West and among rank-and-file Jacksonians, who shared the president’s suspicions of bankers as a class. But it couldn’t keep Henry Clay from marshaling the votes to endorse renewal. The Senate vote was close; the victory in the House more comfortable. Bank critics alleged bribery, which doubtless occurred but probably didn’t much exceed the coziness of Webster’s arrangement with Biddle. Nor were the opponents’ pockets empty, for the state banks, which would benefit from the demise of their national competitor, showed their appreciation by similar means.