Cronyism

CHAPTER 15

DISMANTLING THE AMERICAN SYSTEM: A LAISSEZ - FAIRE ECONOMY

The Struggle for Free Trade

To weaken the American Empire, Democrats drastically reduced protective tariffs and public works subsidies, most notably with the Walker Tariff, the Maysville veto, and states’ general incorporation laws. They achieved resounding success because of South Carolina’s nullification movement, laissez-faire British reformers, and the growth of free market economics. Once again, Jacksonians relied on an empowered executive branch to weaken special-interest legislation, particularly Jackson’s Force Bill, Tyler’s tariff vetoes, and Jackson and Polk’s infrastructure vetoes.

The tariff war began with the Nullification Crisis, when South Carolina threatened nullification and secession. In the late 1820s, at risk of losing his home state to Radicals Thomas Cooper and William Smith, Vice President John Calhoun secretly drafted the Exposition and Protest. In essence, this influential pamphlet articulated Calhoun’s rendition of nullification: if a state legislature considered a federal law unconstitutional, it could vote for a convention to consider nullifying the law. If the convention voted to nullify the law, the state would not have to obey or enforce the law unless the Constitution was amended, at which point the nullifying state would have to obey the law or secede. To Calhoun, the Exposition allowed South Carolina to block protective tariffs and Cooper’s call for secession.

Importantly, the Exposition was far less radical than Jefferson’s Kentucky Resolutions or the neo-Antifederalist thought of Cooper and John Taylor of Caroline. First, Calhoun previously supported big government and never sincerely adhered to strict constructionism. Second, Calhoun grounded the Exposition in The Federalist Papers. This starkly contrasted with the 1820s writings of Cooper and Taylor, works heavily influenced by Robert Yates’ Secret Proceedings (1821) and its bitter criticisms of Madison, the Constitutional Convention, and The Federalist Papers. Third, Calhoun essentially nationalized Jefferson’s theory by granting that states no longer possessed the right to nullify a law if overruled by a constitutional amendment. Lastly, Calhoun advocated nullification as a substitute for, not a complement to, secession: he still wanted the presidency. Consequently, Calhoun’s nullification is closer to the Federalist opportunism of the Jeffersonian era than Antifederalist ideology. No wonder Democrats, especially Randolph, Macon, Barbour, Tyler, Crawford, and Smith, reacted negatively. These compact theory adherents believed that the best way to combat protective tariffs was through the electoral process or secession. Old Republicans’ suspicions only heightened when their nemesis Calhoun publicly supported nullification in 1831. Furthermore, Jefferson and Taylor could no longer mediate, leaving the elderly Madison, the author of the less radical Virginia Resolutions, to characteristically take the nationalist high road and denounce the doctrine.

But the Exposition appealed to the South Carolina public, groaning under unjust taxation. Party loyalties experienced a confusing realignment: Calhoun’s former big-government supporters, such as Congressman George McDuffie and Senator Robert Hayne, rapidly turned into Nullifiers while the earlier Radicals, such as Smith, became Unionists. For his part, Cooper turned into a Nullifier who still advocated secession, though he remained out of the spotlight after making inflammatory comments about religion. In the face of such chaotic developments, Jacksonians correctly perceived that opportunistic politicians led the Nullifiers, but erred by assuming that the Antifederalist tradition rejected nullification and that the doctrine was unpopular. Quite the contrary: nullification was a true reform tool and the South Carolina public demanded an immediate move to free trade. It is for this reason, William Bolt writes, that “nullification had begun as a grassroots movement.”It firmly continued the classical liberal tradition of resistance to cronyism.

In 1829, Democrats vacillated over tariff reductions, because they had committed to paying down the national debt, refusing to default or repudiate. Therefore, in his December message, Jackson recommended lowering tariffs only on miscellaneous goods. Fortunately, in the same month, Condy Raguet published The Banner of the Constitution, a journal defending Adam Smith and Jean-Baptiste Say against Mathew Carey and Hezekiah Niles. In the first issue, Raguet, who sympathized with the Nullifiers, sounded the charge for liberty to attack monopolistic tariffs. When Bryant’s Evening Post called for a free trade convention, Raguet set arrangements for September 1831.

