Andrew JacksonHated Paper Money(and corporations and national banks)

Dateline: 17 November 2012

Special From The Deliberate Agrarian

Andrew Jackson (1767-1845) was the seventh president (1829-1837) of the United States.

Andrew Jackson is one of the most controversial of American presidents. He is reviled because of his brutal treatment of Indians. His response to the nullification crisis involving South Carolina may have cast the Union-must-be-preserved die for Lincoln’s later war against the South. And Jackson apparently had no reservations about the institution of slavery. Nevertheless, I can't help but think of Andrew Jackson as one of the most admirable of our presidents (right up there with Washington & Jefferson), based solely on the brave and selfless stand he took against paper money, conniving bankers, and large corporations.

Jackson the politician was not a go-along-to-get-along kind of man. When you understand something about his battle to revoke the charter of the Second Bank of the United States (a non-government institution akin to our modern Federal Reserve), his reasons for opposing the bank, the monumental task it was to to revoke the charter, and his subsequent victory, I dare say that you can’t help but admire the man. Jackson’s war against the bank is well worth understanding, and you can get a pretty good condensed version of the story from this ten minute YouTube video: The Money Masters & Andrew Jackson
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Jackson & Paper Money

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When it comes to the subject of paper money, Jackson believed the United States Constitution clearly says that only gold and silver coin (a.k.a., “specie”) should be the legal tender of America. 

Keep in mind that Andrew Jackson’s presidency was only about 50 years after the Constitution was signed. Jackson knew several of the “founding fathers.” He was well acquainted with their thinking and the reasons for putting Article 1, Section 10 into the Constitution, wherein it states:

“No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts...”

Why would they put that in the Constitution? It was because the Founders understood from personal experience that paper money was an abomination. It was an opportunity and an invitation for public and private schemers to defraud the hardworking people of the country.

Roger Sherman (the only man to sign the Declaration of Independence, the Articles of Confederation, and the Constitution) was largely responsible for making sure that gold and silver coin was constitutionally declared to be the legal tender of the new nation. Thomas Jefferson once said of Roger Sherman: “That is Mr. Sherman, of Connecticut, a man who never said a foolish thing in his life.” Perhaps Andrew Jackson knew Sherman. It is possible. But even if he did not, I’d bet he read Roger Sherman’s famous little book about the evils of paper money.

Sherman’s booklet, first published in 1752 titled, A Caveat Against Injustice: An Inquiry Into The Evils of a Fluctuating Medium of Exchange, is must reading for anyone who wants to understand an essential first principle of sound economics, and the thinking of the Founders. Here is but one point made by Sherman in his book:

But if what is us'd as a Medium of Exchange is fluctuating in its Value it is no better than unjust Weights and Measures, both which are condemn'd by the Laws of GOD and Man, and therefore the longest and most universal Custom could never make the Use of such a Medium either lawful or reasonable.

What does he mean by a fluctuating medium of exchange? Paper money, of course. The truth about the evil of paper money has not changed in the 260 years since Roger Sherman wrote his book. Nor has it changed in the thousands of years since God declared unjust weights and measures to be an evil (see Leviticus 19:35-36 and Proverbs 11:1). 

It is a shame and a pity that America has veered so far off the intended course when it comes to money. I dare say that our nation would have none of the financial distress that currently besets us if we had wisely stayed with gold and silver coin as our money.

Now, because America did not hold fast to specie as currency,  it is a virtual certainly that our economy faces collapse and ruination in the days ahead. That is hardly in question. But what kind of economy, based on what kind of money, will come after the collapse? Will gold and silver specie again be the currency of a wise nation, or will another foolish fiat-money scheme be proposed. It behooves us all to understand this issue properly.

There is however, a risk to being an advocate of gold and silver as currency. Most people will think you are something of a kook. Or, you might be labeled as a “terrorist”— an enemy of America. Yes, we have strayed that far from truth and honesty. But it is understandable... After all, to pull the wool off the fiat-money wolf is a serious challenge to the powers that be—the powers that so efficiently extract wealth from the sheep via fractional reserve banking and paper dollar manipulations.

Americans are now slaves to the whole industrialized, centralized, debt-based paper money system that dominates their lives. Sadly, the majority of Moderns don’t understand the roots of their dilemma and the immorality of the modern financial system. If they did, they would cry out for a leader like Andrew Jackson, who would resist and route out the self-serving and powerful money masters, in and out of government, who prey on the people of this country.
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Jackson's Farewell Address

Andrew Jackson in 1845, the year he died. He lived only eight years after issuing his Presidential farewell address.

After serving two terms as President, Andrew Jackson was old, sick, and weary He retired to The Hermitage in Tennessee. But before leaving public office, he issued a farewell address to the people of America, much like George Washington did.

I think Jackson’s farewell address is as pertinent to the issues of our day as it was in 1837, especially when it comes to matters of money and government. It should be read and discussed by every person in America who cares about the future of our nation now and in the very difficult days that face us. Bearing that in mind, I present to you the following excerpts for your consideration and illumination (bold emphasis in the text is mine)...

