I promised Pat I would do another ramble on Andrew Jackson. I think that the best book on Jackson was written by Arthur Schlesinger. “The Age of Jackson.” I recommend it to anyone as the most thorough analysis of Jackson, his personality, political trends of his time, the bank war, and Jackson’s Kitchen Cabinet, etc.
Jackson’s election is usually described as an expansion of democracy, but it is more accurate to say it was an expansion of opportunities for the small capitalist. The bulk of these felt that the door or avenues of advancement had been blocked or compromised.
America was still a nation of small towns and farms. Only one out of fifteen Americans lived in a city. Factories had sprung up but only in small numbers. The bulk of small capitalists believed that the door to economic fulfillment should be nudged open. The growth of the railroads opened up vast tracts to anyone who wanted to make money. The small capitalists were hardworking and ambitious and obtaining economic success was a bedrock belief of theirs. This class included workers, shopkeepers, craftsmen, and small business men.
James J. Grund, an immigrant who had come to America in 1836, wrote: "Business is the very soul of the American…business is the source of all human facility. It was as if all America was one gigantic workshop over the entrance of which was the blazing inscription, No admission Here, Except on Business.” This inclination was, in many cases, corrupt. Many American of the day were more interested in the speculative value of the land rather than their agricultural yield. Many of their ventures were financed by wild cat banks that used their money recklessly and stiffed their debtors.
In the East, there were sound, safe state banks that bitterly resented the U.S. National Bank of Nicolas Biddle who wielded his power in Philadelphia.
President Franklin Roosevelt had called GOP capitalists of his day, “economic royalists,” and he wanted to restore opportunities that had been snuffed out by their corrupt preponderance. This meant creating a government that would be an equivalent in force and power them.
To Jackson’s age, it was felt that business opportunities had been stifled by the National Bank which blocked the way to success for many humbler Americans. They turned to the states to obtain charters for newer banks better able to meet their needs, but the banking charters issued by state legislature ended up little monopolies themselves. Individual parties whose capital was deemed too small were denied entrance to strategic avenues of advancement offered by banks, ferries, turnpikes, bridges and railroads.
The Bank of the United States was the largest of thee privileged monopolies. One of the major forces propelling Jackson was the belief that the bank had denied many genuine opportunity and the ability to compete. As a man, Jackson loathed unfair privilege. To his mind, one of the worst defects of Biddle’s bank was that it was immune from government control. He intensely disliked the fact that a quarter of the bank’s shares were held by foreigners.
Jackson harbored a real feeling for the underdog. He had an obsession with fairness, in my view. In one of his speeches, he denounced any political structure that acted to make the powerful more powerful; he was aware, he said, that the gifts of nature, talent, wealth, etc were unevenly distributed. He didn’t want to try to abolish such uneven gifts of nature. What he wanted above all, was equality before the law because that would enable the humbler members of society a fair chance at success in life.
The turning point in the war against Biddle’s bank came when Jackson withdrew all of its deposits and gave them to supposedly sound state banks which promptly used their new resources to start a credit boom which collapsed in 1837, ruining their clients. Jackson had always been leery of wildcat banks. By destroying Biddle’s bank, the wildcatters were now free to act as they pleased, which was not Jackson’s intent. He hadn’t dethroned Biddle only to release the restraints on the wildcatters, but the truth dawned on him that he hadn’t established any federal control of credit.
By opening the gates to anybody who could meet state requirements for banking, little by little, the corporate idea of business was separated from its unhappy connection to corrupt monopolies. That was Jackson’s great contribution to American capitalism, but it was a triumph that didn’t last.
As I wrote earlier, it is unmistakable except to the blind that the key to power in America is money and the possession of huge amounts of it. After the Civil War, money was the key to ascending the social ladder, and getting a fortune was not a matter of polite duels between nimble rapiers but of brass knuckles. It was a high stakes game. Success meant glory; failure, bankruptcy and oblivion. Respect for the rule of law was ignored as irrelevant. When Jay Fiske and JP Morgan found themselves in control of the two ends of the Susquehanna railroad, they resolved the conflict by mounting locomotives at each end and then ramming them headfirst into each other. And even when one party lost, it retaliated as best as it could by ripping up tracks and destroying trestles as they went.
