In his dealings with the Bank and his disposal of the deposits Jackson ate sour grapes to his heart's content; and now the teeth of his adopted child Van Buren were to be set on edge.

Van Buren was the first product of what are now called "machine politics" that was put into the presidential chair. He owed his elevation solely to his own dexterous political manipulation, and to the fact that, for his own selfish ends, and knowing perfectly well their folly, he had yet favored or connived at all the actions into which the administration had been led either through Jackson's ignorance and violence, or by the crafty unscrupulousness and limited knowledge of the Kitchen Cabinet. The people at large would never have thought of him for president of their own accord; but he had become Jackson's political legatee, partly because he had personally endeared himself to the latter, and partly because the politicians felt that he was a man whom they could trust. The Jacksonian Democracy was already completely ruled by a machine, of which the most important cogs were the countless office-holders, whom the spoils system had already converted into a band of well-drilled political mercenaries. A political machine can only be brought to a state of high perfection in a party containing very many ignorant and uneducated voters; and the Jacksonian Democracy held in its ranks the mass of the ignorance of the country. Besides this such an organization requires, in order that it may do its most effective work, to have as its leader and figure-head a man who really has a great hold on the people at large, and who yet can be managed by such politicians as possess the requisite adroitness; and Jackson fulfilled both these conditions. The famous Kitchen Cabinet was so called because its members held no official positions, and yet were known to have Jackson more under their influence than was the case with his nominal advisers. They stood as the first representatives of a type common enough afterwards, and of which Thurlow Weed was perhaps the best example. They were men who held no public position, and yet devoted their whole time to politics, and pulled the strings in obedience to which the apparent public leaders moved.

Jackson liked Van Buren because the latter had served him both personally and politically—indeed Jackson was incapable of distinguishing between a political and a personal service. This liking, however, would not alone have advanced Van Buren's interests, if the latter, who was himself a master in the New York state machine, had not also succeeded in enlisting the good-will and self-interest of the members of the Kitchen Cabinet and the other intimate advisers of the president. These first got Jackson himself thoroughly committed to Van Buren, and then used his name and enormous influence with the masses, coupled with their own mastery of machine methods, to bring about the New Yorker's nomination. In both these moves they had been helped, and Van Buren's chances had been immensely improved, by an incident that had seemed at the time very unfortunate for the latter. When he was secretary of state, in carrying on negotiations with Great Britain relative to the West India trade, he had so far forgotten what was due to the dignity of the nation as to allude disparagingly, while thus communicating with a foreign power, to the course pursued by the previous administration. This extension of party lines into our foreign diplomacy was discreditable to the whole country. The anti-administration men bitterly resented it, and emphasized their resentment by rejecting the nomination of Van Buren when Jackson wished to make him minister to England. Their action was perfectly proper, and Van Buren, by right, should have suffered for his undignified and unpatriotic conduct. But instead of this, and in accordance with the eternal unfitness of things, what really happened was that his rejection by the Senate actually helped him; for Jackson promptly made the quarrel his own, and the masses blindly followed their idol. Benton exultingly and truthfully said that the president's foes had succeeded in breaking a minister only to make a president.

Van Buren faithfully served the mammon of unrighteousness, both in his own state and, later on, at Washington; and he had his reward, for he was advanced to the highest offices in the gift of the nation. He had no reason to blame his own conduct for his final downfall; he got just as far along as he could possibly get; he succeeded because of, and not in spite of, his moral shortcomings; if he had always governed his actions by a high moral standard he would probably never have been heard of. Still, there is some comfort in reflecting that, exactly as he was made president for no virtue of his own, but simply on account of being Jackson's heir, so he was turned out of the office, not for personal failure, but because he was taken as scapegoat, and had the sins of his political fathers visited on his own head.

