Jackson was determined to defeat all of the forces that supported the bank. He challenged the head of the Second Bank of the United States, Nicholas Biddle, by removing the government’s deposits and refusing to renew the bank’s charter. FULL ARTICLE by Dan O’Connor
Source link: http://blog.mises.org/11484/andrew-jackson-then-and-now/
Andrew Jackson: Then and Now
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For some people I know, Jackson is mainly known (and hated) for his dealing with the Native American tribes. Jackson started the removal era, where the tribes were removed (in many cases forcabily) to Oklahoma.
The author paints a rosey picture of Jackson. However, the majority of reviews I have came across is much less flattering.
I tend to think his actions were driven by personal conflict, not what was best for the US. The depression that resulted from his actions further a greater division in the US.
Well, he was a politician after all, and his previous employment was in the business of festive slaughter.
He nailed the bank issue though. I don’t know about the depression you (greg) mentioned but if there was one it would make sense as a correction caused by the end of the bank.
Yup, Greg he suffered from depression along with dysentery, dropsy, smallpox and malaria.
Was prosperous because of slave ownership… Adding to his earnings were horse racing and cockfighting. He was nothing more than a career government official carrying out Federal atrocities on Native Americans.
No thank you, one good deed with the banking system of the day just doesn’t make up for his self-serving ways.
Jackson was a typical backwoods bumpkin who believed himself to be the smartest man in the room. He absolutely did not respect authority. He invaded Florida against orders and US Treaty obligations. He used the Cherokee to help him defeat the Creeks with a Cherokee chief even saving his life then he stabbed the Cherokee in the back and refused to even talk to the man who saved his life.
Jackson’s actions against the Cherokee was mainly driven by the fact that gold was found on Cherokee land in north Georgia and Jackson’s cronies wanted them moved. Jackson essentially stole their land and then tortured them by making them walk to Oklahoma.
But directly related to the article you cannot honestly write about Jackson and his economic policies without mentioning his “pet” banks. Contrary to popular myth Jackson did not oppose banks. He only opposed Biddle.
When James Madison saw how reckless the states and their banks were he changed him mind on the charter of a national bank. Jackson had been convinced by his cronies that the state banks were being abused by the National Bank. He was too intellectually dull to understand economics. He took actions to remove all constrain from the state banks. The result was that they rushed to massive inflation of their currencies. Jackson became alarmed when he realized that government land sales, a major source of income for the federal government, were accepting rapidly depreciating state bank currencies.
In an effort to control the banks he issued the Specie Circular. That slammed the breaks on the inflation and the economy hit a wall. In only a few years Jackson moved the national economy from stability to hyper-inflation, then to a sudden and violent deflation.
The result of Jacksons horrible monetary policy was that he brough on the worst economic contraction our country had see up to that time.
Just for the record Biddle was a crook, but Jackson was a fool.
Sounds like a thorough study of Jackson should provide an excellent example of the dangers of political power, including the power of government over money.
i dont know why the jackson went after the tribes and did what he did along with others – weird and power hungry i guess.
as for the state banks, if notes were being printed in excess of specie amounts, why would lib/austrian/anarchists want the federal govt getting involved.
wouldnt the weak banks meeting their doom have been preferred?
39n118w,
Congress forced the 2nd National Bank to take state bank notes when it approved its charter. The state banks played the game of overissuing for southern and western states to buy imports from Europe especially England. Then England returned the notes for redemption in gold.
I am a free banking advocate, but during the Jacksonian era we did not have free banking.
Check out Rothbard’s Panic of 1819 http://mises.org/rothbard/panic1819.pdf to get a feel for the time. It does not get into the Jacksonian era but it does give you an understanding of the problems with the state banks and the state governments.
“Most modern-day politicians will argue that there is no need to discuss monetary policy because the Fed has performed well. However, Austrian economists can point to many flaws in US monetary policy since the Fed’s creation, not least the fact that the dollar has lost 97 percent of its purchasing power since 1913.”
im not sure why the author and others keep bringing this “has lost so and so since 1913″ up.
to me its blatant one-sidedness intending to deceive and the authors should be shamed and exposed.
noone makes a 1913 salary either and many prices have fallen adjusted for inflation.
when i first started reading mises (not knowing anything about money) i read “inflation pushes prices up”. to me that automatically meant beyond the pace of wages in a way that sets people back.
harmful price increases, iow. what disingenuous writing and deceit – and this author doesnt seem to be any better.
as for:
“Fostering stability of the financial system and containing systemic risk that may arise in the financial markets.”
maybe it stems risk for a few but many others (massive 401k losses??) still fall flat.
“Supervising and regulating the banking system to promote the safety and soundness of the nation’s banking system and financial system.”
well if it is the nations banking system and not free enterprise then i guess it does its job. it hasnt kept casino hotels open in reno.
