Jackson’s veto of the Bank of the United States in 1832 highlights banking concerns still apparent in the contemporary banking industry.
What would Andrew Jackson have said to the evasive and frequently arrogant Goldman Sachs executives that took a drubbing during a U.S. Senate hearing in April 2010 about their financial practices? Among other practices, Goldman sold doomed mortgage packages to investors but labeled them triple-A. Purchased by pension fund managers and others that relied on the good name and judgment of Goldman, many Americans lost millions when the scheme crashed, contributing to the greatest economic meltdown since the Great Depression. Goldman executives walked away with millions in bonuses.
Andrew Jackson’s Bank Veto Message
In 1832, Andrew Jackson sent a veto message to the U.S. Senate, refusing to permit the re-chartering of the Second Bank of the United States. Although his July 10th message highlighted numerous reasons for the veto – including the substantial investments of foreigners “mostly of Great Britain,” Jackson’s primary complaint was that the bank did not serve the “liberties of the people” but catered to a wealthy few – “…some of our own opulent citizens.”
At the end of his lengthy message, Jackson asserts that, “It is to be regretted that the rich and powerful often bend the acts of government to their selfish purposes.” Government did not exist to make the rich richer at the expense of hard working Americans, the “humble members of society.”
According to Jackson, equal protection was not a bendable construct: “there are no necessary evils in government.” He further maintains that, “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.”
Andrew Jackson’s Early Experiences with Bank Speculation
Critics of Jackson argue that he was influenced by his impoverished youth and early adult years when he lost money due to earlier bank failures that resulted in financial speculation, and that his common background clashed with the so-called Virginia Dynasty as well as the financial plutocrats of industry and finance.
Jackson, however, was proud of his background and saw himself as a man of the people. Jackson owned a plantation in Tennessee, his “Hermitage,” but his personal wealth and success had been accomplished by the sweat of his brow and the American work ethic, part of a Biblical injunction Jackson took literally.
Jackson Identified with the Everyday Common Man
Although a wealthy man himself – owning hundreds of slaves, he never forgot those Americans that gave him the popular vote in the election of 1824 (an election decided by the House of Representatives because no candidate received the necessary electoral votes) or the popular support he received in 1828. Jacksonian Democracy focuses on the common, everyday American.
He was also keenly aware that his enemies, the bank supporters and northeastern money interests, viewed him as an illiterate frontier interloper. When Harvard University conferred an honorary degree on Jackson, John Quincy Adams angrily wrote the college trustees threatening to send back his earned degree.
Jackson’s Message Today Would Hold Banks Accountable
How would Jackson deal with Goldman Sachs if he were alive today? His chastening would have included Biblical invectives (he referred to the Bank of the U.S. as the “whore of Babylon.”). Above all, he would have challenged the Congress to respond to the American people, to restore the liberties of the people, and to demand truth and accountability from the perpetrators of financial ruin affecting millions of common, hard working citizens.