Martin Van Buren came to office without the enthusiastic support of any large segment of public opinion. The machine forces of the time and the hearty recommendation of Andrew Jackson had been responsible for his elevation. His position was very much like that of John Quincy Adams in 1825. If the East had preferred him to his predecessor, it was not because the East proposed to surrender any of her interests; and if the West liked him less than she had liked her hero, it was just because his feelings and interests were suspected.
He had supported Jackson in the breaking-down of a stable civil service in 1829, in order to ruin their common opponents, Adams and Clay. Now Van Buren was to inherit the evils of the spoils system, and Adams, Clay, and Webster were leading the attack upon him both in Congress and in the country. Jackson's collector of the customs in New York defaulted in the sum of $1,250,000 during the first year of Van Buren's term; and to make matters worse the new appointee behaved quite as scandalously the next year. Out of sixty-seven land officers in the West and South, sixty-four were reported in 1837 as defaulters, and the United States Treasury lost nearly a million dollars on their account. The Jacksonian Democracy was certainly putting its worst foot foremost, and the great leaders of the opposition held up their hands in horror at a system which "reeked with corruption from center to circumference."
Van Buren had begun badly. But worse was to follow. The receipts from federal land sales dropped from $24,000,000 in 1836 to $6,000,000 in 1837, and the total income of the Government declined from $50,000,000 to $24,000,000 in the same year; and the expenditures of the Treasury outran the receipts during 1837 and 1838 by more than $21,000,000. A deficit of $300,000,000 for two successive years in our time would not be worse than the deficit of the unpopular successor of Andrew Jackson. From 1833 to 1836 there had been an annual surplus equal sometimes to the total expense of the Government. The national debt had been paid in full and money had been loaned to the States without interest or security. There was to be no more national debt and no more paying of interest to hard-driving capitalists; but Van Buren borrowed $34,000,000 in two years to meet the ordinary expenses of his Administration.
The honors of the time were, and have since been, bestowed upon Jackson, and all the blame of things was, and has since been, laid upon the shoulders of Van Buren. But the fault was not Van Buren's. A number of causes had produced this surprising and distressing state of affairs. After the great success of the Erie and other canals in the East, Western States entered upon an era of canal building which the richest of communities could ill have borne. Railroads were beginning to create markets for Eastern farmers. The Westerners, therefore, sunk millions of their hard earnings in railways which paralleled their canals or projected into wildernesses. Between 1830 and 1840 these ventures of the West, from Michigan to Louisiana, absorbed hundreds of millions of capital. Illinois borrowed $14,000,000 when her total annual income was hardly more than $250,000; Mississippi borrowed $12,000,000 on a yearly income a little less than that of Illinois. The States had mortgaged their futures for decades to come. This was especially true of Western communities; but Eastern States like Pennsylvania, Virginia, and South Carolina were also in debt for similar amounts. Everybody thought the resources of the United States were inexhaustible; and everybody seemed willing to tax future generations beyond all precedent in order to develop these resources.
The depositing of the federal funds in state banks by Jackson had greatly stimulated speculation. Public interest in banks, already great, increased enormously. Forty new banks were created in Pennsylvania in a single year. State banks increased their capital and extended their operations. In two years the bank notes in circulation increased from $95,000,000 to $140,000,000; loans and discounts rose from $324,000,000 to $457,000,000. The National Bank, which had curtailed business in order to embarrass the country and particularly President Jackson, quickly changed its tactics, and, sailing under a charter from the State of Pennsylvania, kept pace with its five hundred rivals. To be sure the Federal Constitution forbade the States to issue bills of credit. But the States incorporated banking companies which issued the forbidden notes by the million, and the Supreme Court of the United States, now that Marshall was dead and the personnel of its membership had undergone a change, declared the practice lawful.
States indorsed or participated in the proceedings of the banks, the banks loaned to other corporations or to private individuals on such security as land, slaves, improvements already made, or the personal credit of men otherwise deeply in debt. The flood of money was thus, before 1837, invested in lands and houses or railroads and canals which could neither pay dividends nor return the principal for several years. It seemed that when the Federal Government paid the last of its debt, the States eagerly pursued the opposite principle and created the greatest debts possible.