“Conducting the nation’s monetary policy in pursuit of the statutory objective of maximum employment.”
if 90 percent employment takes place i dont guess that is so bad – unless it robs some to employ some.
i am still not sure if gold/silver banking that tends toward 100% reserves without a central bank is more beneficial or not. i havent seen anyway to compare it.
but if the govt will lie about babies and incubators i expect the current prosperity takes place ‘in spite of’ undefinable dollars and a central bank.
i looked over that book. it didnt seem to have much supporting data and was disappointing.
what did the state banks do on their own and what specifically did they do in league with the federal govt to create situations similar to what the 2nd bank was doing?
was the federal govt keeping out of the state banks a good thing? or did they?
Anyone else find it ironic that Jackson is on the $20?
Confront this past presidential dysfunction to a committment of unearned honors– Andrew Jackson appeared on the twenty dollar in1929, replacing President Garfield on the twenty dollar notes issued in 1882, George Washington in 1905 and Grover Cleveland in 1914.
Commenters are overlooking the enormous real estate bubble in the 1830s created by the Bank of the United States and numerous western banks. This bubble collapsed in 1836, partially as a result of the dechartering of the Bank of the United States; in any event, ushering in a major depression, which no doubt would have been even worse if the bubble had lasted longer.
“Orthodox historians have long maintained that by his reckless act of destroying the Bank of the United States and shifting government funds to the numerous pet banks, Andrew Jackson freed the state banks from the restraints imposed on them by a central bank.”
“Both sets of institutions had inflated almost precisely proportionately on top of specie.”
“starting at the beginning of 1833, the total
specie in the country rose swiftly from $31 million to $73 million at the beginning of 1837….”
http://mises.org/Books/historyofmoney.pdf
“In an effort to control the banks he issued the Specie Circular. That slammed the breaks on the inflation and the economy hit a wall. In only a few years Jackson moved the national economy from stability to hyper-inflation, then to a sudden and violent deflation.
The result of Jacksons horrible monetary policy was that he brough on the worst economic contraction our country had see up to that time.”
do the above excerpts say somethign other than this?
if jackson did remove the 2nd bank of us were there federal rules still governing reserve ratios? are you saying the federal govt should have regulated the state banks?
“The enormous increase in specie was the result of two factors: first and foremost, a large influx of silver coin from Mexico, and second, the sharp cut in the usual export of silver to the Orient.”
wouldnt that mean a sharp cut in silver overall..if the stuff alegedly wasnt going to the orient?
were prices during this period breaking the backs of people??
[quote=39n118w]“Most modern-day politicians will argue that there is no need to discuss monetary policy because the Fed has performed well. However, Austrian economists can point to many flaws in US monetary policy since the Fed’s creation, not least the fact that the dollar has lost 97 percent of its purchasing power since 1913.”
im not sure why the author and others keep bringing this “has lost so and so since 1913″ up.
to me its blatant one-sidedness intending to deceive and the authors should be shamed and exposed.
noone makes a 1913 salary either and many prices have fallen adjusted for inflation.”[/quote]
you are either ignoring or are unaware of the damage that persistent inflation does to the economy. between 1880 and 1914, the classic “gold-standard” years, inflation averaged 0.1%. from 1946 to 1990 it averaged 4.6%. persistent inflation punishes the saver and rewards the borrower. it destroys hard earned wealth. it forces amateurs to play the stock market where they usually end up getting fleeced by the wolves. it gives those at the top access to high powered money that has lost value by the time it circulates down to the average person. its a cancer on the economy and the notion that there is any good in it is complete fraud.
39n119w,
Apparently you did not read closely enough. From Chapter 1 bottom of page 1:
The monetary system of the country was not highly developed. The banks, outside of New England at least, were confined almost exclusively to the cities. Their methods tended to be lax; government control was negligible; and the fact that most banks, like other corporations of the period, had to gain their status by special legislative charter, invited speculative abuses through pressure on the legislature. The result was a lack of uniformity in dealing with banks within and between states. Until 1811, the existence of the First Bank of the United States had influenced the banks toward uniformity.
For more details you need to read the book but this paragraph tells you that banks outside of New England were lax, that means they did not adhere to the gold standard strictly. These were Jackson’s “pet” banks. This paragraph also tells you that the banks were chartered by legislatures inviting speculative abuse. Then it also tells you that until 1811 the First National Bank influenced the banks toward uniformity, that is toward the gold standard.
With this much information in one paragraph you would be richly rewarded to read the whole thing.
Great minds think alike.
http://usa-wethepeople.com/2010/01/random-thoughts-on-palin-beck-and-obama/
http://usa-wethepeople.com/2009/12/sarah-palin-will-be-the-second-abraham-lincoln/
@39N119W
As to inflation, this causes ordinary citizens who wish to save for the future or “retirement” or perhaps just to have that responsible 6 month cushion in case of emergency into the banks or into mutual funds or annuities or into the hands of investment broker middlemen if they wish to save and not see their purchasing power diminish. It encourages higher risk for the people who can afford it least, and it means that everyone is vulnerable to having their savings wiped out – not just “speculators”.
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