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Contextual Essay Back to History Unit

United States Expansion, 1800-1860.
Leah S. Glaser

The Jacksonian Era reflected the emerging political and socioeconomic differences within the country during the early nineteenth century with calls for sweeping democratic reform. President Andrew Jackson became a symbol for the changes of the era that stressed a stronger voice for "common" men in both religion and politics. These same years witnessed the spread of slavery across the continent and the rise of political and economic power for large plantation owners.

Economic Change and Industrialization

For all the complexities of the era, historians tend to agree that dramatic economic and technological changes were key features of Jacksonian America. During the early national period the U.S. economy, particularly in the North, was marked by a degree of industrial development, while expansion South and West offered promises of a more agrarian nation. Beginning in the 1820s, however, the nation's economy expanded its industrial and manufacturing base. Canals, steamboats, and railroads linked planters and farmers to new markets and raw materials in the western territories, allowing for the rapid transport of people, goods, and information. With the wealth of natural resources in the south, the "Transportation Revolution" (also referred to as the "Market Revolution") encouraged the further growth of manufacturing in the Northeast. These changes, promoted by market capitalists, provided a critical economic link between the slave and plantation system of the south and the developing industry in the north. They also encouraged new ways of funding transportation improvements and the financing of new business ventures through credit and new forms of banking.

The industrialization of the North also developed a system of "free labor" that stood in sharp ideological contrast to the slave system of the South. For example, the textile mills of Lowell, Massachusetts used the raw materials provided by the South and provided new jobs, especially for poor young women and eventually for immigrants. Together with the advancements of the market revolution, industrialization encouraged entrepreneurialism and gave rise to the notion that opportunities for socioeconomic advancement awaited anyone willing to work hard. To many, Andrew Jackson's own life seemed indicative of this promise.

Politics in the Jacksonian Era

Optimistic politicians hoped that the advances in transportation would unite the country not only physically, but ideologically as well, diminishing the emerging sectional differences. However, the technological changes of the Jacksonian Era extended to advancements in print and communication, which fueled popular ideas and encouraged the development of party politics-a more clearly defined form of the two-party political system that persists today. While these parties eventually divided along sectional lines, they originally developed from competing philosophies about the government's role in economic expansion. Since the constitutional era, the Federalists had delivered the dominant view of government. Perhaps fueled by a concurrent popular religious movement known as the Second Great Awakening, the electorate increasingly insisted on equal participation and democratization of the political process, regardless of property ownership criteria for voting and office-holding. Amendments to state constitutions expanded suffrage throughout the first two decades of the nineteenth century, although privileges applied only to white males and, outside some western states, further restricted political participation for women and free blacks. By the 1820s, a new party, the Democratic Republicans, appealed to those in economic decline. The party called for a smaller government and the vision of the common man as superior to that of the "enlightened aristocracy." It also stressed ideals of equal opportunity and concepts of popular sovereignty (majority rule), where the general population could determine its own future. Democrats believed in the spread of economic democracy and laissez-faire capitalism through rapid settlement (a stance that contributed to Jackson's federal Indian policy of removal). Jackson himself embodied the democratic hero: a rugged individual and grassroots-style politician who became a clear alternative to the "privileged Gentlemen" who had presided over the White House since the end of the Revolution.

The Whig Party emerged in opposition to the Jacksonian Democrats. Like the Federalists, the Whigs promoted a strong, activist government bent on protecting republican liberties and creating economic opportunity through responsible banking policies, protective tariffs on American manufacturers, and the support of corporations. Whigs favored legislative control over such policies since they believed that the inflated powers of the presidency under Jackson were the real threats to individual liberties.

Federal Banking in the Jacksonian Era

The "Bank Wars" illustrated the type of demagoguery the Whigs hoped to defeat. One of the strongest examples of Jackson's leadership and policies, these struggles grew out of the economic and transportation realities of the day. Between 1814 and 1840, hundreds of state-sponsored banks sprung up across the country and offered to loan money and increase the flow and supply of money by issuing banknotes in lieu of cash. New state laws also addressed the incorporation of new businesses across the states. In 1816, Congress established the Second Bank of the United States (after the charter of the first Bank expired in 1811) as a centralized institution for the nation's banking. It would provide stable paper currency (the first truly national currency) and rein in the activity of the state banks. The "BUS" was a private enterprise but it enjoyed exclusive special privileges with the government. The government would, for example, accept the bank's notes for taxes and land sales, as well as deposit state banknotes from land sales. The government also appointed five of the bank's twenty-five directors. However, the BUS itself continued to extend credit, particularly for public land sales at inflated prices. Most significantly, these powers centralized BUS control over the banking system and overall national economy. The rapid economic expansion was fairly volatile, and when dozens of banks failed during the Panic of 1819, the BUS appeared responsible. Many blamed the collapse on Bank of the United States, which instructed state banks to back their loans with specie (hard currency such as gold and silver coins). With no or little hard currency in circulation, businesses declared bankruptcy; thousands lost their savings and their jobs. The panic demonstrated the dangers of borrowing on credit-the method through which most settlers had purchased public lands in the West and how most of the fledgling businesses of the era had financed themselves.

