Andrew Jackson (1767-1845) was the seventh president of the United States, winning election to the White House in 1828 and 1832 as candidate of the Democratic Party which Jackson helped to found. Jackson’s most important accomplishment, which had reverberations for decades to come, was the “Bank War,” when he destroyed the Second Bank of the United States. A brief study of the background to that event may give us some insight into today’s national and world crises.

It was a time of rapidly growing population and prosperity, following the doubling of the nation’s size with the 1803 Louisiana Purchase, conclusion of the War of 1812 against England, stability in international trade after the end of the Napoleonic Wars in Europe, early stirrings of the Industrial Revolution, and US acquisition of Florida, settlement of the border between Maine and Canada, and displacement of the decimated Indian tribes that were being shunted to territories west of the Mississippi.

Examples of major changes were the use of the cotton gin that made slave plantations in the South immensely profitable, the opening of the Erie Canal in 1825, and the start of the B&O railroad in 1828 with the promise of railroads to revolutionize commerce and transportation.

Politically, the nation was beginning to revert to political factions as it had suffered during the 1790s under presidents George Washington and John Adams. It was then that Treasury Secretary Alexander Hamilton with his First Bank of the United States presided over the Federalists, facing off against the Republicans under Thomas Jefferson who opposed central banking and favoured decentralized government with maximum power devolving to the states and an electorate of free white property owners.

Jefferson gained the presidency over John Adams through the “Revolution of 1800” and was followed after a second term by his Virginia disciples James Madison and James Monroe, who also served two terms each. All three, as was Washington, were slaveholders. Whereas Hamilton, killed in a duel by Vice-President Aaron Burr in 1804, led a Federalist Party whose base was largely in New York and other population centers, the Republicans held sway through an early form of the “Solid South,” sometimes derisively called “the Slavocracy.” Even Monroe’s successor, John Quincy Adams, son of the second president, having been Monroe’s secretary of state and nominally a Republican, followed in the footsteps of the Virginians into the White House.

Even so, John Quincy Adams came within a whisker’s breadth of losing the election of 1824 to another Republican contender, General Andrew Jackson, hero of the 1814 Battle of New Orleans, where his army dealt the British one of their worst defeats in history, and the military commander who cleared the Indians out of the Southeast from Florida all the way, eventually, to the “Father of Waters.”

We’ll not moralize here about the damage done to the Indians and African slaves by our forefathers, though we will point out that as early as the 1790s, an eventual civil war between the northern and southern states was being predicted.

In the 1824 election, General Jackson actually gained a plurality of both popular and electoral college ballots. But with him and John Quincy Adams running neck-and-neck, there were two additional candidates splitting the vote. One was Henry Clay, Senator from Kentucky, and the other was William Crawford of Georgia, secretary of the treasury. All four candidates were Republicans, still the party of Jefferson and his successors!

So without an electoral college majority, the election was thrown into the House of Representatives, with each state getting one vote. There Adams was elected due to support from Henry Clay, who then became Adams’ secretary of state.

For the next four years, Jackson and his supporters, including John C. Calhoun, the powerful senator from South Carolina, schemed in preparation for the next election in 1828. John Quincy Adams as president was an outstanding administrator, who had begun to lean in the direction of Henry Clay’s “American System.” He thus had strong predilections toward high protective tariffs, leading to the 1828 “Tariff of Abominations” and a program of “internal improvements,” mainly a national network of roads and canals, to be financed by the Second Bank of the United States.

Unfortunately for Adams, his infrastructure program was voted down in Congress as being unconstitutional as a federal government initiative, with Jackson lobbying against it from the sidelines. In fact, Jackson was becoming the focal point of what was now being called the Democratic Party, as opposed to the “National Republicans” now being led by Clay and Daniel Webster of Massachusetts.

