TULIP GEMS

Andrew Jackson versus the Central Bankers

 

 

Andrew Jackson was born to poor parents on what was then the South Carolina frontier.  He grew up in a log cabin. As a boy, he took the side of Washington's colonial army and was beat and scarred by a British soldier for it.

 

When elected President of the United States in 1828, he had already distinguished himself as a self-taught lawyer, judge and plantation owner.  He was a victorious Commanding Officer in the U.S. Army in several Indian wars and in the War of 1812.

 

His humble beginnings made him a champion of the small farmers and frontiersmen who elected him.  He believed in hard work, sound money backed by gold, and in the value of the family-run farm or business.

 

JACKSON ON THE BIBLE

 

When asked for his opinion of the Bible, he replied, "That book, sir, is the rock on which our Republic rests."

 

Jackson was a strict constructionist.  He believed that the U.S. Constitution granted the central government only certain, limited powers.  In his view, all other powers not mentioned in the Constitution were reserved for the individual States.

 

In 1832, President Jackson vetoed a bill, putting an end to the Second National Bank.  He saw the Bank as an unconstitutional monopoly in which the special interests of the rich were accommodated by acts of Congress to exploit the poor.

 

Rechartered previously in 1816, the National Bank controlled all of the money collected by the Federal Government, giving it great influence over other banks and the nation's money supply.  Jackson believed the National Bank prevented free competition.

 

THE NATIONAL BANK

 

Banks in the West needed money to lend to small farmers and businesses.  These banks had to borrow money from the National Bank at high rates of interest.  When loans became hard to get, people demanded that Jackson do something about it.

 

The National Bank also sold stock to wealthy investors, many of whom were British.  Jackson warned that America ran the risk of being controlled by foreign bankers.  He viewed international bankers as a bunch of "snakes."

 

Nicholas Biddle, the director of the National Bank, had gained support in Congress by granting Congressmen loans on favorable terms.  He also opened National Bank branches throughout America.  He even tried to control Jackson.

 

When Jackson vetoed the Bank Charter Bill in 1832, he also ordered the Secretary of the Treasury to withdraw all Federal Government money from it.  Biddle knew his National Bank could not survive without government money.

 

Therefore, Biddle called in all outstanding loans to individuals.  This threw the nation into a depression (The Panic of 1837).  Biddle and his supporters tried to blame this depression on Jackson, but it backfired.

 

HARD CURRENCY

 

At the same time, Jackson faced opposition from land speculators in the West.  They were borrowing money to purchase land, speculating that they could later sell it for a higher price.  Western banks financed this land speculation with fiat paper money.  Fiat paper money is money created simply by printing it (with no backing in anything of real value, such as gold or silver).

 

This increase in the money supply (inflation) caused land prices to spiral upwards until the common man could no longer afford to buy land in the West.  Jackson then issued a  "Specie Circular" requiring that all public lands be paid for in gold and silver.

 

At first, Jackson's "Specie Circular" caused a financial panic.  But eventually, it put an end to land speculation which had been using cheap paper money (not backed by gold).

 

The U.S. Constitution had declared Gold and Silver Coins as the only legal tender and had forbidden the issuance of Bills of Credit (paper money) by the States.  But the Banks were not States, and therefore were issuing paper money not backed by gold.

 

WISDOM OF THE FOUNDING FATHERS

 

Jackson, the strict constructionist, saw the wisdom of the Founding Fathers.  The Constitution viewed hard money as a restraining influence on inflation of the money supply through the uncontrolled printing of cheap paper money.

 

Andrew Jackson was against the use of tax dollars to fund special interests.  He publicly stated, "Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress."

 

President Jackson would be rolling over in his grave if he could see the horrible inflation of our money supply today.  He would certainly oppose the unconstitutional Federal Reserve Bank, which doesn't even pretend to back its fiat paper money with gold.

 

He would fight the monopoly that the Federal Reserve has over our money supply as unconstitutional.  He would again champion the poor farmer and family businessmen.  He would demand sound money backed by gold and do away with the central bank.

 

The Importance of Local Self-Government