William Belko shows that the Philadelphia Free Trade Convention scintillatingly understood the eternal battle between liberty and power. Prominent delegates included President Barbour; Gallatin; Secretary Raguet; William Smith; and Clement C. Biddle, the editor of Say’s work. The convention drafted the free trade Address to the People of the United States and Memorial to Congress. The latter, written by Gallatin, insisted that once Congress paid off the national debt, it should lower tariffs to a uniform rate between 20 and 25 percent. With this “first movement of the Free Trade Army,” Raguet proudly noted that “decisive action [now] must be fought” in Congress.

Protectionists defended their fortress. First, Carey organized a larger convention and criticized the Address under the appropriate pseudonym “Hamilton.” Second, Senator Clay concocted a “compromise” that lowered rates on goods only produced abroad to postpone debt extinguishment, thereby prolonging high rates on goods produced domestically. Third, lobbyists Carey, Niles, Harrison Gray Otis, and Boston Associate Abbott Lawrence bombarded the legislature. Against this, Democrats only achieved the Compromise Tariff of July 1832, with sectional opposition concentrated among southern Democrats, frustrated that tariffs remained too high, and northern Whigs, upset Congress had cut tariffs at all. The average rate had previously declined from 51 to 39 percent, and the new tariff would lower it to 29 percent. However, while abolishing the regressive minimum valuation for woolens, it maintained the cotton minimum and 50 percent rates for cotton, woolen, and iron goods. After so much effort, the free traders failed to achieve their goals.

Fortunately, South Carolinians renewed the siege. In August, one Nullifier confessed how difficult it was “to hold the people back” and “keep the war dogs chained.” In the 1832 elections, Nullifiers crushed the Unionists and, in a special session, the new legislature voted for a state convention. William Harper, a delegate to the Philadelphia Free Trade Convention, drafted the Ordinance of Nullification. This document declared the Tariffs of 1828 and 1832 “null, void, and no law,” effective February 1833. If Congress attempted coercion, South Carolina would secede. Similar to earlier suggestions of Congressman McDuffie, the convention demanded a uniform tariff of 12 percent to eliminate any preferential rates. The rest of the pieces fell into place: Hayne replaced James Hamilton as governor and the lame duck Calhoun, who had long grown distant from Jackson, resigned the vice presidency to take Hayne’s senate seat.

All eyes turned to Jackson. In his December message, the president firmly rejected protective tariffs now that the extinguishment of the national debt was imminent. Unfortunately, he also sent the Nullification Proclamation, adamantly declaring nullification and secession unconstitutional. The executive made it clear he would march troops into South Carolina and hang the traitors, particularly Calhoun. If the nullification convention provided an example of anticrony reform, the Proclamation contained all the makings of executive abuse because the emperor demanded a brutal suppression of resistance.

Fortunately, the Kitchen Cabinet, disapproving of nullification and Jackson’s proclamation, wanted to settle the crisis through tariff reductions. In the lame-duck Congress, New York’s Gulian C. Verplanck reported a tariff bill which Cambreleng, Polk, and Wright heartily supported. By drastically reducing rates to 20 percent within two years and removing the cotton minimum, Ritchie believed Verplanck’s bill would “pour oil on the stormy waves” of South Carolinian discontent. Unfortunately, though the president supported it, Jackson focused on acquiring legislative support for his Force Bill, which provided congressional authorization to suppress Nullifier resistance. Second, Senator Calhoun hated Van Buren and wanted to deprive New Yorkers of a resolution to the crisis. Third, and most importantly, protectionists vehemently attacked it. Clay astutely realized that if Congress failed to pass a new tariff, the incoming Jacksonian Congress would pass such legislation, and one even more free trade than Verplanck’s. To stop free trade tariffs, Clay proposed a compromise that slowly lowered rates to 20 percent over ten years. Reinforcing his counterattack, Clay introduced a separate bill that distributed revenue to the states to prolong protection.

