The Nullification Crisis and the Bank War Quiz

PDF page 266: The Tariff of 1828 had driven Vice President Calhoun to pen his “South Carolina Exposition and Protest,” in which he argued that if a national majority acted against the interest of a regional minority, then individual states could void—or nullify—federal law. By the early 1830s, the battle over the tariff took on new urgency as the price of cotton continued to fall. In 1818, cotton had been thirty-one cents per pound. By 1831, it had sunk to eight cents per pound. While production of cotton had soared during this time and this increase contributed to the decline in prices, many southerners blamed their economic problems squarely on the tariff for raising the prices they had to pay for imported goods while their own income shrank.

PDF page 266: The Tariff of 1828 had driven Vice President Calhoun to pen his “South Carolina Exposition and Protest,” in which he argued that if a national majority acted against the interest of a regional minority, then individual states could void—or nullify—federal law. By the early 1830s, the battle over the tariff took on new urgency as the price of cotton continued to fall. In 1818, cotton had been thirty-one cents per pound. By 1831, it had sunk to eight cents per pound. While production of cotton had soared during this time and this increase contributed to the decline in prices, many southerners blamed their economic problems squarely on the tariff for raising the prices they had to pay for imported goods while their own income shrank.

PDF page 266: On the issue of nullification, South Carolina stood alone. Other southern states backed away from what they saw as the extremism behind the idea. President Jackson did not make the repeal of the 1828 tariff a priority and denied the nullifiers’ arguments. He and others, including former President Madison, argued that Article 1, Section 8 of the Constitution gave Congress the power to “lay and collect taxes, duties, imposts, and excises.” Jackson pledged to protect the Union against those who would try to tear it apart over the tariff issue. “The

PDF page 266: Resentment of the tariff was linked directly to the issue of slavery, because the tariff demonstrated the use of federal power. Some southerners feared the federal government would next take additional action against the South, including the abolition of slavery. The theory of nullification, or the voiding of unwelcome federal laws, provided wealthy slaveholders, who were a minority in the United States, with an argument for resisting the national government if it acted contrary to their interests. James Hamilton, who served as governor of South Carolina in the early 1830s, denounced the “despotic majority that oppresses us.” Nullification also raised the specter of secession; aggrieved states at the mercy of an aggressive majority would be forced to leave the Union.

PDF page 266: On the issue of nullification, South Carolina stood alone. Other southern states backed away from what they saw as the extremism behind the idea. President Jackson did not make the repeal of the 1828 tariff a priority and denied the nullifiers’ arguments. He and others, including former President Madison, argued that Article 1, Section 8 of the Constitution gave Congress the power to “lay and collect taxes, duties, imposts, and excises.” Jackson pledged to protect the Union against those who would try to tear it apart over the tariff issue. “The

PDF page 267: union shall be preserved,” he declared in 1830. To deal with the crisis, Jackson advocated a reduction in tariff rates. The Tariff of 1832, passed in the summer, lowered the rates on some products like imported goods, a move designed to calm southerners. It did not have the desired effect, however, and Calhoun’s nullifiers still claimed their right to override federal law. In November, South Carolina passed the Ordinance of Nullification, declaring the 1828 and 1832 tariffs null and void in the Palmetto State. Jackson responded, however, by declaring in the December 1832 Nullification Proclamation that a state did not have the power to void a federal law. With the states and the federal government at an impasse, civil war seemed a real possibility. The next governor of South Carolina, Robert Hayne, called for a force of ten thousand volunteers (Figure 10.9) to defend the state against any federal action. At the same time, South Carolinians who opposed the nullifiers told Jackson that eight thousand men stood ready to defend the Union. Congress passed the Force Bill of 1833, which gave the federal government the right to use federal troops to ensure compliance with federal law. The crisis—or at least the prospect of armed conflict in South Carolina—was defused by the Compromise Tariff of 1833, which reduced tariff rates considerably. Nullifiers in South Carolina accepted it, but in a move that demonstrated their inflexibility, they nullified the Force Bill.

PDF page 267: union shall be preserved,” he declared in 1830. To deal with the crisis, Jackson advocated a reduction in tariff rates. The Tariff of 1832, passed in the summer, lowered the rates on some products like imported goods, a move designed to calm southerners. It did not have the desired effect, however, and Calhoun’s nullifiers still claimed their right to override federal law. In November, South Carolina passed the Ordinance of Nullification, declaring the 1828 and 1832 tariffs null and void in the Palmetto State. Jackson responded, however, by declaring in the December 1832 Nullification Proclamation that a state did not have the power to void a federal law. With the states and the federal government at an impasse, civil war seemed a real possibility. The next governor of South Carolina, Robert Hayne, called for a force of ten thousand volunteers (Figure 10.9) to defend the state against any federal action. At the same time, South Carolinians who opposed the nullifiers told Jackson that eight thousand men stood ready to defend the Union. Congress passed the Force Bill of 1833, which gave the federal government the right to use federal troops to ensure compliance with federal law. The crisis—or at least the prospect of armed conflict in South Carolina—was defused by the Compromise Tariff of 1833, which reduced tariff rates considerably. Nullifiers in South Carolina accepted it, but in a move that demonstrated their inflexibility, they nullified the Force Bill.

