ple, not the states, made the Constitution; that it is the supreme law of the land; and that no authority except the Supreme Court of the United States has any right to declare an act of Congress unconstitutional. Webster closed with a thrilling appeal for "Liberty and Union, now and forever, one and inseparable!" Carolina When Congress passed a new tariff law in 1832 which South seemed to make protection the settled policy of the country nullifies the South Carolina hesitated no longer. A convention in that state tariff laws promptly declared the tariff acts of 1828 and 1832 to be "null and void, and no law, nor binding upon this state, its officers or citizens." South Carolina also threatened to withdraw from the Union if any attempt were made to enforce the laws which she had nullified. President Jackson warned the people of South Carolina that "the laws of the United States must be executed," and said, "If force should be necessary, I will have forty thousand Jackson's men in South Carolina to put down resistance and enforce the attitude law." When a member of Congress from South Carolina asked Clay's' compromise the president if he had any message for the people of that state, Jackson said, "Please say to my friends in your state that if a single drop of blood shall be shed there in opposition to the laws of the United States, I will hang the first man I lay my hands on, engaged in such treasonable conduct, upon the first tree I can reach." South Carolina prepared to resist the collection of the duties, and the country stood upon the verge of civil war. But before either side had struck a blow Henry Clay came forward as a peacemaker. He proposed a compromise tariff law by which the rates of duty were to be reduced gradually for the next nine years. Congress passed Clay's compromise, South Carolina accepted it, and thus the threatened danger was averted. But this compromise only postponed the inevitable conflict between the state rights men who believed in nullification and those who held with Jackson and Webster that the Constitution is the supreme law of the land. Jackson's Attack upon the Bank of the United States.At the same time that Jackson was fighting the idea of nulliRival banks fication he was attacking the Bank of the United States. You will recall that Hamilton proposed a national bank, which was chartered in 1791 for twenty years, and that a second national bank was set up in 1816. The second Bank of the United States, like the first, received the cash on hand of the government on deposit and issued bank notes which the people used as paper money. At this time there were a great many other banks whose notes circulated as money. They were called state banks because they were given the right to do a banking business by the states in which they were located. The state banks were jealous of the Bank of the United States because they thought that it was trying to get all the business away from them. Jackson shared in this dislike of the big and powerful national bank. He feared that it would interfere in politics and possibly control the government. He had long heard many people in the West and South call the Bank of the United States a monopoly, and he hated all monopolies. Jackson attacks the Bank of the United States Jackson began to talk against the bank as soon as he became president. He knew that its charter expired in 1836, and he wanted to prevent it from getting another. In 1832 Congress passed a bill renewing the bank's charter. Jackson vetoed this bill in a message in which he called the Bank of the United States "an unnecessary, useless, expensive, un-American monopoly." This veto made the bank question the leading issue in the election of 1832 which was just coming on. The foes of the bank rallied around Jackson, who was renominated for the presidency by the Democrats. Henry Clay, the most ardent champion of the bank in Congress, was the candidate of its friends who were soon to be called the Whigs. Jackson won by a large majority. There was no longer any hope that the bank could get its charter renewed before it expired in 1836. President Jackson was not content with his victory over the national bank in the election of 1832. He was a man of the most intense likes and dislikes, and by this time his wrath The removal against the bank was at white heat. He naturally felt that his of the reëlection meant that the people agreed with him. He ordered deposits the secretary of the treasury to stop putting the money of the United States in the national bank and to deposit it in various state banks. This removal of the deposits seriously injured the national bank and gave some of the state banks a great deal more money with which to do business. The Senate thought that the president had no right to remove the government's money from the national bank and censured him for his action. The state banks in which the money of the United States was deposited were called "pet banks" because they "Pet banks" enjoyed the special favor of the administration. The Panic of 1837.-The country seemed very prosperous during Jackson's second term. Men were digging canals, building railroads and factories, and buying public land in the hope A time of of selling it at higher prices. Much of this new business was wild speculation done with borrowed money. When the government money was deposited in the "pet banks" they loaned it freely to their customers. It was easier than ever to borrow money, and men were tempted to risk it in new enterprises. Banking seemed to be a very prosperous business, and new state banks, often with very little capital, sprang up all over the West. Because some of these banks were reckless in issuing and lending their notes, which were used as paper money, they were called "wild cat" banks. All these circumstances tended to make men speculate wildly in the hope of getting rich quickly. Many people were heavily in debt. If anything should happen to The causes make it necessary for the banks to redeem their notes and the people to their debts serious trouble was sure to come. pay The trouble came early in 1837, in the form of the most disastrous financial panic that our country has ever known. Unwise banking and wild speculation were the real causes of of the panic this panic, but an action of Jackson's during the last year of his administration helped to bring it on. was selling enormous quantities of the public land at this time. Martin Van The United States The income of the government from this source alone jumped from five million dollars in 1834 to nearly twenty-five millions in 1836. Much of this land was paid for with the notes of" wild cat" banks. Jackson began to fear that these banks might not be able to redeem their notes, so in 1836 he issued an order called the specie circular which directed that the public lands must be paid for in gold and silver. When the people realized that the government was losing faith in the bank notes they lost confidence too, and floods of these notes began to pour into the banks to be exchanged for gold and silver. Many of the state banks were unable to redeem their notes in coin and were forced to close their doors. Under these circumstances men who could not pay their debts were soon driven into bankruptcy, and presently the business of the country was almost paralyzed. Martin Van Buren The causes of the panic of 1837 developed while Jackson was president, but as the crash did not come until after he left the White House, Van Buren, his successor, had to bear most The effects of the panic of 1837, which came at the beginning of Van Buren's term of office, were severe and long continued. Many bankers and merchants failed, mines and factories were shut down, and thousands of men were thrown out of work. For some years many of our people found it difficult to make a living. The people blamed the government for what was largely the result of their own extravagance and reckless speculation. Cartoon of the Log Cabin and Hard Cider Campaign The hard times continued until the people, by their economy, industry, and thrift gradually overcame the evil effects of the panic. The Whigs wanted to reëstablish a national bank, but Van Buren successfully opposed them and in 1840 persuaded Congress to set up an independent treasury system under which the government keeps its cash on hand in its own vaults. The effects. of the panic A prolonged period of hard times in our country is very apt to be blamed upon the political party in power at the time. The "log This was especially true during Van Buren's administration, cider" camcabin, hard and the effect of it was seen in the election of 1840. In that paign of 1840 |