To resolve the Nullification Crisis, Congress passed Clay’s tariff, the Force Bill, and distribution by early March. To get the president’s signature on the tariff, Congress overwhelmingly passed the Force Bill, though John Tyler cast the lone vote against it in the upper chamber. The House passed the tariff with strong Democratic support and heavy Whig resistance. Clearly, as Thomas E. Woods Jr. notes, the crisis demonstrates “the value of nullification,” for South Carolinians secured lower rates and the reassembled convention the rescinded the Ordinance. Admittedly, Jackson diverted crucial firepower to his draconian Force Bill and belatedly recognized that the new tariff only moderately decreased rates. However, the president partially redeemed himself by vetoing Clay’s distribution bill and did nothing when the South Carolina convention nullified the Force Bill. Therefore, despite the complications, William Cullen Bryant applauded the Compromise Tariff of 1833, declaring the triumph of liberty over power.

Some historians have argued that protecting slavery was the secret motivation behind the nullification movement. South Carolinians feared that if Congress could successfully impose protective tariffs, it could also pass laws restricting slavery. There is no question that South Carolina overwhelmingly supported slavery. However, the South Carolina Nullifiers, and the South overall, focused on protective tariffs. “The slavery issue,” William Belko properly notes, “had absolutely no relevance, nor was it even a remote consideration, at the Philadelphia convention or in the months following as the tariff issue fought its way to conclusion in 1833.”

During Jackson’s second term, the Compromise Tariff remained inviolate and created burgeoning Treasury surpluses, allowing senators Clay and Calhoun to push for distribution in the 1836 Deposit Act. Early next year, Cambreleng and Wright unsuccessfully tried to lower tariffs further. When the Panic of 1837 drained federal revenue, Van Buren maintained the compromise’s planned reductions but ended distribution. By January 1840, the compromise had instituted a 40 percent reduction in the excess of all rates over 20 percent. After the protectionist Harrison achieved victory in 1840, chances for a renewal of monopolistic privileges dramatically grew. The Whigs planned to justify tariff hikes by increasing spending through distribution of land revenue to the states, but John Tyler’s ascension complicated their plans. In 1841, to appease the Whigs, Tyler disastrously signed a bill that raised some rates to 20 percent as well as the Distribution Act for land revenue. He at least stipulated the suspension of distribution if tariff rates exceeded 20 percent.

Congress scheduled the compromise’s final cuts for July 1842, but this would not stop Clay’s Whigs from jacking up rates that year. After lobbyists descended upon the capital and pro-tariff forces sent petitions (including one from the upcoming-and-coming Whig lawyer Abraham Lincoln of Illinois), New York’s Millard Fillmore, chair of the House Ways and Means Committee, reported on the “Great Tariff ” and the “Little Tariff ” in June. Both repealed Tyler’s stipulation regarding distribution, and the former raised rates to protectionist levels while the latter delayed the Compromise Tariff ’s final cuts. Whigs passed both bills against solid Democrat resistance, but Tyler responded with vetoes. The Whigs then decided to pass the Great Tariff ’s protection and distribution provisions separately to appease Tyler and weaken Democrat opposition. The tariff bill squeaked through both chambers by the barest of majorities, 104-103 in the House and 24-23 in the Senate, with Whigs overwhelmingly in favor and Democrats heavily against. Although Democrats constituted virtually all northern opposition (the region favored the tariff by 108-33), enough northern Democrats, including Senator Wright, broke ranks because the tariff raised revenue for the government and no longer included distribution. Although Tyler let his guard down when he signed the tariff bill, he at least vetoed distribution.

The Tariff of 1842 raised the average rate from 20 to 30 percent, but this is misleading because the new law reduced rates on many miscellaneous items while drastically raising rates on woolen, cotton, and iron products. It included an especially egregious 160 percent rate on iron, and several owners of copper rolling mills personally visited Fillmore to ensure similar privileges for themselves. Thanks to a 70 percent tariff on textiles, the Boston Associates soon boasted annual profits of 19 percent.

