With presidential aspirations of his own, Van Buren used his influence to weaken Vice President John Calhoun over the issue of internal improvements. It was Van Buren who drafted Jackson's veto message on the Maysville Road bill, which would have provided indirect federal funding for a road entirely within the state of Kentucky. Politics aside, the veto probably had less to do with Jackson's opposition to internal improvements and more with the fact that the legislation primarily benefited a single state. Indeed, during Jackson's presidency, more money was spent annually on developing the nation's infrastructure than under Adams.
The Eaton affair. The rift between Jackson and Calhoun went beyond new roads; it was personal. When John H. Eaton, Jackson's secretary of war, married a widowed waitress named Peggy O'Neale, the wives of the other cabinet members refused to receive her socially. Jackson was particularly sensitive to such snubs; he blamed the death of his own wife, Rachel, shortly after he took office on the vicious attacks against her during the 1828 campaign. He confronted Floride Calhoun as the leader of Washington's social set, and their arguments became so bitter that they contributed to the estrangement between Jackson and his vice president. The situation flared into open hostility during the nullification controversy.
The nullification controversy. To southerners, who depended more on imports than any other region of the country, the Tariff of 1828 was both discriminatory and unconstitutional. Calhoun responded to it by drafting the South Carolina Exposition and Protest , which introduced the idea that states had the right to nullify (refuse to obey) any law passed by Congress they considered unjust. Jackson supported protective tariffs but agreed to a slight reduction in rates in 1832. The change did not go far enough for Calhoun. He resigned the vice presidency in protest and returned to South Carolina, whose legislature promptly sent him back to Washington as a senator.
Calhoun claimed that the only tariff permitted by the Constitution was one that raised money for the common good. Tariffs that adversely affected the economy of one part of the nation (the South) while benefiting other regions (New England and the mid‐Atlantic states) were unconstitutional. In November 1832, South Carolina passed an ordinance of nullification that forbade customs duties from being collected in its port cities under the new tariff.
Jackson wasted no time in moving against South Carolina. He proclaimed nullification itself unconstitutional, stressed that the Constitution had created a single nation rather than a group of states, and threatened to use force to collect the customs duties. The forts in Charleston harbor were put on alert by the secretary of war, and federal troops in South Carolina were prepared for action. Military confrontation was prevented through the efforts of Henry Clay, who for the second time in his career achieved a major political compromise. Congress passed two bills in March 1833, both approved by Jackson, that ultimately defused the situation. The Compromise Tariff gradually reduced duties over a ten‐year period, and the Force Bill authorized the president to enforce federal law in South Carolina by military means, if necessary. South Carolina withdrew its tariff nullification ordinance, crediting Clay's leadership rather than Jackson's threats. The solution was general enough that both Jackson and Calhoun claimed the victory.
The bank crisis. Jackson hated banks, paper money, and anyone who profited from them. Most of his ire was directed at the Second Bank of the United States because it was controlled by private interests and acted as a creditor of state banks. As the depository of federal revenues, it was able to lend money far beyond the capability of state institutions and require them to repay their loans in hard currency, not their own notes.
Established in 1816, the Second Bank was due for a new charter in 1836. Nicholas Biddle, its president, tried to get the bank rechartered four years ahead of the expiration. He was backed by Clay, who hoped to use the bank as an issue in his bid for the presidency in 1832. Congress passed the necessary legislation by a significant margin, but Jackson vetoed the bill, and its supporters did not have enough votes to override. Denouncing the early rechartering scheme, Jackson condemned the bank as a privileged monopoly that gave a few men far too much power. Even though the bank had been upheld by the Supreme Court (in McCulloch v. Maryland, 1819) and clearly had strong support in Congress, Jackson still considered the bank unconstitutional. His overwhelming electoral victory in 1832 gave him the political clout to take further action.
Not long into his second term, Jackson ordered that the operating expenses of the federal government be paid out of the existing deposits in the Second Bank and that new federal revenues be placed in selected state banks. These state banks became known as “ pet” banks. The short‐term results of this policy were twofold. Even though the Second Bank's charter would expire in 1836 by its own terms, withdrawing from the funds already in the bank and discontinuing federal deposits bled the bank dry. Meanwhile, shifting federal deposits to the state banks empowered them to print more notes and make more loans.
Jackson's criterion for state banks to become pet banks was loyalty to the Democratic party, but his original intention to limit their number was thwarted by the banks' pressing for federal deposits. By the end of 1833, there were twenty‐three pet banks. The banks issued paper money backed by federal gold and lent it to speculators to buy federal lands. Public land sales grew rapidly, and to stop excessive speculation, Jackson issued the “ Specie Circular” in 1836. It required that public land be purchased with gold or silver, not paper notes. While speculation was reduced, the new policy drew criticism from westerners, for whom hard currency was scarce. In the long run, Jackson's actions on the banks contributed to a serious economic crisis, which the president left for his hand‐picked successor to shoulder.