The opposition to the election of Van Buren was very much disorganized, the Whig party not yet having solidified,—indeed it always remained a somewhat fluid body. The election did not have the slightest sectional significance, slavery not entering into it, and both Northern and Southern States voting without the least reference to the geographical belongings of the candidates. He was the last true Jacksonian Democrat—Union Democrat—who became president; the South Carolina separatists and many of their fellows refused to vote for him. The Democrats who came after him, on the contrary, all had leanings to the separatist element which so soon obtained absolute control of the party, to the fierce indignation of men like Benton, Houston, and the other old Jacksonians, whose sincere devotion to the Union will always entitle them to the gratitude of every true American. As far as slavery was concerned, however, the Southerners had hitherto had nothing whatever to complain of in Van Buren's attitude. He was careful to inform them in his inaugural address that he would not sanction any attempt to interfere with the institution, whether by abolishing it in the District of Columbia or in any other way distasteful to the South. He also expressed a general hope that he would be able throughout to follow in the footsteps of Jackson.

He had hardly been elected before the ruinous financial policy to which he had been party, but of which the effects, it must in justice be said, were aggravated by many of the actions of the Whigs, began to bear fruit after its kind. The use made of the surplus was bad enough, but the withdrawal of the United States deposits from one responsible bank and their distribution among scores of others, many of which were in the most rickety condition, was a step better calculated than any other to bring about a financial crash. It gave a stimulus to extravagance, and evoked the wildest spirit of speculation that the country had yet seen. The local banks, to whom the custody of the public moneys had been intrusted, used them as funds which they and their customers could hazard for the chance of gain; and the gambling spirit, always existent in the American mercantile community, was galvanized into furious life. The public dues were payable in the paper of these deposit banks and of the countless others that were even more irresponsible. The deposit banks thus became filled up with a motley mass of more or less worthless bank paper, which thus formed the "surplus," of which the distribution had caused Congress so much worry. Their condition was desperate, as they had been managed with the most reckless disregard for the morrow. Many of them had hardly kept as much specie in hand as would amount to one fiftieth of the aggregate of their deposits and other immediate liabilities.

The people themselves were of course primarily responsible for the then existing state of affairs; but the government had done all in its power to make matters worse. Panics were certain to occur more or less often in so speculative and venturesome a mercantile community, where there was such heedless trust in the future and such recklessness in the use of credit. But the government, by its actions, immensely increased the severity of this particular panic, and became the prime factor in precipitating its advent. Benton tried to throw the blame mainly on the bankers and politicians, who, he alleged, had formed an alliance for the overthrow of the administration; but he made the plea more half-heartedly than usual, and probably in his secret soul acknowledged its puerility.

The mass of the people were still happy in the belief that all things were working well, and that their show of unexampled prosperity and business activity denoted a permanent and healthy condition. Yet all the signs pointed to a general collapse at no distant date; an era of general bank suspensions, of depreciated currency, and of insolvency of the federal treasury was at hand. No one but Benton, however, seemed able to read the signs aright, and his foreboding utterances were laughed at or treated with scorn by his fellow statesmen. He recalled the memory of the times of 1818-19, when the treasury reports of one year showed a superfluity of revenue of which there was no want, and those of the next showed a deficit which required to be relieved by a loan; and he foretold an infinitely worse result from the inflation of the paper system, saying:—

Are we not at this moment, and from the same cause, realizing the first part—the elusive and treacherous part—of this picture? and must not the other, the sad and real sequel, speedily follow? The day of revulsion in its effects may be more or less disastrous; but come it must. The present bloat in the paper system cannot continue; violent contraction must follow enormous expansion; a scene of distress and suffering must ensue—to come of itself out of the present state of things, without being stimulated and helped on by our unwise legislation.... I am one of those who promised gold, not paper; I did not join in putting down the Bank of the United States to put up a wilderness of local banks. I did not join in putting down the currency of a national bank to put up a national paper currency of a thousand local banks. I did not strike CÆsar to make Antony master of Rome.

These last sentences referred to the passage of the act repealing the specie circular and making the notes of the banks receivable in payment of federal dues. The act was most mischievous, and Benton's criticisms both of it and of the great Whig senator who pressed it were perfectly just; but they apply with quite as much weight to Jackson's dealings with the deposits, which Benton had defended.