The outlook for free trade improved after Democrats captured the presidency. Polk achieved substantial reductions with the 1846 Walker Tariff, named after Treasurer Robert J. Walker, who declined to attend the Philadelphia Free Trade Convention. Only a parallel push for free trade in Great Britain made this reform possible. David Ricardo had previously complained about the Corn Laws, which erected protective tariffs on foreign grains to benefit British landlords. Now, free traders Richard Cobden and John Bright traveled across Great Britain to preach laissez-faire, establishing the Anti–Corn Law League in 1839. Both British and American free traders realized they had to jointly destroy protectionists’ greatest argument: the need to retaliate against countries that legislated high rates. This concern featured prominently in midwestern tariff debates, which only supported free trade if farmers could profitably sell agricultural products across the Atlantic.

The president trumpeted free trade in his December 1845 message, castigating the crony Tariff of 1842 for providing monopolistic privileges at the expense of the poor, who disproportionately suffered the burden of higher rates. The anti–Corn Law Parliament even reprinted Walker’s 1845 tariff report for distribution. This earned the Treasurer the epithet of “Sir Robert” by the Whig Horace Greeley of the New-York Tribune, a reference to Prime Minister Robert Peel. In January 1846, Polk wrote to his ambassador to Great Britain, emphasizing the importance of repealing the Corn Laws. In February, the Treasurer submitted his own bill to the House Ways and Means Committee, leading to criticism of executive usurpation. Walker’s tariff drastically reduced protection on cotton, woolens, and iron. Once Peel and Cobden achieved victory in May, the House started debates.

As expected, protectionists, particularly the Boston Associates, vigorously defended their restrictions. But Walker and Polk exerted pressure over House Democrats, who narrowly passed the bill (114-95) against adamant Whig opposition. The administration experienced greater difficulty in the upper chamber, where the forces of power and liberty were evenly matched. Webster, the unflagging protectionist who returned to the Senate after the Boston Associates and other manufacturers paid him a hefty $37,000, led the Whigs. He developed a simple strategy: add amendments to force the bill back into the House and then try to split the free traders. The situation turned dire when William Haywood from North Carolina declared his opposition and resigned. Democrats no longer had enough strength to pass the bill. Fortunately, Polk personally enlisted Whig Senator Spencer Jarnagin of Tennessee, who agreed to vote only if the vice president, Pennsylvania’s George Dallas, cast a tie-breaking vote to move it out of committee while Jarnagin abstained. Dallas felt enormous pressure: he hailed from a protectionist state and was the son of former Treasurer Alexander J. Dallas, the man responsible for the Tariff of 1816. Heroically, the vice president did not succumb to corruption, interpreting the 1844 election as a mandate for lower tariffs. Consequently, the Senate narrowly passed the tariff, 28-27.

The Walker Tariff made free trade a national policy for the democracy: with the repeal of the Corn Laws, midwestern senators gave their support. The new law slashed the average rate to 24 percent in 1847, which gradually moved toward 20 percent in the 1850s. No wonder, then, the Cincinnati Enquirer boasted in August 1846: “The simultaneous triumph of free trade in the United States and Great Britain, whose citizens and subjects comprehend one-sixth of the human race, is the greatest event of our age.”

Thanks to South Carolinians utilizing nullification and the growth of free trade economics in the United States and Great Britain, the Jacksonian executive triumphed against the American System’s protectionism. With free trade achieved, the Democrats moved on to the vexing question of government-supported internal improvements.

A Decentralized Program for Public Works

The Jacksonian goal to institute frugality and whittle away charter regulations faced an uphill battle. They recognized that spending taxpayer funds and chartering monopolies easily corrupts politicians into supporting various interventions for electoral success. Remarkably, the determined laissez-faire Democrats used strict constructionism and executive vetoes to cut spending, pay off the public debt, strike down monopolies in the courts, and pass state-level general incorporation laws. They only failed to reduce western land prices, a goal many Jacksonians linked to axing internal improvements.

Jackson obsessed over the national debt and corporate monopolies. The president and his intellectual supporters recognized that deficit-financed internal improvements and government ownership in private corporations encouraged waste and logrolling, burdened taxpayers, and incentivized the public to support a centralized empire instead of a confederation. They also understood that government special privileges through corporate charters and other restrictions elevated one group above the rest and led to higher prices and reduced production. The Jacksonian solution was to downsize the federal and state governments, privatize transportation networks, and enact general incorporation laws that abolished the restrictive charter system.