Though the people of the United States joined in all these wild ventures, they were not solely responsible. Europe, especially England, had been anxious to lend. The Erie Canal had been built upon borrowed capital, and it had paid good dividends. The old National Bank, now going out of business, had placed $25,000,000 of its stock in Europe, and the holders had received most liberal returns. American investments were quoted as "excellent" by the Baring Brothers of London to their thousands of customers. And why not? The Federal Government had recently paid the last dollar of its two huge debts, more than $80,000,000 for the cost of the Revolution and $110,000,000 for the cost of the War of 1812, and the rate of interest had often been as high as eight per cent. Was there a similar example in all history? The bad reputation of 1783-1800 for debt-paying had been lived down.
Van Buren estimated the amount of money due by States and corporations to English creditors at $200,000,000. His estimate was probably not greatly exaggerated. Certainly as much as $12,000,000 in interest was due each year to English creditors. The merchants of the great towns regularly bought their goods on long time, sold them on time to the shopkeepers of the villages and hamlets, and these in turn sold on credit to their customers. Not less than $100,000,000 was thus distributed over the country. It was due any day in London or Liverpool. The world seemed to "take stock" in the new Republic, particularly when the returns were large and prompt in appearing. And now that the Federal Government was not a borrower, the States became the heirs of the confidence of the capitalists who, not comprehending the difference between the National and the State Governments in the United States, expected that the authorities in Washington would bring due pressure to bear on local authorities that might turn indifferent when crops were bad.
All these things led to an inflated state of things. Jackson had seen the dangerous tendency, and his specie circular had been applied in 1836 in the hope of mending matters. But the people who bought lands had no gold or silver. The effect of the circular was to compel Western bankers to call on their Eastern correspondents for metallic money. All the specie in the Eastern vaults amounted to only $19,000,000, a sum not in excess of what it had been twenty years before, when the paper money in circulation was not half so great. Just as the West asked for more hard money English bankers and other business men called sharply for payment of outstanding debts due by leading business men in the East. Both demands could not be met at the same time. The bubble had been pricked.
To make matters worse, the wheat crop of the Middle States and of the South failed utterly, and the farmers were compelled to import grain on credit for the next year's seeding. The cotton output was large, but the price fell from twenty to ten cents a pound. Corn and meat were plentiful in the West; the means of transportation were, however, lacking. There was famine and plenty in the land at the same time. Business came to a standstill, all forward movements stopped, and the banks closed their doors.
From a winter of greatest plenty and most amazing expectations the people, particularly the poor of the cities and mill towns, passed into a summer and autumn of positive want and starvation. With flour at twelve dollars a barrel, the New York price, and with wages declining every day or industrial operations suspended altogether, the lot of the worker was hard. Riots were of weekly occurrence, and the greatest business houses of New York, Philadelphia, and even New Orleans, where cotton was expected to save men, declared themselves bankrupt and closed their doors. Men who had clamored against Jackson or Biddle in the time of distress three years before now looked upon that crisis as only a flurry. Everything seemed out of joint and the future gave no assurance of speedy recovery. The East, which had condemned the West for their stay laws against the panic of 1819, now clamored for a federal stay law and urged Van Buren to suspend the specie circular. The President refused to offer any relief, and other failures and other risks followed. Before the summer had well begun every bank in the country suspended specie payment, and a little later local business men's associations issued notes or due bills in small denominations which were accepted as money. East, South, and West the commercial and financial panic held the country fast in its grip. Speculations fell flat, obligations were void, and men turned to the simpler forms of life to regain their equilibrium. Barter took the place of former methods of exchange.
People blamed the banks; some cried out that the monopolistic methods of business had been the cause. The Whigs maintained that the panic and distress were due to the blunders and crimes of the party in power. Benton in reply declared that the paper money and stock-jobbing systems of the last few years had been the cause. Van Buren called Congress together in extra session in September, 1837, in order, as he said, to devise means of saving the Government itself from bankruptcy. But he could not place the blame on the preceding Administration, as his opponents delighted to do; he only said it was all because of "over-action in all departments of business." Congress suspended the distribution of the surplus revenue among the States, issued notes to the amount of ten million dollars to meet the obligations of the Government, and took measures for the safety of the public funds in banks which could not pay their debts. Gradually during the next year the signs of recovery appeared. Rise of prices in Europe, a good cotton crop, and the passing of the panicky state of mind enabled the banks to resume specie payments, and the mills of the East to open their doors. But the public was in doubt whether the ruin of the National Bank, the issuing of the specie circular by Jackson, or the lack of ability on the part of Van Buren had been the cause of the calamities of the year 1837. And as it took years for men and business houses to regain their former mutual confidence, there was soreness and hesitation everywhere until after 1840.
