Chapter VII

“Jeffersonism vs. Hamiltonism” During Jackson’s Administration

It has been said that Jeffersonism prevailed over Hamiltonism during Andrew Jackson’s administration,
especially in reference to the United States Bank. Much satisfaction has been drawn from this claim,
as though it were a self-evident truth. But Simpkins calls upon history to judge otherwise.

Hamilton had originated the plan for the United States Bank as an integral part of his Treasury system.
He first suggested it in 1780, in a letter to John Morris, the financial agent of the Confederation.
President Washington approved the first act to incorporate the bank in 1791.
Later, President Jefferson, on March 22, 1804, approved the bill establishing a branch bank at New Orleans.
President Madison, in 1816, re-chartered the bank, and the Supreme Court, under Chief Justice Marshall,
upheld its constitutionality.

When Jackson vetoed the bill to re-incorporate the bank, he did so on the grounds
that Congress lacked constitutional authority to establish it.
In doing so, he set himself above Washington, Hamilton, and Madison—
men who had helped to frame the Constitution—and even against the Court’s interpretation.
Simpkins writes that this was “an act of self-confidence bordering on presumption,
ignoring the wisdom of those who wrought the very fabric of our laws.”

The author continues that the destruction of the bank under Jackson’s hand
led to widespread financial instability and speculation.
Commerce faltered, credit collapsed, and the currency of the nation suffered depreciation.
The “Specie Circular” and the Panic of 1837 are presented as direct results
of what Simpkins calls “a crusade of passion rather than principle.”
He argues that Jackson’s victory was more political than philosophical—
Jefferson’s ideals were invoked, but Hamilton’s system was dismantled to the nation’s harm.

“The man who smote the monster of finance,” writes Simpkins,
“also smote the confidence of the people in their currency, and left the Republic poorer in spirit and in credit.”

He concludes that history has vindicated Hamilton’s design for a national banking system,
which, though imperfectly applied, became the model for subsequent reforms.
Thus, Jeffersonism may have triumphed in theory during Jackson’s day,
but Hamiltonism ultimately triumphed in practice.

“The lesson of that era is plain,” Simpkins concludes.
“Liberty without law is anarchy, and law without liberty is despotism.
Only in their union is the Republic safe.”