In his 1829 December message, Jackson criticized government-subsidized local internal improvements and related stock purchases. Once Congress paid off the debt, distribution of the surplus (sanctioned by a constitutional amendment) would allow states to build their own infrastructure projects. Senator Benton, desiring to cripple the American System, embraced the message. In early 1830, the Missourian again proposed his South-West alliance: if the South favored reducing land prices from the current $1.25 minimum per acre, the West would renounce internal improvements (which Benton desired for his region) and support lower tariffs (the overriding goal of southerners). Unfortunately, Benton’s proposal floundered because southeastern Democrats, such as Senators John Tyler and William Smith, believed that lower land prices would decrease revenue and postpone debt payment. After Benton once again failed to reduce land prices, he and other western Democrats returned to supporting public works.

Without the congressional strength to tackle expenditures, the burden fell on the president. He needed to act soon: while Barbour’s explication of the Invisible Hand in early 1830 convinced the House to defeat a proposed national road from New York to Louisiana, enough Democrats voted with Whigs to authorize new internal improvement surveys; a lighthouse and coastal improvements bill; a $200,000 appropriation for the National Road; and government ownership in the Louisville and Portland Canal, the Washington Turnpike, and the Maysville Road. Clay especially desired the latter appropriation ($150,000), because the road ran entirely through Kentucky and his home town of Lexington, crucial largesse for the upcoming 1832 election.

Van Buren advised the president that the recent appropriations would strengthen the Whigs, promote consolidation, and postpone debt extinguishment. Jackson wholeheartedly agreed and vetoed the Maysville Road bill in May. Written with the assistance of Van Buren and Polk, the veto message openly defended “the construction of the Constitution set up in 1798,” arguing that local projects and stock purchases incentivized logrolling and wasteful expenditures. Astutely, the veto emphasized the hidden costs of such projects, rather than their inflated benefits, to help the public recognize their inefficient nature. Shortly thereafter, Jackson vetoed the other legislation except the survey and National Road appropriation bills, because he believed the Constitution warranted them. However, the president advocated an amendment to distinguish between local and national projects and pushed for state control of the National Road. Clay and other Whigs charged Jackson with executive usurpation, but Barbour defended the president. Notably, Thomas Ritchie praised the Maysville veto for “arresting those . . . local appropriations . . . which were wasting the public funds and bribing members of Congress out of their Constitutional principles.”

From 1828 to 1831, Democrats trimmed federal spending by 7 percent, and with high tariffs, the public debt shriveled from $58 million to $7 million by 1832 (88 percent). Clay, recognizing debt extinguishment would allow lower tariffs, schemed to increase spending by distributing land revenue to the states. When Clay secured distribution in March 1833, Jackson vetoed it on constitutional grounds and advocated lower western land prices to help the West. Unfortunately, after Congress paid off the debt in 1835 and included distribution in the 1836 Deposit Act, Jackson decided not to use the veto message he had prepared. Instead, the president signed the bill with “repugnance of feeling, and a recoil of judgement,” because he did not want to ruin his vice president’s election chances. The Washington Globe was on the mark when it criticized distribution as “corrupting largesses.” The Globe properly noted that the solution to the surplus was Benton’s South-West alliance, which Jackson himself advocated in 1833: “[R]educe the taxes; reduce the price of the public lands to actual settlers; let each and all be reduced so as to keep the revenue within the expenses of the Government.”