The financial situation was, therefore, the one thing with which Van Buren had to deal during most of his term. After the emergency measures had passed, he gave earnest attention to the enacting of a law which would create responsible agencies in the larger cities for the receipt and expenditure of the public moneys. The purpose was to avoid concentration and monopoly such as the National Bank had maintained, and to keep the control of the finances in the hands of the Government. It was called the Independent Treasury system. The President pressed the measure before a divided Congress and without the support of any concerted or strong public opinion. To the surprise of many, Calhoun, the bitterest of his enemies, came to his assistance. This meant the support of most of the cotton and tobacco planters. Yet the measure failed of passage during the sessions of 1837-38 and 1838-39.
Van Buren did not know how to appeal to the popular heart when powerful congressional leaders and shrewd business men pressed too hard. He simply adhered to his Independent Treasury Bill against all opposition, fair and unfair. A group of conservative Democrats broke away from his leadership in 1838 and deprived him of a majority; in the next Congress he was no stronger, and the one measure of reform which he urged failed to pass before June, 1840. Another legacy of Jackson, his "illustrious predecessor," was a war with the Seminole Indians, who resisted removal to the western frontier; and before 1842 the suppression of these desperate natives and their slave allies, runaways from the Georgia plantations, cost the Government $40,000,000, most of which had to be borrowed at high rates of interest.
Even more threatening than the Seminole troubles was the Texas problem. The last act of Jackson's official life was to recognize the independence of that aspiring State. But this was only preliminary to the real purposes of Texas and her agents, who pressed Van Buren in the summer of 1837 for annexation to the United States; though these same agents wrote home that if annexation did not succeed, the South would break away from the Union, and that if it did succeed, the North would withdraw from the federal compact. So that while Calhoun and his friends aided the President in his financial measures, they at the same time importuned him to help the South by adding another pro-slavery State to the Union. This was not the first time this question had embarrassed a president. As already seen, Clay had denounced Monroe for giving away that princely domain; Benton and Van Buren had warred upon Adams and Clay in 1826-28 for not compelling a restoration, and under this pressure and that of the South in general, Adams had sought in vain to purchase Texas; under Jackson the problem was several times taken up, and as much as $5,000,000 was offered. Still the astute General had steered clear of trouble when annexation "with war" was offered in 1836.
Van Buren likewise delayed and risked his Southern popularity. Meanwhile a revolt against the British Government broke out in Canada, and thousands of Americans along the border, from Maine to Wisconsin, lent open assistance to their "oppressed" neighbors. Van Buren remained strictly neutral. With much difficulty was the peace maintained, and at the expense of many savage attacks upon the Administration for its un-American policy and lack of sympathy with men who fought for "freedom."
While the President was seeking to reform the national currency and restrain the imperialistic tendencies of his countrymen, one great State, New York, under the leadership of Silas Wright, was showing the country what could be done locally to make banking safe. In 1829 a law was enacted compelling every newly chartered bank to contribute a certain percentage of its income to a common safety fund. The disasters of 1837 showed these reserves to be too small, and in 1839 every bank in the State was required to deposit with the Treasury securities enough to protect all notes to be put into circulation. At the same time any group of capitalists who would conform to the law might open a bank without let or hindrance, which had the effect of putting financial operations on simple business principles, removing the political motive which had wrought so much damage to innocent depositors. During the next decade the New York example had great influence, and Massachusetts, Maryland, South Carolina, and other older States instituted safe and conservative banking systems.
But while these communities learned slowly the lesson of careful finance, Michigan, Mississippi, and other States, East and West, hard pressed by their circumstances and the overwhelming debts which they piled up till about 1840, repudiated or failed to meet their obligations. And when suits were brought by domestic or foreign creditors, state legislatures simply declined to pay and claimed immunity from federal pressure under the Eleventh Amendment to the National Constitution. Nor were the resources of the Western communities equal to the discharge of their onerous burdens. To have attempted to force upon the people the payment of the debts their leaders had fixed upon them would have caused wholesale migrations to Wisconsin, Iowa, and Texas. The people of the West, of the country as a whole, perhaps, were still in the position of frontiersmen as compared to Europeans. They needed all the time more capital than they could repay in many years, and they were not as yet disciplined to the point of bearing heavy burdens.
