A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson

A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson

Carl Lane

Language: English

Pages: 264

ISBN: 1594162093

Format: PDF / Kindle (mobi) / ePub

The Last and Only Time America Was Free of Debt—and How It Led to the Two-Party Political System
“An engaging treatment of a topic of perennial concern and frequent misunderstanding, this lucid tale of the brief moment when the United States was debt-free should be on every Congress member’s bedside table.”—Peter J.Woolley, Professor of Comparative Politics, Fairleigh Dickinson University
When President James Monroe announced in his 1824 message to Congress that, barring an emergency, the large public debt inherited from the War for Independence, the Louisiana Purchase, and the War of 1812 would be extinguished on January 1, 1835, Congress responded by crafting legislation to transform that prediction into reality. Yet John Quincy Adams,Monroe’s successor, seemed not to share the commitment to debt freedom, resulting in the rise of opposition to his administration and his defeat for reelection in the bitter presidential campaign of 1828. The new president, Andrew Jackson, was thoroughly committed to debt freedom, and when it was achieved, it became the only time in American history when the country carried no national debt. In A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson, award-winning economic historian Carl Lane shows that the great and disparate issues that confronted Jackson, such as internal improvements, the “war” against the Second Bank of the United States, and the crisis surrounding South Carolina’s refusal to pay federal tariffs, become unified when debt freedom is understood as a core element of Jacksonian Democracy.
The era of debt freedom lasted only two years and ten months. As the government accumulated a surplus, a fully developed opposition party emerged—the beginning of our familiar two-party system—over rancor about how to allocate the newfound money. Not only did government move into an oppositional party system at this time, the debate about the size and role of government distinguished the parties in a pattern that has become familiar to Americans. The partisan debate over national debt and expenditures led to poorly thought out legislation, forcing the government to resume borrowing. As a result, after Jackson left office in 1837, the country fell into a major depression. Today we confront a debt that exceeds $17 trillion. Indeed, we have been borrowing ever since that brief time we freed ourselves from an oversized debt. A thoughtful, engaging account with strong relevance to today, A Nation Wholly Free is the fascinating story of an achievement that now seems fanciful.

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obvious question: “Under these circumstances, do you not think it would be very unwise policy to make any application to Congress [for recharter]…at the present session?”17 There could be only one response, and Biddle replied quickly: “We have never had any idea of applying to Congress for a renewal of the Charter at the present session—and of course should abstain from doing so now.”18 Biddle had little choice but to bide his time. Throughout 1830 Biddle waited and worried. From time to time,

reconstruction in those communities the bank eased credit. These circumstances, Adams asserted, constituted the environment within which the treasury made “a confidential intimation of a wish to pay off six millions of three per cent stocks, on the 1st of July next.” Biddle's suggestion to postpone payment until October was designed to “ease the pressure” upon the entire commercial community, especially New York's. The secretary of the treasury agreed, and the bank assumed the burden of the third

increase of our wealth and resources…,” then “it must be admitted…that the period had arrived when it would be proper to appropriate, at least, a part of the ample revenues of the country to its internal improvement.” From any point of view—“commercial, political, or military”—a system of roads and canals made sense, he argued. He even invoked the authority of George Washington, quoting the first president on the wisdom of infrastructure development. He then offered a resolution to instruct the

hypocrisy of the Jackson administration with regard to racial minorities but also on the matter of money and the pay-down of the national debt. The president, eager to remove Native Americans from the southeastern states, was more than willing to spend taxpayer dollars on colonizing them west of the Mississippi River. Steady debt reduction made the funds available without throwing debt freedom off schedule. Jackson exempted Native American removal from retrenchment. At the same time, however, he

surplus should be spent on defense. “[L]et the national defense become the next great object” of public commitment, just as debt freedom had been, “and all spare money go to that purpose.”9 The Whig-dominated Senate did not welcome Benton's remarks. After all, throwing millions into defense would not only encourage greater presidential belligerence in dealing with France, but it would also promote rather than curtail the power of Andrew Jackson.10 Yet the Senate did vote to fund the annual

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