Andrew Jackson On the Evils of Special Interests
It was the summer of 1832 and the debate in Congress was hot and heavy over the renewal of the charter of The Second Bank of the United States. The First Bank of the United States, created by Alexander Hamilton, was founded in 1791. One of the compromises in the original bill that authorized the bank limited the charter to 20 years. As the charter neared expiration, Congress would evaluate its performance and decide whether or not to renew it.
The First Bank of the United States had two primary functions. One, to handle the financial transactions of the U.S. Government. Two, ensure that the U.S. had a viable, stable currency and three, it was what we would call today a modern, full-service bank that has retail and commercial customers as well as an investment bank function. By the end of its charter, it had branches in Boston, New York, Charleston, Baltimore, Norfolk, Savannah, the District of Columbia and New Orleans.
Thomas Jefferson was not a fan of The Bank of the United States. Under his presidency, his two administrations used the bank but he did not campaign for renewing its charter. When it expired in 1811, Jefferson’s successor, James Madison was saddled with the task of convincing his fellow Democratic-Republicans on the value of having a central bank.
Madison’s Second Bank of the United States was modeled on its predecessor. Note both Jefferson and Madison called the creation of the First Bank of the United States unconstitutional. The Second Bank of the United States was duly chartered in 1816 under Madison, and it had essentially the same roles as its processor. Again, the charter length was 20 years.
In its early years, The Second Bank of the United States its officers made poor business decisions until President Monroe appointed Nicholas Biddle as its president. Under Biddle’s leadership, reforms were made, and the Second Bank of the United States fulfilled the expectations laid out in its charter.
Jackson was the incumbent and a member of the Democratic Party which was the old Democratic-Republican Party. He beat Henry Clay in a hotly contested election. Clay was a member of the National Republican Party which was founded in 1824 and faded from the U.S.’ political landscape in 1834.
When the bill renewing the charter landed on President Andrew Jackson desk, he vetoed it. The Second Bank of United States ceased operations in 1836 and the U.S. did not have a central bank until the National Bank Act of 1862.
While one can debate the wisdom of Jackson’s thinking and rationale, his message to Congress and the American people written on July 10th, 1832, is well worth reading. What follows are Jackson’s words in their entirety.
It is to be regretted that 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. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.
Now, 193 years later, Jackson’s words have incredible relevance to the election of 2024 and the issues the U.S. faces today.
1833 Edward Clay lithograph portraying Jackson destroying the Second Bank of the U.S.
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