With so much distress in the country and with the Administration overburdened with problems, Clay, Adams, and Webster organized the opposition in Congress and throughout the country very much as Van Buren, Calhoun, and Jackson had done in 1826-28. The President, they said, was no friend of the people; he had not so much as mentioned their case in his messages to Congress. He was likened to a sea captain who seizes the lifeboats on a distressed ship in midocean and, saving himself and crew, leaves the passengers to the mercies of the angry waves. Clay said the panic had been due entirely to the ungodly Jackson and his foolish successor; Webster saw the sole cause of the ills of the time in the foolhardy policy of the last half-dozen years. John Quincy Adams never tired of ridiculing the puerile maneuvers of backwoods politicians whose ignorance amounted almost to high crime. To him the Independent Treasury Bill was an attempt to separate the Government from business, as futile as to try to divorce the law from the judges in the administration of justice.
Business men were appealed to to help avert the further catastrophes which a Democratic Administration would surely inflict. Distressed planters were reminded of the low price of cotton, all the friends of the former National Bank were told to remember the war on the Bank which had ruined them and the country at the same time. Indignation meetings were held in the East to denounce Van Buren and the "Loco-focos," a term of reproach applied generally to the party in power; Henry Clay made a tour of the Eastern States thanking God that he had been spared to help in undoing the work of Jackson; Webster canvassed the West in the hope of restoring the minds of the people to their wonted sanity and a renewal of the alliance of West and East, on which alone depended the prospect of good government in the United States. The Whig party was now a powerful machine, and its leaders would take the people into their confidence. "The honesty of plain men" became a favorite expression of the time; and Adams, Clay, and Webster repeated the experiment of Jackson, Calhoun, and Benton in 1828, in a four-year campaign against Van Buren. A disinterested philosopher might have said that it was poetic justice for the persecuted Adams of 1828 to appear in the rôle of persecutor in 1840.
Though the President was an abler politician than Adams had been in the former struggle, he was hardly able to parry the blows of Clay and his Eastern allies, especially after the elections of 1838, when both houses of Congress were lost to the Administration. Calhoun, Benton, and Silas Wright made a strong fight on behalf of the Democrats. To the Independent Treasury measure they added the preëmption and graduation bills, which commanded almost unanimous support in the West, and at last secured the passage of all three in June, 1840. Though Clay and his party waged a powerful opposition through four full years, they had no definite program to offer. The groups of their organization were as yet poorly knit together. Their popular appeal was "to drive the Goths and Vandals" from the capital. The "new Napoleon and his minions," according to another historical comparison, must give way to the old régime, to gentlemen "who knew how to govern." And consequently the new alignments were much the same as those which had supported Adams and Clay in 1828, the South and West uniting on the "reform" Treasury system and Benton's land bills, while the East and certain conservative elements of the West and South indorsed, tentatively, at least, the "American System," or at least lent willing ears to the eloquence of Clay.
Still the people hardly knew whom to believe, and they grouped themselves in the different States in a way which seemed unlike the earlier combinations. Thick-and-thin followers of Van Buren called themselves Democrats and insisted that they were the disciples of Thomas Jefferson; the organizers of the opposition to Jackson in his war on the Bank had claimed to be National Republicans, though they accepted with pride the name of Whigs after 1836. They asserted also that they were the followers of the great Virginia democrat; perhaps the historian would be compelled to deny that either faction was democratic.
As the Democrats were almost unanimously in favor of the renomination of Van Buren, it was not difficult to manage their convention of that year. Nor was the platform the occasion of any serious disagreement. It stated for the first time that the party was opposed to internal improvements, a protective tariff, and the assumption of the debts of bankrupt States. In all these the West was much interested. But on the subject of slavery it was definitely declared that the Federal Government had no power of interference. For the last time in the history of the _ante-bellum_ Democracy, the Declaration of Independence was declared to be an item of the party faith. Van Buren took many risks in this un-Western program; though the panic of 1837 was doubtless his heaviest burden, as the Whigs never tired of asserting and repeating.