"In reviewing the conflicts which have taken place between different interests in the United States and the policy pursued since the adoption of our present form of Government, we find nothing that has produced such deep-seated evil as the course of legislation in relation to the currency. The Constitution of the United States unquestionably intended to secure to the people a circulating medium of gold and silver. But the establishment of a national bank by Congress, with the privilege of issuing paper money receivable in the payment of the public dues, and the unfortunate course of legislation in the several States upon the same subject, drove from general circulation the constitutional currency and substituted one of paper in its place.
It was not easy for men engaged in the ordinary pursuits of business, whose attention had not been particularly drawn to the subject, to foresee all the consequences of a currency exclusively of paper, and we ought not on that account to be surprised at the facility with which laws were obtained to carry into effect the paper system. Honest and even enlightened men are sometimes misled by the specious and plausible statements of the designing. But experience has now proved the mischiefs and dangers of a paper currency, and it rests with you to determine whether the proper remedy shall be applied.

The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain. The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people. We have already seen its effects in the wild spirit of speculation in the public lands and various kinds of stock which within the last year or two seized upon such a multitude of our citizens and threatened to pervade all classes of society and to withdraw their attention from the sober pursuits of honest industry. It is not by encouraging this spirit that we shall best preserve public virtue and promote the true interests of our country; but if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government. Some of the evils which arise from this system of paper press with peculiar hardship upon the class of society least able to bear it. A portion of this currency frequently becomes depreciated or worthless,..... It is the duty of every government so to regulate its currency as to protect this numerous class, as far as practicable, from the impositions of avarice and fraud. It is more especially the duty of the United States, where the Government is emphatically the Government of the people, and where this respectable portion of our citizens are so proudly distinguished from the laboring classes of all other nations by their independent spirit, their love of liberty, their intelligence, and their high tone of moral character. Their industry in peace is the source of our wealth and their bravery in war has covered us with glory; and the Government of the United States will but ill discharge its duties if it leaves them a prey to such dishonest impositions. Yet it is evident that their interests can not be effectually protected unless silver and gold are restored to circulation.

These views alone of the paper currency are sufficient to call for immediate reform; but there is another consideration which should still more strongly press it upon your attention. 

Recent events have proved that the paper-money system of this country may be used as an engine to undermine your free institutions, and that those who desire to engross all power in the hands of the few and to govern by corruption or force are aware of its power and prepared to employ it. ....

...when the charter for the Bank of the United States was obtained from Congress it perfected the schemes of the paper system and gave to its advocates the position they have struggled to obtain from the commencement of the Federal Government to the present hour. The immense capital and peculiar privileges bestowed upon it enabled it to exercise despotic sway over the other banks in every part of the country. ....it asserted (and it undoubtedly possessed) the power to make money plenty or scarce at its pleasure, at any time and in any quarter of the Union, by controlling the issues of other banks and permitting an expansion or compelling a general contraction of the circulating medium, according to its own will. ...

The result of the ill-advised legislation which established this great monopoly was to concentrate the whole moneyed power of the Union, with its boundless means of corruption and its numerous dependents, under the direction and command of one acknowledged head, thus organizing this particular interest as one body and securing to it unity and concert of action throughout the United States, and enabling it to bring forward upon any occasion its entire and undivided strength to support or defeat any measure of the Government. In the hands of this formidable power, thus perfectly organized, was also placed unlimited dominion over the amount of the circulating medium, giving it the power to regulate the value of property and the fruits of labor in every quarter of the Union, and to bestow prosperity or bring ruin upon any city or section of the country as might best comport with its own interest or policy. 

We are not left to conjecture how the moneyed power, thus organized and with such a weapon in its hands, would be likely to use it. The distress and alarm which pervaded and agitated the whole country when the Bank of the United States waged war upon the people in order to compel them to submit to its demands can not yet be forgotten. The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, and a scene of cheerful prosperity suddenly changed into one of gloom and despondency ought to be indelibly impressed on the memory of the people of the United States. If such was its power in a time of peace, what would it not have been in a season of war, with an enemy at your doors? No nation but the freemen of the United States could have come out victorious from such a contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few, and this organized money power from its secret conclave would have dictated the choice of your highest officers and compelled you to make peace or war, as best suited their own wishes. The forms of your Government might for a time have remained, but its living spirit would have departed from it.....

...The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations.

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The paper-money system and its natural associations--monopoly and exclusive privileges--have already struck their roots too deep in the soil, and it will require all your efforts to check its further growth and to eradicate the evil. The men who profit by the abuses and desire to perpetuate them will continue to besiege the halls of legislation in the General Government as well as in the States, and will seek by every artifice to mislead and deceive the public servants. It is to yourselves that you must look for safety and the means of guarding and perpetuating your free institutions. In your hands is rightfully placed the sovereignty of the country, and to you everyone placed in authority is ultimately responsible. It is always in your power to see that the wishes of the people are carried into faithful execution, and their will, when once made known, must sooner or later be obeyed; and while the people remain, as I trust they ever will, uncorrupted and incorruptible, and continue watchful and jealous of their rights, the Government is safe, and the cause of freedom will continue to triumph over all its enemies.

But it will require steady and persevering exertions on your part to rid yourselves of the iniquities and mischiefs of the paper system and to check the spirit of monopoly and other abuses which have sprung up with it, and of which it is the main support. So many interests are united to resist all reform on this subject that you must not hope the conflict will be a short one nor success easy. My humble efforts have not been spared during my administration of the Government to restore the constitutional currency of gold and silver, and something, I trust, has been done toward the accomplishment of this most desirable object; but enough yet remains to require all your energy and perseverance. The power, however, is in your hands, and the remedy must and will be applied if you determine upon it.

In closing, if you are interested in learning more about Andrew Jackson (the good, and the bad) I recommend a History Channel documentary that you can watch on YouTube in ten parts. Here is a link to the first part (It actually starts 2 minutes into the clip): Andrew Jackson Documentary