Overall, Jackson’s administration maintained a mixed record of frugality. After falling until 1831, federal expenditures, including on transportation, increased 15 percent until 1835 and then by a massive 76 percent from 1835 to 1836. In total, from 1828 to 1836 spending increased by 88 percent. Compared to Adams’ single-term transportation expenditures of $6.2 million, the two-term Jackson administration spent $16.1 million (roughly a one-third increase per term). The president failed to hold the line for several reasons. First, election years, particularly 1836, corrupted the president into not vetoing spending bills. Second, though Democrats cut all stock subscriptions and heavily reduced canal expenditures, they worked with Whigs to spend tremendously on lighthouses, rivers, and harbors. Congress attached these appropriations to general spending bills, making them difficult for Jackson to detect. Third, some of the increase was a nominal illusion because of exogenous price increases, which caused higher nominal expenditures. Fourth, in 1836, military spending surged during the Second Seminole War. If the Democrats wanted to achieve true reform regarding internal improvements and overall spending, they would need to practice greater fiscal discipline.

Fortunately, the Jackson administration experienced genuine success in attacking corporate privilege. After Chief Justice Marshall died in 1835, the president changed the dispensation of the Federalist court by appointing Roger Taney to Chief Justice and Barbour to associate justice (another vacancy existed). Both men opposed the American System’s special privileges, which they expressed in the spectacularly anti-crony Charles River Bridge v. Warren Bridge (1837).

In 1785, Massachusetts chartered the Charles River Bridge (CRB) for forty years, and soon extended it to seventy years. Free of competition, the CRB earned monopoly profits from tolls. But in 1828, the legislature chartered the Warren Bridge, threatening the CRB. In Federalist fashion, the CRB sued the Warren Bridge on grounds that the new charter violated the contract clause, arguing that Massachusetts had granted an irrevocable monopoly charter. In February 1837, Taney delivered the majority decision: the CRB only possessed the right to build a bridge, not the right to exclude all future competitors.

The ruling significantly weakened corporate cronyism: chartered companies did not possess an inherent monopoly. Although the ruling displayed similarities with Gibbons v. Ogden (1824), a major difference existed. While Marshall weakened a state’s right to charter a monopoly by strengthening the interstate commerce clause, Taney defended a state’s right to charter new competition. In other words, Taney struck down a monopoly and strengthened states’ rights. Furthermore, Taney’s decision led to state-level rulings against cronyism. For example, in Mohawk Bridge v. Utica and Schenectady Railroad (1837), a New York court declared that a bridge’s charter did not prohibit competition from a ferry, and in Tuckahoe Canal v. Tuckahoe and James River Railroad (1840), the Supreme Court of Appeals of Virginia ruled that a canal’s charter did not prevent railroad competition.

Despite these legal victories, the assault on government spending and privileges was nowhere near finished, especially at the state level. Between 1830 and 1839, Democrats and Whigs funneled vast sums into newly chartered canals and railroads, ballooning state debts from $26 million to $170 million. Unsurprisingly, the governments inefficiently allocated scarce resources and the panic added insult to injury, resulting in complete catastrophes.

New York, Michigan, and Indiana provide standard examples. After the Whig William Seward secured the governorship in 1838, New York hoped to recreate the Erie Canal’s magic, lavishly expanding the state’s transportation. While Whigs justified the appropriations according to “political prudence,” the branch canals unexpectedly cost $9.4 million and earned losses. In 1837, Michigan spent $5 million on public works. Every project succumbed to inefficiency and waste, particularly the Michigan Southern Railroad. For this undertaking, the state awarded construction contracts to the politically connected Cole & Clark, which charged three to four times the market price for supplies. Even worse, constructors used faulty strap-iron rails and improperly installed spikes. When Michigan sold the railroad in 1846, it recovered only $500,000 out of its $1.2 million investment. Reckless Indiana passed the Mammoth Internal Improvement Act in 1836, $10 million legislation George Taylor describes as “a maximum of incompetence, political logrolling, and large-scale peculation.” By 1841, Whigs admitted that the state had only finished three hundred miles out of a thirteen hundred mile system, which required an astounding $12 million more, an onerous burden for Indiana’s already belt-busting $15 million of debt.