Benton foresaw the coming of the panic so clearly, and was so particularly uneasy about the immediate effects upon the governmental treasury, that he not only spoke publicly on the matter in the Senate, but even broached the subject in the course of a private conversation with the president-elect, to get him to try to make what preparations he could. Van Buren, cool, skillful, and far-sighted politician though he was, on this occasion showed that he was infected with the common delusion as to the solidity of the country's business prosperity. He was very friendly with Benton, and was trying to get him to take a position in his cabinet, which the latter refused, preferring service in the Senate; but now he listened with scant courtesy to the warning, and paid no heed to it. Benton, an intensely proud man, would not speak again; and everything went on as before. The law distributing the surplus among the states began to take effect; under its operations drafts for millions of dollars were made on the banks containing the deposits, and these banks, already sinking, were utterly unable to honor them. It would have been impossible, under any circumstances, for the president to ward off the blow, but he might at least, by a little forethought and preparation, have saved the government from some galling humiliations. Had Benton's advice been followed, the moneys called for by the appropriation acts might have been drawn from the banks, and the disbursing officers might have been prevented from depositing in them the sums which they drew from the treasury to provide for their ordinary expenses; thus the government would have been spared the disgrace of being obliged to stop the actual daily payments to the public servants; and the nation would not have seen such a spectacle as its rulers presented when they had not a dollar with which to pay even a day laborer, while at the same time a law was standing on the statute-book providing for the distribution of forty millions of nominal surplus.

No effort was made to stave off even so much of the impending disaster as was at that late date preventable; and a few days after Van Buren's inauguration the country was in the throes of the worst and most widespread financial panic it has ever seen. The distress was fairly appalling both in its intensity and in its universal distribution. All the banks stopped payment, and bankruptcy was universal. Bank paper depreciated with frightful rapidity, especially in the West; specie increased in value so that all the coin in the country, down to the lowest denomination, was almost immediately taken out of circulation, being either hoarded, or gathered for shipment abroad as bullion. For small change every kind of device was made use of,—tokens, bank-bills for a few cents each, or brass and iron counters.

Benton and others pretended to believe that the panic was the result of a deep-laid plot on the part of the rich classes, who controlled the banks, to excite popular hostility against the Jacksonian Democracy, on account of the caste antagonism which these same richer classes were supposed to feel towards the much-vaunted "party of the people;" and as Benton's mental vision was singularly warped in regard to some subjects, it is possible that the belief was not altogether a pretense. It is entirely unnecessary now seriously to discuss the proposition that it would be possible to drag the commercial classes into so widespread and profoundly secret a conspiracy, with such a vague end in view, and with the certainty that they themselves would be, from a business stand-point, the main sufferers.

The efforts made by Benton and the other Jacksonians to stem the tide of public feeling and direct it through the well-worn channel of suspicious fear of, and anger at, the banks, as the true authors of the general wretchedness, were unavailing; the stream swelled into a torrent and ran like a mill-race in the opposite way. The popular clamor against the administration was deafening; and if much of it was based on good grounds, much of it was also unreasonable. But a very few years before the Jacksonians had appealed to a senseless public dislike of the so-called "money power," in order to help themselves to victory; and now they had the chagrin of seeing an only less irrational outcry raised against themselves in turn, and used to oust them from their places, with the same effectiveness which had previously attended their own frothy and loud-mouthed declamations. The people were more than ready to listen to any one who could point out, or pretend to point out, the authors of, and the reasons for, the calamities that had befallen them. Their condition was pitiable; and this was especially true in the newer and Western states, where in many places there was absolutely no money at all in circulation, even the men of means not being able to get enough coin or its equivalent to make the most ordinary purchases. Trade was at a complete stand-still; laborers were thrown out of employment and left almost starving; farmers, merchants, mechanics, craftsmen of every sort,—all alike were in the direst distress. They naturally, in seeking relief, turned to the government, it being almost always the case that the existing administration receives more credit if the country is prosperous, and greater blame if it is not, than in either case it is rightfully entitled to. The Democracy was now held to strict reckoning, not only for some of its numerous real sins but also for a good many imaginary ones; and the change in the political aspect of many of the commonwealths was astounding. Jackson's own home State of Tennessee became strongly Whig; and Van Buren had the mortification of seeing New York follow suit; two stinging blows to the president and the ex-president. The distress was a godsend to the Whig politicians. They fairly raved in their anger against the administration, and denounced all its acts, good and bad alike, with fluent and incoherent impartiality. Indeed, in their speeches, and in the petitions which they circulated and then sent to the president, they used language that was to the last degree absurd in its violence and exaggeration, and drew descriptions of the iniquities of the rulers of the country which were so overwrought as to be merely ridiculous. The speeches about the panic, and in reference to the proposed laws to alleviate it, were remarkable for their inflation, even in that age of windy oratory.