Competition between companies meant no quarter given and none asked. In one case, a persistent opponent of Standard Oil was blown up by dynamite. Some organizations resorted to kidnapping. There were other incidents of moral charm as well. When a great blizzard blew down telephone poles in New York, Jay Gould, a ruthless master of money markets, was forced to send his financial dispatches by messenger. His competitors kidnapped the boy, substituted a look-alike, and for days, Gould was dismayed to find his moves were known days in advance.
Not only were these titans of industry ruthless and implacable, they were vulgar and flagrantly arrogant, boasting openly about their immorality. At no time did they treat the American public with any reverence. Commodore Vanderbilt, the king of shipping and commerce, once said, “What do I care about the law? Haint I got the power?” J. Pierpont Morgan was no better. When an associate of his, Judge Gary, challenged him, he said, “I don’t want some lawyer telling me what I cannot do. I hired him to tell me how to do what I want to do.”
Finding an honest financier in those days was as rare as finding a jewel in the head of a toad. The historian Robert Heilbroner once said that the rich in the 19th century ran the country as one big casino, but what he didn’t say was that the game was almost entirely rigged. Today, we know it is. Heilbroner, Hofstadter, Josephson, and many others abound with incidents that make you turn away in moral disgust. These robber barons were alas simply ordinary men, simple, sentimental, and unimaginative and not very well educated. Some like Carnegie turned to philanthropy later in life, but they were very old by then had already spent their vital force.
Over time, after the Civil War, embraced a doctrine of a debased, heartless form of Darwinism that proclaimed that those that had emerged at the top of the conniving heap were the best fitted to survive. They claimed to be choicest flower of civilization. When the philosopher Herbert Spencer visited New York, it was almost a state occasion. Spencer, of course, was a close friend of Andrew Carnegie.
Huge financial success has a strange effect. When any one of us begins his career, little notice is taken of him or her. When a businessman becomes a captain of industry owning billions in junk bonds, your fame somehow results in his being seen as a gifted person with extraordinary skills, superior diligence and superior insight. Soon an ideology springs up around him, based on cowed servility, that embraces his poisonous practices which are all based on the maximization of profits, the minimization of risks -- as if such things were the real source of the American greatness. Hofstadter said, “Assured by intellectuals of the progressive and civilizing value of their work, encouraged by their status exemplars of the order of opportunity, exhilarated by the thought that their energies were making the country rich, industrial millionaires felt safe in their exploitation and justified their dominion.”
Every other measurement of merit was discarded as trivial or eccentric.
The long trials of reform -- the passage of child labor laws, the Factory Acts, the struggle for Social Security -- meant nothing for Big Business. The fact that economic life for the masses was intolerable meant nothing at all. For Big Business, power to compel was the grim idol it worshiped and adored. And worse, the famed barons were an incredibly crass bunch who smoked cigars wrapped in one hundred dollar bills. They were vulgar and pedestrian souls.
It is therefore a trial of forbearance to hear the descendents of such men preach to the country about “moral values.” Admiration by reflex is no admiration at all. It is not an achievement when the leg flies out when you hit the right sinew of the knee. The genuine threat to the current worship of Big Business, portraying it as the embodiment of all that is noble and generous in the American spirit, has in fact been overwhelmed by the march of events. The current array of mental defectives called Republican candidates doesn’t seem to realize their ideology has long ago become obsolete.
Men like Carnegie and Fisk compromised contaminated or ruined everything they touched, James Blaine, Roscoe Conkling -- they didn’t give, they took. They subtracted, they didn’t add. They amassed, they didn’t build. They were full of crafty self-glorification, self-exultation, a cruelty of spirit and, most of all, the blind desire to rule. Morality to them was just a pose. They were the “higher” spirits of the day; the rest of us were merely insignificant and mediocre. In the end, they were semi-barbaric in body and desire.
As “The Big Short” shows, their descendants have done everything possible to help ruin the country and cause the sufferings of thousands of ordinary people who were blameless except that they were born ordinary. The American dream, formulated by President Lincoln, said that you could rise in life if you were honest, unsparing and worked hard. Such lines seem to be musingly quaint today. The vast system of corrupt connivance, called capitalism, takes success out of our hands. The rich rig the game in their favor, their language is always vague, and it conceals and misleads. No wonder that so many average Americans are outraged. Their needs, their aspirations, and desires for success have been scorned. Most of all us who work hard are basically not rewarded. We are left behind fenced off from the wealthy while the barriers of wealth grow taller. The world today is run only by people who harbor low aims, and no relief is in sight.