The decision of President Andrew Jackson to divert funds from the bank drew strong support from many business people who believed that the destruction of the bank would increase the availability of credit. Jackson, however, hated all banks. Based partly on his unpleasant personal experience with debt, Jackson believed that the only sound currency was gold and silver. The President launched a crusade to replace all bank notes with hard money. In the Specie Circular of 1836, he prohibited payment for public lands with anything but gold or silver.
Initially, land sales, canal construction, cotton production, and manufacturing boomed following the decision of Jackson to divert federal funds from the bank. At the same time, inflation increased dramatically; prices rose 28 percent in three years. Then in 1837, just after the election of his hand-picked successor, Democrat Martin Van Buren, a deep financial depression struck the country. Not until the mid-1840s would the country fully recover from the effects of the Panic of 1837.
In this letter, David Crockett (1786-1836), the famous frontier hero and an anti-Jackson member of Congress from Tennessee, attacks the withdrawal of government funds from the Bank of the United States by President Jackson and calls the president a tyrant ruled by personal ambition. Crockett blamed the economic panic on Jackson and his war on the bank. In 1834, pro-Jackson forces defeated the reelection bid of Crockett to the Twenty-fourth Congress.
I will now give you a history of the times at headquarters [Washington, D.C.]. We are still engaged in debating the great question of the removal of the [Federal government's] deposits [from the Bank of the United States.] This question have consumed almost the whole of the session [of Congress].... The Senate took the vote last week on Mr. Clay's Resolutions [on the administration's decision to divert federal funds from the Bank]. First resolution was that the Secretary's reasons were insufficient, and was not satisfactory to the Senate and the other was that the President [Jackson] has violated the Laws and the Constitution. The first resolution was adopted 28 to 18 and the Second by a vote of 27 to 19.... This was the vote of the Senate and I hope the vote may be taken in the House next week. It will be a close vote. Both parties claim the victory. I am still of [the] opinion that the House will adopt similar Resolutions to that of the Senate. My reasons for these opinions is that in so large and intelligent body of men called Honourable men cannot violate principle so much as for a majority to vote for a measure that every man that knows anything must acknowledge is contrary to the laws and Constitution. I have conferred with some of our own numbers that has not acknowledged that the act was not right, that Jackson had not a friend in Congress but was sorry that the act was done, but that they must sustain their party. This is what may be called forsaking principle to follow party. This is what I hope ever to be excused from. I cannot nor will not forsake principle to follow after any party and I do hope there may be a majority in Congress that may be governed by the same motive....
I do consider the question now before Congress is one of deep interest to the American people the question is whether we will surrender up our old long and happy mode of government and take a despot. If Jackson is sustained in this act we say that the will of one man shall be the law of the land. This you know the people will never submit to. I do believe nothing keeps the people quiet at this time only the hope that Congress will give some relief to the Country. We have had memorials from more than three hundred thousand people praying for the restoration of the deposits and a revival of the Charter of the United States Bank. They state that the manufactures have all stopped and dismissed their hands and that there is men, women and children ro[a]ming over the country offering to work for their victuals. You know that such a state of things cannot be kept quiet long. This have never been the case before since previous to the old war [the War of 1812]. The people petitioned in vain...and at length we knew what followed and...my great dread is a Civil War. I do consider the South Carolina question [the Nullification controversy] nothing to compare with the present moment. We see the whole circulatory medium of the Country deranged and destroyed and the whole commercial community oppressed and distressed.... Just to gratify the ambition of one man [Jackson] that he may [w]reck his vengeance on the United States Bank. And for what? Just because it refused to lend its aid in upholding his party. The truth is he is surrounded by a set of imps...that is willing to sacrifice the country to promote their own interest....
I have no doubt of the people getting their eyes open yet in time to defeat the little political Judas, Martin Van Buren.... Never was the money of Rome more compleat on the hands of Caesar than the whole purse of the nation is at the time in the hands of our President Jackson.... He is now in possession of both sword and purse. Caesar said to the secretary of Rome give me the money and the secretary said no person have a right to ask that but the Roman Senate and Caesar said to him that it would be as easy for Caesar to take your life as to will it to another. With that the Secretary knowing that Caesar had all power he stepped aside and Caesar took the money. How was it with Andrew Jackson when he asked Mr. Duane to remove the deposits and he refused & he was then dismissed and a more pliable one appointed and the act is done and I believe they are sorry for it. No man knows where the money of the Country is. Congress has no control over it. This is a new scene in our political history.