Jacksonian Democrats cherished the simplicity and naturalness of Jefferson's agrarian republic. They assumed power at the height of the Market Revolution. Commerce was welcomed as long as it served the independence and rough equality of white men. Unfortunately there were two problems facing Democrats: paper currency and dependence on credit.
The problems with paper economy:
- It separated wealth from "real work"
- It encouraged the spirit of luxury and greed
- It required government-granted privileges
The problems with the American System:
- It was anti-republican
- It was unacceptable
Jackson aimed to curtail government involvement in the economy, to end special privilege, and to rescue the republic from the Money Power.
Those who favored an activist government, the Whigs, opposed Jackson and his followers. The Whigs encouraged economic development and national prosperity. They wanted a national market economy that would soften sectional divisions. They argued that Jacksonian rhetoric was little more than the demagoguery of unqualified, self-seeking politicians (oh, snap).
The point of focus between the Jacksonians and the Whigs was the Second Bank of the United States. It was chartered by Congress in 1816. It received revenues from the national government. It could demand redemption in specie or gold and silver. It issued notes that were the beginnings of a national currency and exercised control over the nation's monetary and credit systems.
The bank promised a stable, uniform paper currency and competent, centralized control over banking. Americans distrusted and resented the bank because they blamed it for the Panic of 1819. Jackson agreed with them. He lost money in early speculation and he distrusted paper money. He believed the bank and money were unconstitutional and the only safe money was gold and silver. The bank was a government-sponsored concentration of power.
The Bank reapplied for its charter in 1832. Senator Henry Clay and Daniel Webster supported the Bank. The Bank President was Nicholas Biddle. Congress passed the recharter bill, and Jackson vetoed it. Most voters supported Jackson and he won the 1832 election by a landslide.
Jackson began his second term determined to kill the Bank. He withdrew from the bank government revenues, and put them into pro-Jackson banks, "pet banks." He had to fire two Secretary of Treasury to get this done (it was something the Treasury had to approve of), and he rewarded the Secretary of Treasury who agreed to this with the title of Chief Justice of the Supreme Court (after John Marshall had passed).
The Whigs were advocates of the American System. They critisized Jackson and mockingly referred to him as "King Andrew" because of his use of executive patronage, his excessive vetoes of congressional legislation, and his determination to reduce federal spending.
The Bank's best friend in the government was Daniel Webster, who was one of the three ealry Whig leaders: Daniel Webster, Henry Clay, and John C. Calhoun. (The House leader of the Democrats was James K. Polk)
Martin Van Buren was Jackson's chosen successor. He ran against three Whig candidates who were:
- Daniel Webster of the Northeast
- William Henry Harrison of the West
- Hugh Lawson White of the South
The Whig's strategy was to throw the election to the House (again). It didn't work. Van Buren was the candidate of a national Democrat Party. He wanted to avert the dangers of sectionalism. Van Buren took 15 of 26 states. He had 170 electoral votes, and 58% of the popular vote.
However, the Panic of 1833 started when Van Buren had barely taken office. This was because the Bank of England had cut off all credit, and the British demand for American cotton dropped. The result was business failures, wage declines, and the Worst depression in the U.S. history up to that time. The Whigs, of course, blamed Jackson's hard money policies.
In the election of 1840, the Whigs nominated William Henry Harrison, the hero of the Battle of Tippecanoe. He was a westerner and from the southern state of Virginia. He was a proven vote-getter and also a military hero (like Jackson). His running mate was John Tyler ("Tippecanoe and Tyler, too!"). His campaign was called the Log Cabin Campaign.
Harrison received 234 of the electoral college votes and Van Buren received 60 (ouch).
The second party system was the most fully national alignment in U.S. history. The election of 1840 completed the second party system. Harrison and Van Buren contested the election in every state.