Van Buren, Benton, and their associates stood bravely up against the storm of indignation which swept over the whole country, and lost neither head nor nerve. They needed both to extricate themselves with any credit from the position in which they were placed. In deference to the urgent wish of almost all the people an extra session of Congress was called especially to deal with the panic. Van Buren's message to this body was a really statesmanlike document, going exhaustively into the subject of the national finances. The Democrats still held the majority in both houses, but there was so large a floating vote, and the margins were so narrow, as to make the administration feel that its hold was precarious.

The first thing to be done was to provide for the immediate wants of the government, which had not enough money to pay even its most necessary running expenses. To make this temporary provision two plans were proposed. The fourth instalment of the surplus—ten millions—was due to the states. As there was really no surplus, but a deficit instead, it was proposed to repeal the deposit law so far as it affected their fourth payment; and treasury notes were to be issued to provide for immediate and pressing needs.

The Whigs frantically attacked the president's proposals, and held him and his party accountable for all the evils of the panic; and in truth it was right enough to hold them so accountable for part; but, after all, the harm was largely due to causes existing throughout the civilized world, and especially to the speculative folly rife among the whole American people. But it is always an easy and a comfortable thing to hold others responsible for what is primarily our own fault.

Benton did not believe, as a matter of principle, in the issue of treasury notes, but supported the bill for that purpose on account of the sore straits the administration was in, and its dire need of assistance from any source. He treated it as a disagreeable but temporary makeshift, only allowable on the ground of the sternest and most grinding necessity, He stated that he supported the issue only because the treasury notes were made out in such a form that they could not become currency; they were merely loan notes. Their chief characteristic was that they bore interest; they were transferable only by indorsement; were payable at a fixed time; were not reissuable, nor of small denominations; and were to be canceled when paid. Such being the case he favored their issue, but expressly stated that he only did so on account of the urgency of the governmental wants; and that he disapproved of any such issue until the ordinary resources of taxes and loans had been tried to the utmost and failed. "I distrust, dislike, and would fain eschew this treasury-note resource; I prefer the direct loans of 1820-21. I could only bring myself to support this present measure when it was urged that there was not time to carry a loan through in its forms; nor even then would I consent to it until every feature of a currency character had been eradicated from the bill."

A sharp struggle took place over the bill brought in by the friends of the administration and advocated by Benton, to repeal the obligation to deposit the fourth instalment of the surplus with the states. This scheme of a distribution, thinly disguised under the name of deposit to soothe the feelings of Calhoun and the other strict constructionist pundits, had worked nothing but mischief from the start; and now that there was no surplus to distribute, it would seem incredible that there should have been opposition to its partial repeal. Yet Webster, Clay, and their followers strenuously opposed even such repeal. It is possible that their motives were honest, but much more probable that they were actuated by partisan hostility to the administration, or that they believed they would increase their own popularity by favoring a plan that seemingly distributed money as a gift among the states. The bill was finally amended so as to make it imperative to pay this fourth instalment in a couple of years; yet it was not then paid, since on the date appointed the national treasury was bankrupt and the states could therefore never get the money,—which was the only satisfactory incident in the whole proceeding. The financial theories of Jackson and Benton were crude and vicious, it is true, but Webster, Clay, and most other public men of the day seem to have held ideas on the subject that were almost, if not quite, as mischievous.