The name “Democratic Party” was chosen to get out the vote of huge numbers of newly enfranchised labourers and workers in the trades as opposed to the wealthy landowners and elite merchants of the eastern cities who were growing rich on the infusion of paper money and bank notes from the growing number of bank branches run out of Philadelphia by the Second Bank of the United States.

Jackson defeated Adams soundly in 1828 with John C. Calhoun as his vice-president. With Adams out of the picture, the focal point of the Democrats retained a southern cast, though they gained valuable support from upstate New York, where Martin Van Buren had become the political boss. Van Buren would later become Jackson’s second term vice president.

But in both the 1824 and 1828 elections, the president of the Second Bank of the United States, Nicholas Biddle, was an outspoken supporter of John Quincy Adams. To Jackson, it was the corrupt Money Power of the Second Bank and its wealthy stockholders from Philadelphia, New York, and especially Britain and continental Europe, who had made themselves the greatest power in the country. So Jackson early on made up his mind to challenge the bank and its influence; later he would decide to kill it.

Looking back a bit, the Second Bank of the United States had been established through the signature of President James Madison in 1816. The charter of Alexander Hamilton’s First Bank had expired in 1811. Thus with the start of the War of 1812, the government had lost what had been its depository and borrowing agent at a time when hostilities required a major increase in expenditures for shipbuilding, creation of a standing army, and shoreline defenses.

In other words, the US government was facing bankruptcy and had lost the ability to borrow its way out of military defeat. Don’t let the writing of the Star Spangled Banner fool you. This situation helped account for the miserable performance of the nation’s armed forces during the War of 1812, including the burning of the nation’s capital in 1814. It had only been General Jackson’s army and its heroic performance at New Orleans, actually taking place after the Treaty of Ghent had been signed ending the war, which, along with a couple of successful naval engagements, kept the memory of that conflict from being an unmitigated humiliation.

Consequently, and in order to avoid a similar future debacle, Congress passed legislation for the Second Bank of the United States, the “BUS,” at the end of Madison’s second term. Note, however, that prior to and parallel with the Second Bank, an extensive network of state and local banks had grown up throughout the country, each issuing its own paper bank notes, that were later termed derisively “wildcat banks.”

Some of these were state-owned banks while many others were state-chartered private banks. All of these banks were required to maintain a “reserve” of gold and silver coins or bullion - i.e., “specie” - at a valuation ratio of 15 to 1 in order to redeem paper notes on demand. If a “run” on the bank occurred and it failed to fulfill its redemption responsibilities, the bank would fail and depositors would lose their money. There was no government insurance on deposits back then.

In 1816 the BUS stepped in to issue its own national bank notes via lending and also was able to use government funds collected through taxes and tariffs as part of its lending base and to buy up notes from state and local banks. Of course, this gave the BUS a great deal of power over the state and local banks, as it frequently demanded redemption in specie and sometimes shut down institutions it felt were unsound, politically suspect, or otherwise did not like. The BUS also lent money to members of Congress and made its own decisions about who was “worthy” of a loan and who was not.

In fact, early on the BUS plunged the nation into a “panic” - called today a “recession” - to wring bad loans and speculation with borrowed paper out of circulation. This caused the government to realize that they had created something of a “monster,” which became one of the BUS’s nicknames. This also caused the government to realize the obvious - that economic power equalled political power.

Further, this power was in the hands of a small number of investors who, by law, owned 80 percent of the bank’s assets, investors who also had control of the money collected and deposited by the government for its own lawfully authorized purposes. Thus, according to observers like Andrew Jackson and his supporters, the BUS, which they still viewed as unconstitutional under the venerable Jeffersonian criteria, had put the country in the hands of a moneyed “aristocracy.” That’s what Jackson called it. And he was right - it did.

