Britain had become the premier industrial and financial power of the world. Two actions in the summer of 1836 changed the economic dynamics - one an act of Congress not really supported by the Administration and the other an act by the Administration not supported by Congress. Meanwhile, too, the country went staggering and bewildered through its season of bitter ruin. The Panic of 1837 merged with that of 1839 into a prolonged period of hard times that, in severity and duration, was exceed only by the great depression that began ninety years later, in 1929." But Jackson was apparently prevailed upon to sign it by the argument that a veto, at a time of credit and currency contraction, might defeat Van Buren's bid for election." 50 The achievements of the Second Bank of the United States were irrelevant to Jackson. Brands noted: "Vetoes were rare in the days before Jackson; his six predecessors had turned back but ten bills total. BANK WAR. 20 Jackson represented a new wave of populist politics. Because few records from the Kirtland Safety Society have survived, it is difficult to tell how the Panic of 1837 affected the society. Reform was thus the dominant theme of a second phase of operations under bank president Langdon Cheves (1819-23)." Fortunately, many states simply deposited their money in the same bank that had been keeping it on behalf of the federal government. It is the usurpation which has convinced the Country." Specie and the Specie Circular
Jackson himself, in one of his grotesque interviews, had thrown out the hint in February. Economic historian Charles Sellers wrote: "When a Democratic Congress again proved deaf to criticism of Biddle's Bank, Old Hickory and his anti-bank coterie launched a class appeal over the heads of the politicians. President Van Buren met with representation of New York's financial and commercial leaders on May 3. Historian Walter A. McDougall wrote that "not only did Clay lack the votes to override Jackson's veto; he misjudged the electorate. Clay probably sensed the reaction in March when Van Buren offered to bet him a suit of clothes on the elections in Virginia and New York City. Holt wrote that "some National Republicans recognized in the fall of 1831 that Clay's long service in the House and Senate, his close identification with the American System, and his purported participation in the Corrupt Bargain made him precisely the wrong candidate to win converts to the National Republican cause." On May 10, 1837, some important state banks in New York, running out of hard currency reserves, suddenly refused to convert paper money into gold or silver. On May 15, the President issued a call for a special session of Congress in September. States bank, nay all banks. But to Jackson, the national bank was a morally suspect institution, a symbol of secret manipulation." Many of these notes were of dubious quality. Voters applauded the president's defense of public equality, even if they did not follow the subtle economic arguments in favor of central banking." Taney demonstrated that Biddle had bought favorable press coverage for the bank during the fight for renewal of the charter; this practice, of employing the people's money to manipulate the democratic process, was `pregnant with so much evil,' Taney told Jackson, that it alone was cause for the severest censure. Pessimism abounded during the time. The British depression led to restrictive lending policies by Great Britain that curtailed the flow of money and credit to the United States. In his annual message of December 1831 he had barely mentioned the subject. Jackson also worried about homesteaders' being seduced into debt. In their arguments against the bullionist party, they talked as if they believed that, if the public Treasury did its own business, and did it in gold, it would get possession of all the gold in the country, and that this would give it control of all the credit in the country, because the paper issue was based on gold." "But the measure itself was unconscionably clumsy and taken too late to do anything but hurt." But he thought that the institutions and the people who benefited from it were a national curse as well. In the mean time, the public press will be put in motion, every prejudice excited and appeals made to every passion.