Responding to the scapegoating of the Bank, President James Monroe appointed Nicholas Biddle as the BUS's new president in 1823. Biddle increased the amount of hard currency the Bank kept to back up the value of paper money and extended the bank's powers to require state banks to periodically redeem notes with gold and silver. In this way, the federal bank both established controls over the amount of money in circulation and regulated state banks by acting as their creditor and, in theory, promoting economic stability.

The BUS's new regulatory role proved controversial. It became a major political issue in Jackson's re-election bid against Whig Henry Clay in 1832 and helped define Jackson and his party as opponents of special privilege. Although Biddle and his bank had been successful in supporting economic expansion, Andrew Jackson accused the BUS of undermining individual liberties and states' rights. The attacks, known as the "Bank Wars," resonated with farmers and workers, particularly in the west, who had difficulty understanding the theories behind paper money and credit and wanted to be paid in the "real" hard currency of gold or silver coins. These voters helped Jackson win a second term in office. Soon afterwards, Jackson vetoed the bill to re-charter the BUS, withdrew funds belonging to the national government-which owned 20 percent of BUS stock-and precipitated the institution's collapse. Jackson's actions led many to accuse him of acting independently of Congress: the political fallout eventually led the Senate to censure Jackson. Even in spite of the BUS's attempt to reduce loans, Jackson still refused to re-issue the bank's charter, spelling the end of federal banking in the United States until the Civil War. The government then, in a very controversial move, deposited federal monies into a few "pet banks" that supported Jackson politically. An inflationary boom followed, but economists disagree as to the cause of the boom.

The closing of the Second Bank of the United States in 1836 encouraged significant banking reforms on the state level. States such as Michigan and New York introduced the concept of free banking whereby any local bank could receive a state charter, rather than a special legislative charter, as long as it met certain conditions. Such an institution could operate under far fewer restrictions and without federal oversight. Historians have disagreed as to whether or not Jackson's policies led to another "panic" in 1837 and a subsequent depression in the early 1840s. Many have suggested that the land speculation of the previous decades had created a bubble that inevitably burst, albeit on Jackson's watch.

Jackson's successor, Martin Van Buren, bore the burden of the financial crisis as the new Whig Party blamed the country's economic distress on the "Bank Wars" and Jackson's other "irresponsible" and "reckless" policies. To permanently distance the Democratic Party from the banking fiasco, President Van Buren supported the Independent Treasury System, which would avoid all banks and use only gold and silver coins in business deals. Congress passed the measure in 1840, and although it indeed buried the banking issue for the Democrats, the measure ultimately reduced the money supply and brought prices to depressive lows.

The economic changes and expansion during the Jacksonian Era thus dominated the politics of the early nineteenth century. However, sectional disagreements would submerge all of these fiscal arguments over class differences and emerge as the prevailing political agenda by the middle of the century.

Works Cited and Further Reading

Engerman, Stanley L. "A Note on the Economic Consequences of the Second Bank of the United States," Journal of Political Economy, Vol. 78, 1970, 725-28.

Goldfield, David et. al. The American Journey: A History of the United States. Second Edition. Upper Saddle River, NJ: Prentice Hall, 2001.

Johnson, Paul E. A Shopkeeper's Millennium: Society and Revival in Rochester, New York 1815-1837. New York: Hill and Wang, 1978.

Rousseau, Peter. "Jacksonian Monetary Policy, Specie Flows, and the Panic of 1837," Journal of Economic History, 2002.

Temin, Peter. The Jacksonian Economy. New York: W.W. Norton & Company, 1969. Review Essay by Richard Sylla, Department of Economics, Stern School of Business, New York University. Found at

Wallis, John Joseph. "What Caused the Crisis of 1839?" NBER Working Paper Series, Historical Paper 133, April 2001.

Wilentz, Sean. "Society, Politics, and the Market Revolution." in The New American History, edited by Eric Foner, Philadelphia: Temple University, 1990.

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