The great financial measures advocated by the administration of Van Buren, and championed with especial zeal by Benton, were those providing for an independent treasury and for hard-money payments; that is, providing that the government should receive nothing but gold and silver for its revenues, and that this gold and silver should be kept by its own officers in real, not constructive, treasuries,—in strong buildings, with special officers to hold the keys. The treasury was to be at Washington, with branches or sub-treasuries at the principal points of collection and disbursement.

These measures, if successful, meant that there would be a total separation of the federal government from all banks; in the political language of the times they became known as those for the divorce of bank and state. Hitherto the local banks chosen by Jackson to receive the deposits had been actively hostile to Biddle's great bank and to its friends; but self-interest now united them all in violent opposition to the new scheme. Webster, Clay, and the Whigs generally fought it bitterly in the Senate; but Calhoun now left his recent allies and joined with Benton in securing its passage. However, it was for the time being defeated in the House of Representatives. Most of the opposition to it was characterized by sheer loud-mouthed demagogy—cries that the government was too aristocratic to accept the money that was thought good enough for the people, and similar claptrap. Benton made a very earnest plea for hard money, and especially denounced the doctrine that it was the government's duty to interfere in any way in private business; for, as usual in times of general distress, a good many people had a vague idea that in some way the government ought to step in and relieve them from the consequences of their own folly.

Meanwhile the banks had been endeavoring to resume specie payment. Those of New York had taken steps in that direction but little more than three months after the suspension. Their weaker Western neighbors, however, were not yet in condition to follow suit; and the great bank at Philadelphia also at first refused to come in with them. But the New York banks persisted in their purpose, resumed payment a year after they had suspended, and eventually the others had to fall into line; the reluctance to do so being of course attributed by Benton to "the factious and wicked machinations" of a "powerful combined political and moneyed confederation"—a shadowy and spectral creation of vivid Jacksonian imaginations, in the existence of which he persisted in believing.

Clay, always active as the friend of the banks, introduced a resolution, nominally to quicken the approach of resumption, but really to help out precisely those weak banks which did not deserve help, making the notes of the resuming banks receivable in payment of all dues to the federal government. This was offered after the banks of New York had resumed, and when all the other solvent banks were on the point of resuming also; so its nominal purpose was already accomplished, as Benton, in a caustic speech, pointed out. He then tore the resolution to shreds, showing that it would be of especial benefit to the insolvent and unsound banks, and would insure a repetition of the worst evils under which the country was already suffering. He made it clear that the proposition practically was to force the government to receive paper promises to pay from banks that were certain to fail, and therefore to force the government in turn to pay out this worthless paper to its honest creditors. Benton's speech was an excellent one, and Clay's resolution was defeated.

All through this bank controversy, and the other controversies relating to it, Benton took the leading part, as mouthpiece of the administration. He heartily supported the suggestion of the president, that a stringent bankrupt law against the banks should be passed. Webster stood out as the principal opponent of this measure, basing his objections mainly upon constitutional grounds; that is, questioning the right, rather than the expediency, of the proposed remedy. Benton answered him at length in a speech showing an immense amount of careful and painstaking study and a wide range of historical reading and legal knowledge; he replied point by point, and more than held his own with his great antagonist. His speech was an exhaustive study of the history and scope of bankruptcy laws against corporations. Benton's capacity for work was at all times immense; he delighted in it for its own sake, and took a most justifiable pride in his wide reading, and especially in his full acquaintance with history, both ancient and modern. He was very fond of illustrating his speeches on American affairs with continual allusions and references to events in foreign countries or in old times, which he considered to be more or less parallel to those he was discussing; and indeed he often dragged in these comparisons when there was no particular need for such a display of his knowledge. He could fairly be called a learned man, for he had studied very many subjects deeply and thoroughly; and though he was too self-conscious and pompous in his utterances not to incur more than the suspicion of pedantry, yet the fact remains that hardly any other man has ever sat in the Senate whose range of information was as wide as his.

