10/22/2015 CURRENCY, CREDIT, AND CRISIS. Some more volleys, and historiographical reflection. Professor Rael, class of Mon. 10/19:

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Source: Clive Brunskill/Getty Images Europe (Nov. 9, 2013) Some more volleys, and historiographical reflection Professor Rael, class of Mon. 10/19: John C. Calhoun to Virgil Maxcy (Sept.

1 Source: Clive Brunskill/Getty Images Europe (Nov. 9, 2013) Some more volleys, and historiographical reflection Professor Rael, class of Mon. 10/19: John C. Calhoun to Virgil Maxcy (Sept. 11, 1830): I consider the tariff act as the occasion, rather than the real cause of the present unhappy state of things. The truth can no longer be disguised, that the peculiar domestick institution of the Southern States and the consequent direction which that and her soil and climate have given to her industry, has placed them in regard to taxation and appropriations in opposite relation to the majority of the Union. Professor Rael, class of Mon. 10/19: John C. Calhoun to Virgil Maxcy (Sept. 11, 1830): I consider the tariff act as the occasion, rather than the real cause of the present unhappy state of things. The truth can no longer be disguised, that the peculiar domestick institution of the Southern States and the consequent direction which that and her soil and climate have given to her industry, has placed them in regard to taxation and appropriations in opposite relation to the majority of the Union. Why the interest in the real cause? 1

2 Professor Rael, class of Mon. 10/19: John C. Calhoun to Virgil Maxcy (Sept. 11, 1830): I consider the tariff act as the occasion, rather than the real cause of the present unhappy state of things. The truth can no longer be disguised, that the peculiar domestick institution of the Southern States and the consequent direction which that and her soil and climate have given to her industry, has placed them in regard to taxation and appropriations in opposite relation to the majority of the Union. Why the interest in the real cause? o Recall the discussion question of last Wed., 10/14: The Civil War has cast a long shadow over the mantra of states rights. Do you see the same shadow? Professor Rael, class of Mon. 10/19: John C. Calhoun to Virgil Maxcy (Sept. 11, 1830): I consider the tariff act as the occasion, rather than the real cause of the present unhappy state of things. The truth can no longer be disguised, that the peculiar domestick institution of the Southern States and the consequent direction which that and her soil and climate have given to her industry, has placed them in regard to taxation and appropriations in opposite relation to the majority of the Union. Why the interest in the real cause? o Recall the discussion question of last Wed., 10/14: The Civil War has cast a long shadow over the mantra of states rights. Do you see the same shadow? Professor Selinger, class of Wed. 10/7: Thinking about the substantive policy commitments of the parties... [Slavery] was the most accusing, the most tragic and the most dangerous of all questions... like a man banishing a dreaded image from consciousness, [the nation] turned and twisted desperately to suppress and deny and bury the terrible fact. For almost a quarter of a century after the Missouri crisis, slavery was blocked from gaining full embodiment as a specific political issue. The trauma of 1820 was too intense. Yet the question could not be exorcised by repression. It remained ever just out of sight, occasionally flaring up for a moment in an exchange on the floors of Congress... like a wild dream, shaking the night with its burst of anxiety; then disclaimed and forgotten, as the morning came again, and people returned securely to debating the Bank or the tariff. Arthur M. Schlesinger, Jr., The Age of Jackson,

Today s author (and yesteryear s), Schlesinger (1917-2007)! Thinking about the substantive policy commitments of the parties... Arthur M. Schlesinger, Jr., The Age of Jackson, 424.

3 Today s author (and yesteryear s), Schlesinger ( )! Thinking about the substantive policy commitments of the parties... Arthur M. Schlesinger, Jr., The Age of Jackson, 424. Today s author (and yesteryear s), Schlesinger ( )! Further on, the same page and the following one: The Jacksonians in the thirties were bitterly critical of abolitionists. The outcry against slavery, they felt, distracted attention from the vital economic questions of Bank and currency, while at the same time it menaced the Southern alliance so necessary for the success of the reform program. A good deal of Jacksonian energy, indeed, was expended in showing how the abolition movement was a conservative plot. Arthur M. Schlesinger, Jr., The Age of Jackson, Today s author (and yesteryear s), Schlesinger ( )! It has been said, unkindly but not wholly unfairly, that every page of The Age of Jackson, his first important work, voted for Franklin Roosevelt. Sean Wilentz, review of Schlesinger s A Life in the Twentieth Century, Dec. 25,