So Andrew Jackson became president, and the showdown with the bank began. It lasted throughout Jackson’s two terms. Jackson surmounted tremendous obstacles and opposition, including censure by the Senate, a hostile news media with newspapers having become a powerful political force, disagreements within his own administration, refusal by one secretary of the treasury to remove government funds from the BUS and replacement with a more compliant official, constant visits from lobbying businessmen, threats from Biddle and Biddle’s refusal to comply with government requests for information, intense lobbying by Biddle against Jackson’s reelection in 1832, and wear and tear on Jackson himself, including an attempted assassination where the shooter fired twice point-blank, but his pistols both misfired.

On one occasion, when vice president Van Buren visited Jackson in the White House, the president lay exhausted on the sofa. Barely audible, he croaked in words that still ring powerfully, “I will kill the bank or the bank will kill me.” The Whig Party, to which one-term congressman Abraham Lincoln belonged, came into existence specifically to oppose Jackson’s actions. They called him a “detestable, ignorant, reckless, vain, and malignant tyrant.” But he won.

The chronicle of those years is fascinating but is beyond the scope of an article. An excellent short book is Dr. Robert V. Remini’s Andrew Jackson and the Bank War (W.W. Norton & Company, 1967). Remini has also published a highly readable biography of Jackson. You can also read my own book, Our Country, Then and Now, for more detail on the financial history of the US.

But this is what is so amazing: Even with the demise of central banking, or perhaps because of it, Jackson performed accomplishments that today seem unbelievable. Under Jackson, the federal government paid off all government debt; it ran an annual budget surplus with excess money turned over to the states for infrastructure and other needs; and it later set up an Independent Treasury with regional branches as depositories and disbursing centers.

Thus the state and local banks couldn’t even touch public funds unless the government authorized bonds for sale. Meanwhile, the government ran a profitable business through the US mints of coining money for everyday use by using gold and silver purchased from private brokers, a business that boomed after the California Gold Rush.

Thus despite the ups and downs of the economy, the government was able to ensure that there was a sufficient quantity of gold and silver coinage for ordinary working people to live and function no matter what was happening with large businesses and the wealthy class. This was a program Lincoln continued with the Greenbacks of Civil War days, a currency that lasted into the 20th century.

In fact, keeping a circulating currency of relatively small denominations available for ordinary people to use has been a feature throughout most of our history until recent times when inflation has virtually destroyed the value of US currency of any denomination. We can thank the moneyed aristocracy for that.

Meanwhile, the moneyed aristocracy still runs the country, in fact every country in the Collective West, especially since they set up the Federal Reserve in 1913 to run the US and eventually rule the world. That’s when the final nail was driven in the coffin of Andrew Jackson’s system and his Independent Treasury abolished.

All the money now paid into the US government is in the hands of the moneyed aristocracy and is used as they see fit. Congress and the president both just follow orders. One of the best examples was how prior to World War II the elitist Council on Foreign Relations prevailed on the government to establish as its war aim the attainment of global military domination. The result was the National Security State and eventually today’s collapsing empire.

In today’s society, almost every politician is bought and sold by the aristocratic moneyed class as are almost all institutional leaders. The individual citizen counts for little. But it starts with the monetary system that Andrew Jackson once tried to reform.

Richard C. Cook is a retired U.S. federal analyst with extensive experience across various government agencies, including the U.S. Civil Service Commission, FDA, the Carter White House, NASA, and the U.S. Treasury. He is a graduate of the College of William and Mary. As a whistleblower at the time of the Challenger disaster, he exposed the flawed O-ring joints that destroyed the Space Shuttle, documenting his story in the book “Challenger Revealed.” After serving at Treasury, he became a vocal critic of the private finance-controlled monetary system, detailing his concerns in “We Hold These Truths: The Hope of Monetary Reform.” He served as an adviser to the American Monetary Institute and worked with Congressman Dennis Kucinich to advocate for replacing the Federal Reserve with a genuine national currency. See his new book, Our Country, Then and Now, Clarity Press, 2023. He has recently been named a Research Associate of the Centre for Research on Globalization (CRG).

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