The Whigs met in convention at Harrisburg in December, 1839. Divided on the great questions of the day, they feared to nominate their one masterful leader, and in weak imitation of the Jackson men of 1828 turned to William Henry Harrison, a frontier general of no great ability or reputation. John Tyler, a Virginia politician of the Calhoun school, was made the candidate for the Vice-Presidency. On the matter of a program it was impossible for the Whig groups to agree, and consequently they offered no platform at all. But the West received notice from the leaders that in the event of success, the debts of their States would be laid upon the broad shoulders of the Union and that internal improvements would be resumed. In the East the restoration of the National Bank and the renewal of the high tariff schedules of 1832 were the assurances of men like Webster and Clay. With differences so great dividing the opposition it was impossible to make a campaign on the issues of the time, serious as these were acknowledged to be.
The contest which followed was unlike any other in the history of the Union. "Hard cider," "coon skins," and "log cabins" became the slogans of the campaign, because once in his life General Harrison had lived in a cabin and "drunk the beverage of the common people." Van Buren could not meet such cries. His canvass became a defense, and his followers half acknowledged their defeat when it was seen that the West rallied to Harrison. The plain citizen was carried off his feet, and he voted against the man in the White House who was said to use gold and silver on his table and dress himself before costly French mirrors. Nor was he certain in his more serious vein whether after all Jackson had not made a sad blunder in choosing the New York politician to carry out his policies. Without real argument or any serious presentation of the issues the Whigs, appealing to what were considered Western prejudices, built log cabins on the public squares, wore coonskin caps, and sang Van Buren out of office to the tune of "Typ and Ty," "Little Van is a used-up man," and other like vanities.
The result was an overwhelming victory for Harrison and Tyler, the President carrying only one New England State and Virginia, South Carolina, Alabama, Arkansas, Missouri, and Illinois, and receiving only sixty electoral votes out of a total of 294. The popular vote was 2,400,000, almost twice as great as in any previous election. The people were learning to vote if nothing more. Van Buren and his lieutenants, including Calhoun, were chagrined and humiliated. The West had returned the enemies of Jackson to power and, perhaps unintentionally, had written failure across the work of their "hero." Thus Clay had turned the backwoodsmen and their methods against the original backwoods statesman, and brought about a restoration of the old régime. Nicholas Biddle and all his financial friends rejoiced. Webster and New England looked once again to a new era of protection; and the internal improvements men of the West and the up-country, having been overwhelmed by the panic in their various State undertakings, turned their expectations once more toward the National Treasury. The manufacturing and the financial interests had in reality come into control again, and with the assistance of the plain people of the back-country. Clay had been the architect of the new structure, while Jackson and Calhoun mourned alike the defeat of Van Buren.
Bibliographical Note
Edwin M. Shepard's _Life of Martin Van Buren_, in _American Statesmen_ series is the best study of the Van Buren Administration. J. Schouler's _History of the United Slates_, vol. _IV_; G. S. Callender's _Selections from the Economic History of the United States_ (1909); G. S. Callender's _Early Transportation and Banking Enterprises_, in _Quarterly Journal of Economics_, vol. 17; W. A. Scott's _Repudiation of State Debts_ (1893), and the biographies and other works cited at the close of the last chapter will give the reader material for further study.
Robert Mayo's _Political Sketches of Eight Years in Washington_ (1839); Mrs. M. B. Smith's _First Forty Years of Washington Society_ (Hunt, 1906); and J. F. H. Claiborne's _The Life and Times of General Sam Dale_ (1860) present most interesting pictures of men and manners. For railroad, canal, and banking ventures, J. L. Ringwalt, _Development of Transportation Systems_; W. F. Gephart, _Transportation and Industrial Development in the Middle West_; J. P. Dunn, _Indiana_, Rufus King, _Ohio_, T. M. Cooley, _Michigan_, in _American Commonwealths_ series; Thomas Ford, _History of Illinois_ (1854); J. F. H. Claiborne, _History of Mississippi_ (1880); W. C. Brewer, _Alabama, Her History, Resources_, etc. (1872); and J. G. Baldwin, _The Flush Times in Alabama and Mississippi_ (1853).