3.10 The Second Party System  

Unfortunately for Jackson’s Democrats (and most other Americans), their victory over the Bank of the United States worsened rather than solved the country’s economic problems.

Things looked good initially. Between 1834 and 1836, a combination of high cotton prices, freely available foreign and domestic credit, and an infusion of specie (“hard” currency in the form of gold and silver) from Europe spurred a sustained boom in the American economy. At the same time, sales of western land by the federal government promoted speculation and poorly regulated lending practices, creating a vast real estate bubble.

Meanwhile, the number of state-chartered banks grew from 329 in 1830 to 713 just six years later. As a result, the volume of paper banknotes per capita in circulation in the United States increased by 40 percent between 1834 and 1836. Low interest rates in Great Britain also encouraged British capitalists to make risky investments in America. British lending across the Atlantic surged, raising American foreign indebtedness from $110 million to $220 million over the same two years.¹

As the boom accelerated, banks became more careless about the amount of hard currency they kept on hand to redeem their banknotes. And although Jackson had hoped his bank veto would reduce bankers’ and speculators’ power over the economy, it actually made the problems worse.

Two further federal actions late in the Jackson administration also worsened the situation. In June 1836, Congress decided to increase the number of banks receiving federal deposits. This plan undermined the banks that were already receiving federal money, since they saw their funds distributed to other banks. Next, seeking to reduce speculation on credit, the Treasury Department issued an order called the Specie Circular in July 1836, requiring payment in hard currency for all federal land purchases. As a result, land buyers drained eastern banks of even more gold and silver.

By late fall in 1836, America’s economic bubbles began to burst. Federal land sales plummeted. The  New York Herald  reported that “lands in Illinois and Indiana that were cracked up to $10 an acre last year, are now to be got at $3, and even less.” The newspaper warned darkly, “The reaction has begun, and nothing can stop it.”²

Runs on banks began in New York on May 4, 1837, as panicked customers scrambled to exchange their banknotes for hard currency. By May 10, the New York banks, running out of gold and silver, stopped redeeming their notes. As news spread, banks around the nation did the same. By May 15, the largest crowd in Pennsylvania history had amassed outside Independence Hall in Philadelphia, denouncing banking as a “system of fraud and oppression.”³

The Panic of 1837 led to a general economic depression. Between 1839 and 1843, the total capital held by American banks dropped by 40 percent as prices fell and economic activity around the nation slowed to a crawl. The price of cotton in New Orleans, for instance, dropped 50 percent.⁴

Traveling through New Orleans in January 1842, a British diplomat reported that the country “presents a lamentable appearance of exhaustion and demoralization.”⁵  Over the previous decade, the American economy had soared to fantastic new heights and plunged to dramatic new depths.

Normal banking activity did not resume around the nation until late 1842. Meanwhile, two hundred banks closed, cash and credit became scarce, prices declined, and trade slowed. During this downturn, eight states and a territorial government defaulted on loans made by British banks to finance internal improvements.⁶

Rise of the Whigs

The disaster of the Panic of 1837 created an opportunity for the Whig Party, which had grown partly out of the political coalition of John Quincy Adams and Henry Clay and opposed Andrew Jackson and the Democratic Party. The National Republicans, a loose alliance concentrated in the Northeast, had become the core of a new anti-Jackson movement. But Jackson’s enemies were a varied group; they included pro-slavery southerners angry about Jackson’s behavior during the Nullification Crisis as well as antislavery Yankees.

After they failed to prevent Andrew Jackson’s reelection, this fragile coalition formally organized as a new party in 1834 “to rescue the Government and public liberty.”⁷ Henry Clay, who had run against Jackson for president and was now serving again as a senator from Kentucky, held private meetings to persuade anti-Jackson leaders from different backgrounds to unite. He also gave the new Whig Party its anti-monarchical name.

At first, the Whigs focused mainly on winning seats in Congress, opposing “King Andrew” from outside the presidency. They remained divided by regional and ideological differences. The Democratic presidential candidate, Vice President Martin Van Buren, easily won the election as Jackson’s successor in 1836. But the Whigs gained significant public support after the Panic of 1837, and they became increasingly well organized. In late 1839, they held their first national convention in Harrisburg, Pennsylvania.

To Henry Clay’s disappointment, the convention voted to nominate not him but General William Henry Harrison of Ohio as the Whig candidate for president in 1840. Harrison was known primarily for defeating Shawnee warriors led by Tecumseh before and during the War of 1812, most famously at the Battle of Tippecanoe in present-day Indiana. Whig leaders viewed him as a candidate with broad patriotic appeal. They portrayed him as the “log cabin and hard cider” candidate, a plain man of the country, unlike the easterner Martin Van Buren. To balance the ticket with a southerner, the Whigs nominated a slave-owning Virginia senator, John Tyler, for vice president. Tyler had been a Jackson supporter but had broken with him over states’ rights during the Nullification Crisis.

Although “Tippecanoe and Tyler Too” easily won the presidential election of 1840, this choice of ticket turned out to be disastrous for the Whigs. Harrison became ill (for unclear reasons, though tradition claims he contracted pneumonia after delivering a nearly two-hour inaugural address without an overcoat or hat) and died after just thirty-one days in office. Harrison thus holds the ironic honor of having the longest inaugural address and the shortest term in office of any American president.⁸ Vice President Tyler became president and soon adopted policies that looked far more like Andrew Jackson’s than like a Whig’s. After Tyler twice vetoed charters for another Bank of the United States, nearly his entire cabinet resigned, and the Whigs in Congress expelled “His Accidency” from the party.

