President Andrew Jackson did not want banknotes in the American economy, as he was an adherent to the gold standard. Daniel Walker Howe, What Hath God Wrought: Transformation of America, 1815-1848, 376. He would be forced to confront Nicholas Biddle, the President of the Second Bank of the United States.
In January 1832, Biddle applied for renewal of the Second Bank of the United States’ national charter, four years earlier than it expired. Id. He hoped that Congress would promptly pass the bill and that Jackson would defer to Congress on the subject. See id. Recharter passed the House of Representatives 107 to 85, to extend the Bank’s charter another 15 years. Id. at 379 citing Jean Wilburn, Biddle’s Bank: The Crucial Years (New York, 1967); John McFaul, The Politics of Jacksonian Finance (Ithaca, N.Y., 1972), 16-57.
On July 10, 1832, Jackson “issued the most important presidential veto in American history.” Daniel Walker Howe, What Hath God Wrought: Transformation of America, 1815-1848, 379. Jackson took the position that the “executive and legislative branches were not bound by the judiciary and could judge constitutional questions for themselves,” and his determination was that the Bank was unconstitutional. See id. at 380.
In Jackson’s veto message, he attacked the Bank primarily on political grounds, not economic grounds, stating that it was a threat to the sovereignty of Americans as a whole. A notable excerpt reads:
The rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society—the farmers, mechanics, and laborers—who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government.” Presidential Messages, II, 576-91.
Jackson was vouching for states’ rights and he was using demagoguery in making his point. Biddle, upon reading the veto message, commented that “it has all the fury of a chained panther biting the bars of his cage,” and characterizing the message as a “a manifesto of anarchy.” Nicholas Biddle to Henry Clay, Aug. 1, 1832, quoted in Thomas Govan, Nicholas Biddle, (Chicago, 1959), 203.
In effect, Jackson’s action of eliminating the national bank enabled regional and local banks “to behave more irresponsibly than ever.” Daniel Walker Howe, What Hath God Wrought: Transformation of America, 1815-1848, 383.
Regardless, Jackson’s position, which balanced “the defense of the people against the unfairly privileged and the strict construction of the Constitution” would be the platform for the Democratic Party for decades to come. See id. at 386. Jackson had tapped into the populist tendencies of American society, politicizing things in a way that previously had not been done. He was also remarkably effective at it, to his credit.
This brand of politics would define Jacksonian Democrats, and it can still be observed today. Many populist policies can be justified in that they are supposedly “equal” and “fair” when in reality they ignore the effects of the policies. In this instance, Jackson had embraced a policy, elimination of the Second Bank of the United States, which appeared to destroy a massive corporation for the benefit of ordinary Americans, when in fact it did more harm than good.