He made another powerful and carefully wrought speech in favor of what he called the act to provide for the divorce of bank and state. This bill, as finally drawn, consisted of two distinct parts, one portion making provision for the keeping of the public moneys in an independent treasury, and the other for the hard-money currency, which was all that the government was to accept in payment of revenue dues. This last provision, however, was struck out, and the bill thereby lost the support of Calhoun, who, with Webster, Clay, and the other Whigs, voted against it; but, mainly through Benton's efforts, it passed the Senate, although by a very slender majority. Benton, in his speech, dwelt with especial admiration on the working of the monetary system of France, and held it up as well worthy to be copied by us. Most of the points he made were certainly good ones, although he overestimated the beneficent results that would spring from the adoption of the proposed system, believing that it would put an end for the future to all panics and commercial convulsions. In reality it would have removed only one of the many causes which go to produce the latter, leaving the others free to work as before; the people at large, not the government, were mainly to blame, and even with them it was in some respects their misfortune as much as their fault. Benton's error, however, was natural; like most other men he was unable fully to realize that hardly any phenomenon, even the most simple, can be said to spring from one cause only, and not from a complex and interwoven tissue of causation—and a panic is one of the least simple and most complex of mercantile phenomena. Benton's deep-rooted distrust of and hostility to such banking as then existed in the United States certainly had good grounds for existence.

This distrust was shown again when the bill for the re-charter of the district banks came up. The specie basis of many of them had been allowed to become altogether too low; and Benton showed himself more keenly alive than any other public man to the danger of such a state of things, and argued strongly that a basis of specie amounting to one third the total of liabilities was the only safe proportion, and should be enforced by law. He made a most forcible argument, using numerous and apt illustrations to show the need of his amendment.

Nor was the tireless Missouri senator satisfied even yet; for he introduced a resolution asking leave to bring in a bill to tax the circulation of banks and bankers, and of all corporations, companies, or individuals, issuing paper currency. One object of the bill was to raise revenue; but even more he aimed at the regulation of the currency by the suppression of small notes; and for this end the tax was proposed to be made heaviest on notes under twenty dollars, and to be annually augmented until it had accomplished its object and they had been driven out of circulation. In advocating his measure he used, as was perhaps unavoidable, some arguments that savored strongly of demagogy; but on the whole he made a strong appeal, using as precedents for the law he wished to see enacted both the then existing banking laws in England and those that had obtained previously in the history of the United States.

Taken altogether, while the Jacksonians, during the period of Van Buren's presidency, rightly suffered for their previous financial misdeeds, yet so far as their actions at the time were concerned, they showed to greater advantage than the Whigs. Nor did they waver in their purpose even when the tide of popular feeling changed. The great financial measure of the administration, in which Benton was most interested, the independent treasury bill, he succeeded in getting through the Senate twice; the first time it was lost in the House of Representatives; but on the second occasion, towards the close of Van Buren's term, firmness and perseverance met their reward. The bill passed the Senate by an increased majority, scraped through the House after a bitter contest, and became a law. It developed the system known as that of the sub-Treasury, which has proved satisfactory to the present day.

It was during Van Buren's term that Biddle's great bank, so long the pivot on which turned the fortunes of political parties, finally tottered to its fall. It was ruined by unwise and reckless management; and Benton sang a pÆan over its downfall, exulting in its fate as a justification of all that he had said and done. Yet there can be little doubt that its mismanagement became gross only after all connection with the national government had ceased; and its end, attributable to causes not originally existent or likely to exist, can hardly be rightly considered in passing judgment upon the actions of the Jacksonians in reference to it.