The crisis of Tyler’s administration was just one sign of the Whig Party’s difficulty uniting around issues besides opposition to Democrats. The Whig Party succeeded in electing two more presidents but remained deeply divided. Its problems grew as the issue of slavery strained the Union in the 1850s. Unable to agree on a consistent national position on slavery, and unable to find another national issue to rally around, the Whigs broke apart by 1856.

Race and Jacksonian Democracy

More than anything else, however, it was racial inequality that exposed American democracy’s limits. Over several decades, state governments had lowered their property requirements so poorer men could vote. But as northern states ended slavery, whites worried that free black men could also go to the polls in large numbers. In response, they adopted new laws that made racial discrimination the basis of American democracy.

At the time of the Revolution, only two states explicitly limited black voting rights. By 1839, almost all states did. (The four exceptions were all in New England, where the Democratic Party was weakest.) For example, New York’s 1821 state constitution enfranchised nearly all white male taxpayers but only the richest black men. In 1838, a similar constitution in Pennsylvania prohibited black voting completely.

The new Pennsylvania constitution disenfranchised even one of the richest people in Philadelphia. James Forten, a free-born sailmaker who had served in the American Revolution, had become a wealthy merchant and landowner. He used his wealth and influence to promote the abolition of slavery, and after the 1838 constitution, he undertook a lawsuit to protect his right to vote. But he lost, and his voting rights were terminated. An English observer commented sarcastically that Forten wasn’t “white enough” to vote, but “he has always been considered quite white enough to be  taxed.”⁹

During the 1830s, furthermore, the social tensions that had promoted Andrew Jackson’s rise also worsened race relations. Almost four hundred thousand free blacks lived in America by the end of the decade.¹⁰  In the South and West, Native Americans stood in the way of white expansion. And the new Irish Catholic immigrants, along with native working-class whites, often despised nonwhites as competitors for scarce work, housing, and status.

Racial and ethnic resentment thus contributed to a wave of riots in American cities during the 1830s. In Philadelphia, thousands of white rioters torched an antislavery meeting house and attacked black churches and homes. Near St. Louis, abolitionist newspaper editor Elijah Lovejoy was murdered as he defended his printing press. Contemplating the violence, another journalist wondered, “Does it not appear that the character of our people has suffered a considerable change for the worse?”¹¹

Racial tensions also influenced popular culture. The white actor Thomas Dartmouth Rice appeared on stage in blackface, singing and dancing as a clownish slave named “Jim Crow.” Many other white entertainers copied him. Borrowing from the work of real black performers but pandering to white audiences’ prejudices, they turned cruel stereotypes into one of antebellum America’s favorite forms of entertainment.

Some whites in the 1830s, however, joined free black activists in protesting racial inequality. Usually, they lived in northern cities and came from the class of skilled laborers, or in other words, the lower middle class. Most of them were not rich, but they expected to rise in the world.

In Boston, for example, the Female Anti-Slavery Society included women whose husbands sold coal, mended clothes, and baked bread, as well as women from wealthy families. In the nearby village of Lynn, many abolitionists were shoemakers. They organized boycotts of consumer products like sugar that came from slave labor, and they sold their own handmade goods at antislavery fund-raising fairs. For many of them, the antislavery movement was a way to participate in “respectable” middle-class culture, a way for both men and women to have a say in American life.

Debates about slavery, therefore, reflected wider tensions in a changing society. The ultimate question was whether American democracy had room for people of different races as well as religions and classes. Some people said yes and struggled to make American society more welcoming. But the vast majority, whether Democrats or Whigs, said no.

Notes

1. Alasdair Roberts, America’s First Great Depression: Economic Crisis and Political Disorder after the Panic of 1837 (Ithaca, NY: Cornell University Press, 2012), 31, 36.
2. Quoted in ibid., 38.
3. “Great Public Meeting in Philadelphia,” Niles’ Weekly Register (May 27, 1837), 198.
4. Roberts, America’s First Great Depression, 23.
5. Quoted in ibid., 21.
6. Ibid., 53. Also see Jessica Lepler, The Many Panics of 1837: People, Politics, and the Creation of a Transatlantic Financial Crisis (New York: Cambridge University Press, 2013).
7. Henry Clay to Francis Brooke, December 16, 1833, quoted in Michael F. Holt, The Rise and Fall of the American Whig Party: Jacksonian Politics and the Onset of the Civil War (New York: Oxford University Press, 1999), 29.
8. Joseph Nathan Kane, Presidential Fact Book (New York: Random House, 1998), 61.
9. Frederick Marryat, Diary in America with Remarks on Its Institutions (London: Longman, 1839), Vol. 1, 297, quoted in Eric Ledell Smith, “The End of Black Voting Rights in Pennsylvania: African Americans and the Pennsylvania Constitutional Convention of 1837–1838,” Pennsylvania History 65, no. 3 (Summer 1998): 296.
10. Michael R. Haines, “Table Aa145-184: Population, by Sex and Race: 1790–1990,” Historical Statistics of the United States, millennial ed. online, eds. Susan B. Carter, Scott Sigmund Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (New York: Cambridge University Press, 2006), http://hsus.cambridge.org.
11. Niles’ Weekly Register (August 23, 1834), 426.