Exam 11: Politics of the Market Revolution

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During the first half of the nineteenth century, the United States became a more market-driven society, with increasingly rapid communications and transportation. At the same time, Americans were on the move, settling western lands and building railroads to connect the new settlements with eastern cities. The South was booming as well, becoming Europe's principal supplier of cotton. With these developments, many Americans felt they were destined to reap continued economic success.Such optimism did not last. In 1819, global demand for American agricultural production (particularly cotton)plummeted, in part because of Europe's recovery after the end of the Napoleonic Wars in 1815. At the same time, the Second Bank of the United States tightened credit, due to fears about overinvestment in factories and land. With fewer people buying American goods and with credit tightened, the United States entered its first major economic depression. Land values tumbled across the nation, and the demand for goods and foodstuffs slackened. All but two banks south and west of Pennsylvania failed. Thousands of people declared bankruptcy or were sentenced to debtors' prison.The Panic of 1819 deeply affected the average American. Farmers in the West were particularly hard pressed. Having bought their farms on credit, many could not make their payments, and banks foreclosed the loans. In desperation, people turned to their state governments, demanding financial assistance during these tough times. In Kentucky and other states, voters agitated in vain for the government to declare a moratorium on the collection of debts. In general, Americans began to feel that the government should protect its constituents from economic disaster and, more importantly, from the topsy-turvy nature of a market-based economy.

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By far, the most serious crisis Jackson confronted-in fact, the most serious crisis in the nation between the Revolution and the Civil War-developed around the concept of states' rights and whether or not a state could "nullify" a federal law. Nullification emerged as a major issue during Jackson's first term.By the time Jackson was elected president in 1828, the Panic of 1819 was just an ugly memory, but Americans were still anxious about economic matters. The economy was changing so rapidly during the Market Revolution that many Americans felt they could hardly keep up. This was especially true in South Carolina, where the cotton market had been hit hard by the depression and by soil depletion. South Carolinians focused the blame for their economic problems on the high tariff placed on their goods.Congress had begun increasing America's tariffs in 1816 to protect American industries, especially the newly mechanized textile industry taking root in New England, which used southern cotton as its raw material. The western states also benefited from the tax on imported goods because taxes on European wheat, hemp, and other agricultural products made them more expensive; with the tariff, Americans would buy American goods.American tariffs did not affect southern staple crops because Europeans did not grow competing crops. As southerners saw it, they were forced to pay higher prices for goods to subsidize the economic development of the North and West.When Congress raised these tariffs in 1824, South Carolina and other southern states vigorously objected. Despite these complaints, Congress narrowly approved the tariff. Then in 1828, in a stunning move that backfired, Jackson, running for president against Adams, advocated a ridiculously high tariff, assuming it would not pass. To Jackson's shock, the Tariff of 1828, which came to be known as the "Tariff of Abominations," passed in Congress. The South was furious and, in response, the South Carolina legislature issued a document called the South Carolina Exposition .The anonymous author of this document was John C. Calhoun, Jackson's incoming vice president. The South Carolina Exposition gave voice to a new political idea: nullification. Calhoun's concept of nullification was designed to answer a serious problem of political theory: how to protect the rights of a minority in a government based on the rule of the majority. Calhoun's theory of nullification asserted that the United States was made up of independent and sovereign states. In joining the Union, Calhoun argued, states did not agree to give up their autonomy. Therefore, every state reserved the right to reject any federal law it deemed unconstitutional.In 1828, South Carolina did nothing more than articulate the idea of nullification, but in 1832, after Congress failed to revise the Tariff of Abominations, South Carolina actually put nullification into practice. The state legislature authorized the election of delegates to a popular convention, and, in November 1832, that convention passed an ordinance declaring the tariffs of 1828 and 1832 null and void in South Carolina, effective February 1, 1833.In his Proclamation on Nullification, delivered in December 1832, Jackson emphasized that the states of the Union were not independent and that, therefore, no state had the right to reject a federal law; only the Supreme Court had the authority to do that. By this logic, Calhoun's assertion that a state could withdraw from the Union was treason.To demonstrate how seriously they took the threat, Jacksonians in Congress passed the Force Bill in March 1833, which confirmed the president's authority to use the army and navy to put down insurrection. While threatening South Carolina with the possibility of force, Jackson also urged Congress to lower the tariff. As a result, Calhoun himself backed away from nullification and supported a compromise tariff bill. It went into effect on the same day as the Force Bill, March 1, 1833. South Carolina promptly repealed its nullification of the tariff, but, in a final display of spiteful defiance, it nullified the Force Bill. Jackson sagely ignored this and allowed the nullification crisis to die out.