Andrew Jackson: America’s First Populist President

Top 10 Scandals to Hit American PresidentsThe Skeptic’s Guide to American History

Episode 6: Andrew Jackson: An Odd Symbol of Democracy

Mark Stoler Phd (2012)

Film Review

According to Stoler, President Andrew Jackson, a well-known populist, owes his 1828 election to the elimination of the property qualification (for male voters) that occurred in most states. On inauguration day in 1829, a mob of Jackson supporters took over the White House while the new president and his family fled.

Born into poverty, Jackson became a war hero during the 1815 Battle of New Orleans. At the time of his election, he was a wealthy Tennessee planter and slave owner. By this time, the Federalist Party had collapsed, leaving a single Democrat-Republican Party supporting limited government and states rights.

Although Jackson received a plurality of the popular vote, the electoral college vote was split between four candidates. The decision was referred to the House (as designated in the Constitution), which awarded the presidency to John Quincy Adams.

In the 1828 election, Jackson defeated Adams outright.

Despite Jackson’s reputation as a “man of the people,” Stoler gives many examples of undemocratic behavior on hos part: he apposed abolition of slavery and rights for women, Blacks and Native Americans; he supported the Postmasters’ Revolt (tje refusal by Southern postmasters to deliver abolitionist materials); he supported South Carolina during the Nullification Crisis;* he lobbied for the Indian Removal Acts (which authorized the military removal of southern tribes to federal lands west of the Mississippi), and he refused to enforce Supreme Court decisions he disagreed with.**

Sovereign money enthusiasts venerate Jackson for his closure of the industry-dominated Second National Bank (precursor to the Federal Reserve) in 1833. Closing the Second National Bank was a major campaign issue in 1832 – one that voters responded to by electing Jackson to a third term.

Stoler seems a bit confused about Jackson’s constitutional reasons (ie the Constitution specifically grants the power to create money to Congress, not to private central banks) for opposing the Second National Bank.

He also seems confused about British economist Adam Smith’s views on government intervention in a so-called “free market” economy. In Book V Revenue of the Sovereign or Commonwealth, Smith makes a compelling case that government intervention is essential in free markets to ensure economic growth and general prosperity.


*South Carolina declared the federal tariffs of 1828 and 1832 unconstitutional and refused to enforce them.

**One specific decision related to Georgia’s efforts to forcibly remove Cherokee from their state. Although the tribe won the decision, Jackson refused to honor it.

The film can be viewed free on Kanopy.

https://pukeariki.kanopy.com/video/andrew-jackson-odd-symbol-democracy

Solving the Covid Economic Crisis: Taking a Page Out of History

Brother Can You Spare a Billion?

Directed by Eric Strange (2000)

Film Review

This biographical documentary, narrated by Walter Cronkite, concerns the head of Roosevelt’s Reconstruction Finance Corporation (RFC), Houston banker Jesse H Jones. The RFC was a national bank owned and operated by the US government (in contrast to the Federal Reserve, which is privately owned). Under the leadership of Jones, the RFC became the “bank of last resort,” lending money to struggling farmers, small businesses and homeowners when private banks refused to give them loans. HR 6422, a bill introduced by Illinois Representative Danny K Davis in March 2020, seeks to address the COVID economic crisis with a National Infrastructure Bank along the lines of the RFC.  (See HR 6422)

Jones, the son of a Tennessee tobacco farmer, left school after eighth grade to help his father. At 19, he moved to Houston to help run his uncle’s lumber yard. When his uncle died four years later, he became the executor of his uncle’s million dollar estate. He used this capital to leverage millions in bank loans to build a chain of lumber yards and over the years, a chain of Houston hotels and skyscrapers. He also ran a Houston bank and was part owner of the city’s major newspaper.

The major cause of the Great Depression that started in 1929 was a contraction in the global money supply, owing to private banks’ extreme reluctance to issue new loans. Then, as now, the vast majority of money (everything but notes and coins) was created by private banks when they issued loans.*

In desperation, President Herbert Hoover created the RFC in 1932, which initially only issued loans to banks (to encourage them to increase their lending) and railroads (1/3 of railroads were already bankrupt and 2/3 on the verge). For ideological reasons, Hoover vetoed a bill Congress passed to allow the RFC to also issue loans to farmers and businesses.

Jones, who first joined the RFC board under Hoover, became its chair following Roosevelt’s inauguration in 1933. The former Houston banker persuaded Roosevelt to expand lending to businesses and farmers, in addition to banks, railroads, mortgage associations, numerous federal infrastructure projects (eg extending power lines to rural American and building aqueduct supplying water to California and to assist struggling states with relief efforts. Putting more money into circulation generated rapid recovery in numerous sectors of the economy.

Rather than fund the RFC via taxation or increasing government debt, the RFC was capitalized via bonds issued to the general public by the US Treasury. It was then given the same power as private banks to create the vast majority of money it lent out.

With the US entry into World War II, the RFC would finance the massive build-up necessary in armaments manufacture. It would be abolished in 1957.

For more information about the bill that would create a National Infrastructure Bank to fulfill the same role as the RFC, contact the Coalition for a $4 Trillion Infrastructure bank at NIB Coalition


*FDR wasn’t the first president to create a national bank. He was following the example of Alexander Hamilton, John Qunicy Adams and Abraham Lincoln.

**See In Memorium: Monetary Reform Hero Stephen Zarlinga