Source: Jessica Lepler, The Many Panics of

Nicholas Biddle (1786-1844), president of

4 Source: Jessica Lepler, The Many Panics of 1837 (2013), p Nicholas Biddle ( ), president of the Second Bank of the United States Set-to between Old Hickory and Bully Nick. Library of Congress Prints and Photographs Online collection, LC-USZ

Set-to between the champion old tip & the swell Dutcheman of Kinderhook 1836.

Cullen Bryant (1794-1878), editor of the New York Evening Post : The real issue lay not between the people and the

The position of locofocos like William Kindred Spirits, by Asher Durand. 1849 (Thomas Cole and W. C. Bryant) 5

5 Set-to between the champion old tip & the swell Dutcheman of Kinderhook Library of Congress Prints and Photographs Online collection, LC-USZ The position of locofocos like William Cullen Bryant ( ), editor of the New York Evening Post : The real issue lay not between the people and the Bank of the United States, but between the people and all incorporated institutions. The position of locofocos like William Cullen Bryant ( ), editor of the New York Evening Post : The real issue lay not between the people and the Bank of the United States, but between the people and all incorporated institutions. Kindred Spirits, by Asher Durand (Thomas Cole and W. C. Bryant) 5

6 o Sequence of events: Jackson s veto of bill to recharter the Bank in Jackson s victory in (re)election of 1832, fought largely on the Bank question. Jackson s removal of federal deposits from the Bank; these deposited in state banks. Credit boom, land speculation: quintupling of public land sales Specie circular of 1836: public lands must be paid in specie. o Schlesinger: In destroying the Bank, Jackson had removed a valuable brake on credit expansion; and in sponsoring the system of deposit in state banks, he had accelerated the tendency toward inflation (218) o Schlesinger: In destroying the Bank, Jackson had removed a valuable brake on credit expansion; and in sponsoring the system of deposit in state banks, he had accelerated the tendency toward inflation (218) o Temin: This story is clear, logical, and unambiguous For those who do not admire Jackson, it has provided ample reason for rejecting his policies. For those who support Jackson, it has represented the dire consequences of good intentions thwarted by the speculative propensities of the American people. In either case, the conviction that Jackson s policies were highly destructive of economic stability is a major starting point for the evaluation of Jacksonian democracy (16) 6

7 o Schlesinger: In destroying the Bank, Jackson had removed a valuable brake on credit expansion; and in sponsoring the system of deposit in state banks, he had accelerated the tendency toward inflation (218) o Temin: This account is in error at three main points. First, the boom did not have its origins in the Bank War. It resulted from a combination of large capital imports from England and a change in the Chinese desire for silver which together produced a rapid increase in the quantity of silver in the United States Second, the Panic of 1837 was not caused by President Jackson s actions. And third, the depression of the early 1840 s was neither as serious as historians assume nor the fault of Nicholas Biddle. (16) o So what do we learn from the episode? o So what do we learn from the episode? More about the confrontation of ideas in antebellum America, originating in opposing notions of what constitutes a good economic system this time, confronting each other in the sphere of the credit system. Political economist William M. Gouge, as quoted by Schlesinger: If there ever should be a surplus of public funds, we know not what particular merit there is in the banking and speculating interests, that they should lay claim to its exclusive use If any classes of the community deserve the favor of the government, in any country, they are the farmers, mechanics, and other hardworking men (240) 7

8 o So what do we learn from the episode? Awareness of the contemporary lenses that historians inevitably bring to their subject which implies historical controversy, and swings of opinion on historical subjects. 8

An Essay Review on William E. Leuchtenburg s Franklin D. Roosevelt and the New Deal (1932 1940) Eli Hersberger. Dr.

An Essay Review on William E. Leuchtenburg s Franklin D. Roosevelt and the New Deal (1932 1940) Eli Hersberger Dr. Katherine Tinsley March 29 th, 2006 2 Franklin D. Roosevelt and the New Deal (1932 1940)