PDF page 267: union shall be preserved,” he declared in 1830. To deal with the crisis, Jackson advocated a reduction in tariff rates. The Tariff of 1832, passed in the summer, lowered the rates on some products like imported goods, a move designed to calm southerners. It did not have the desired effect, however, and Calhoun’s nullifiers still claimed their right to override federal law. In November, South Carolina passed the Ordinance of Nullification, declaring the 1828 and 1832 tariffs null and void in the Palmetto State. Jackson responded, however, by declaring in the December 1832 Nullification Proclamation that a state did not have the power to void a federal law. With the states and the federal government at an impasse, civil war seemed a real possibility. The next governor of South Carolina, Robert Hayne, called for a force of ten thousand volunteers (Figure 10.9) to defend the state against any federal action. At the same time, South Carolinians who opposed the nullifiers told Jackson that eight thousand men stood ready to defend the Union. Congress passed the Force Bill of 1833, which gave the federal government the right to use federal troops to ensure compliance with federal law. The crisis—or at least the prospect of armed conflict in South Carolina—was defused by the Compromise Tariff of 1833, which reduced tariff rates considerably. Nullifiers in South Carolina accepted it, but in a move that demonstrated their inflexibility, they nullified the Force Bill.

PDF page 267: union shall be preserved,” he declared in 1830. To deal with the crisis, Jackson advocated a reduction in tariff rates. The Tariff of 1832, passed in the summer, lowered the rates on some products like imported goods, a move designed to calm southerners. It did not have the desired effect, however, and Calhoun’s nullifiers still claimed their right to override federal law. In November, South Carolina passed the Ordinance of Nullification, declaring the 1828 and 1832 tariffs null and void in the Palmetto State. Jackson responded, however, by declaring in the December 1832 Nullification Proclamation that a state did not have the power to void a federal law. With the states and the federal government at an impasse, civil war seemed a real possibility. The next governor of South Carolina, Robert Hayne, called for a force of ten thousand volunteers (Figure 10.9) to defend the state against any federal action. At the same time, South Carolinians who opposed the nullifiers told Jackson that eight thousand men stood ready to defend the Union. Congress passed the Force Bill of 1833, which gave the federal government the right to use federal troops to ensure compliance with federal law. The crisis—or at least the prospect of armed conflict in South Carolina—was defused by the Compromise Tariff of 1833, which reduced tariff rates considerably. Nullifiers in South Carolina accepted it, but in a move that demonstrated their inflexibility, they nullified the Force Bill.

PDF page 267: union shall be preserved,” he declared in 1830. To deal with the crisis, Jackson advocated a reduction in tariff rates. The Tariff of 1832, passed in the summer, lowered the rates on some products like imported goods, a move designed to calm southerners. It did not have the desired effect, however, and Calhoun’s nullifiers still claimed their right to override federal law. In November, South Carolina passed the Ordinance of Nullification, declaring the 1828 and 1832 tariffs null and void in the Palmetto State. Jackson responded, however, by declaring in the December 1832 Nullification Proclamation that a state did not have the power to void a federal law. With the states and the federal government at an impasse, civil war seemed a real possibility. The next governor of South Carolina, Robert Hayne, called for a force of ten thousand volunteers (Figure 10.9) to defend the state against any federal action. At the same time, South Carolinians who opposed the nullifiers told Jackson that eight thousand men stood ready to defend the Union. Congress passed the Force Bill of 1833, which gave the federal government the right to use federal troops to ensure compliance with federal law. The crisis—or at least the prospect of armed conflict in South Carolina—was defused by the Compromise Tariff of 1833, which reduced tariff rates considerably. Nullifiers in South Carolina accepted it, but in a move that demonstrated their inflexibility, they nullified the Force Bill.

PDF page 267: Congress established the Bank of the United States in 1791 as a key pillar of Alexander Hamilton’s financial program, but its twenty-year charter expired in 1811. Congress, swayed by the majority’s hostility to the bank as an institution catering to the wealthy elite, did not renew the charter at that time. In its place, Congress approved a new national bank—the Second Bank of the United States—in 1816. It too had a twenty-year charter, set to expire in 1836. The Second Bank of the United States was created to stabilize the banking system. More than two hundred banks existed in the United States in 1816, and almost all of them issued paper money. In other words, citizens

PDF page 267: Congress established the Bank of the United States in 1791 as a key pillar of Alexander Hamilton’s financial program, but its twenty-year charter expired in 1811. Congress, swayed by the majority’s hostility to the bank as an institution catering to the wealthy elite, did not renew the charter at that time. In its place, Congress approved a new national bank—the Second Bank of the United States—in 1816. It too had a twenty-year charter, set to expire in 1836. The Second Bank of the United States was created to stabilize the banking system. More than two hundred banks existed in the United States in 1816, and almost all of them issued paper money. In other words, citizens