States’ Rights & the Bank of the US

1. States’ Rights & the Bank of the US

2. The South & the Tariff • After War of 1812: • Protective tariff established • Benefitted businesses in north trying to compete with Europe • Hurt south – Europe retaliated by tariffs on US exports (cotton)

3. The South & the Tariff • Next 2 decades: • US raised tariffs over & over • The higher the tariffs, the more they helped north and hurt south

4. “Tariff of Abominations” • Very high tariff in 1828 • Nearly shut down foreign trade • South took it personally • Saw it as N getting rich off them

5. John Calhoun • VP under Jackson • Later Sen from SC • Had been very nationalistic • Favored Henry Clay’s American Plan

6. John Calhoun • SC voters were against the tariffs • Changed to believe in states’ rights • Developed theory of nullification

7. Nullification • States can choose not to follow laws if they believe they violate the constitution • Also states can secede if their constitutional rights are violated

8. Hayne-Webster debate • Sens Robert Hayne (SC) & Daniel Webster (MA) • Very charged debate – threats of secession • Calhoun (VP) on side of Hayne

9. Jackson’s response • “The union: it must be preserved.” • Split Jackson & Calhoun • Calhoun resigned as VP, then named a Senfrom SC (next day)

10. Tariff of 1832 • Milder tariff – SC still against it • SC said they can ignore it, threatened secession • Force Bill of 1833 – Jackson threatened to march federal troops into SC

11. Compromise • Henry Clay (KY) suggested: • Reduce tariff back to original 1816 level • SC agreed to it, ended conflict for the time being

12. Bank of the United States • Jackson hated BUS • Said it favored northern rich • BUS was on a 20 year charter • Jackson vetoed bill that would have rechartered bank • BUS would expire

13. Bank of the United States • BUS had all fed gov’s accounts • Hurt state banks – didn’t have a chance to get deposits • BUS investors received interest revenue from tax deposits

14. Jackson’s “Pet Banks” • Jackson had tax deposits put in hand-picked state banks • Banks loyal to Democrats • Ended up bankrupting BUS before its charter expired

15. Creation of Whig Party • JQ Adams & Clay’s supporters had formed Natl Republicans • Democrats upset over Jackson’s treatment of BUS joined them

16. Whig Party • Beliefs: • Tariffs for US business • Infrastructure spending • National currency & bank

17. Martin Van Buren • Won election of 1836 easily • Whigs couldn’t pick 1 person to run against him

18. Panic of 1837 • Result of Jackson’s bank policies • Relaxed rules over state banks • Allowed state banks to make risky investments • Investments went bad; banks went bankrupt • Many people lost everything

19. Panic of 1837 • Investments went bad; banks went bankrupt • Many people lost everything • Over 1/3 of US unemployed

20. Election of 1840 • Van Buren vs. WH Harrison • Harrison hero of Battle of Tippecanoe • Harrison’s running mate was John Tyler • Catchy slogan: “Tippecanoe & Tyler Too”

21. Election of 1840 • Van Buren got nickname too • He was from Kinderhook, NY • His people began calling him “Old Kinderhook” • Formed OK Clubs – originated American slang “OK”

22. Election of 1840 • Bad economy = Harrison won • Gave long inauguration speech in snow • Didn’t wear a coat

23. Election of 1840 • Got pneumonia • Died in 32 days • 1st president to die in office

24. John Tyler (TN) • Never supposed to have power • Had run for VP to get south for Whigs • “His Accidency”

25. John Tyler (TN) • Disagreed w/Whigs, got booted from party • One of weakest presidents ever