These and other states could only pay their soaring obligations through punitive taxes. But newly elected Democrats refused to consent, opting for default and repudiation. They understood that unlike a voluntary loan, government borrowing ultimately relies on coercive taxes and is therefore an illegitimate transaction. Dishonoring government obligations only violates unjust private property. Of course, the Whigs would not countenance an abrogation of any government contract. But, recognizing the unpopularity of taxes, in classic Hamiltonian fashion they pushed to have the federal government assume the obligations—make the taxpayers of other states pay! Fortunately, the Van Buren and Tyler administrations held the line and Congress assumed no state debts. Instead, from 1836 to 1845, they slashed spending by 26 percent. Unfortunately, plummeting tax revenue caused the national debt to increase from $0 in 1835 to $16 million in 1845. However, the public debt had actually risen to $33 million in 1843, so by 1845 the debt was once again on a downward trajectory. Therefore, it is clear that by the beginning of Polk’s term the Jacksonian Democrats had committed to achieving true fiscal reform: paying off the national debt and cutting expenditures.

This stern discipline left states to their own measures. Some, such as Michigan and Indiana, defaulted, while others, such as Mississippi, repudiated their debt obligations. More importantly, Democrats in various states held constitutional conventions from the mid-1840s to the early 1850s. They pushed for anti-crony reforms at these highly libertarian events. First, Jacksonians severely restricted the states’ ability to borrow and invest in corporations. This led to beneficial results: over the next several decades, states that defaulted and adopted restrictions experienced smaller increases in indebtedness than other states. Second, Democrats secured general incorporation laws that removed the old charter system, significantly weakening corrupt government-business partnerships. For this reason, Steven Calabresi and Larissa Leibowitz justly note that “general incorporation laws were at the core of laissez faire and of Jacksonian thought.” Unfortunately, some loopholes existed, such as special incorporation for eminent domain and land grants. These exceptions aside, the constitutional conventions victoriously attacked cronyism.

Polk planned to continue the tradition of weakening the American System. He long favored “a plain economical Government,” insisting on frugality for public works when he served as governor of Tennessee from 1839 to 1841. Furthermore, he supported lower land prices for western settlers. The new president worried about the Memphis Convention of November 1845, a gathering of southern and western states that advocated federal support for internal improvements. Calhoun presided as the convention’s president, and his good friend James Gadsden, president of the South Carolina Railroad Company, helped organize the event. Calhoun reconciled his lifelong enthusiasm for internal improvements with his recently acquired strict constructionism on the grounds of defense, interstate commerce, and distribution. His stance, though popular in the West, cost him dearly in the South, including in his home state.

Congress felt the convention’s pressure. In 1846, western Democrats introduced a bill appropriating $1.5 million for local rivers and harbors. Proponents, such as John Wentworth, wanted Congress to embark upon a vast array of improvements. The initiation of “as many projects as possible,” explains Charles Sellers, would force “later Congresses to complete them in order to prevent the earlier appropriations from going to waste.” Translation: the cost of the new projects would be far higher than $1.5 million. It was a classic illustration of politicians concealing, or at best postponing, the actual cost of proposals to better facilitate their passage. Future taxpayers, never current voters, must always foot the bill. Party lines in the upper chamber once again displayed a clear division on the contentious issue: Whigs favored the measure 21-3, while Democrats split 13-13. At the same time, Democrats in both chambers pushed for bills lowering the price of western lands from the stubbornly high $1.25 an acre.

Polk could have secured Senator Benton’s original South-West alliance of cheap land, low tariffs, and no internal improvements, a dream even the Missourian had unfortunately given up on. This required Polk vetoing the Rivers and Harbors Bill and making sure Congress actually lowered the price of western lands. Instead, Polk rightfully vetoed the Rivers and Harbors bill but disastrously allowed southern Democrats to kill the land bill. This quite naturally frustrated western Democrats, though many admirably maintained party principles and refused to override Polk’s Rivers and Harbors veto. Even with this flaw, Polk’s admirable veto demonstrated his devotion to strict constructionism and weakening the American System.

The president’s decision regarding internal improvements was one of the last anti-crony victories achieved by the Jackson–Van Buren–Tyler–Polk quadrumvirate. Unlike the Jeffersonian Republicans, the Jacksonian Democrats’ determination, radical economic theories, and cooperation with British reformers prevented power from corrupting them to patronize Whig constituencies and expand their electoral base. The Jacksonians refused to moderate and actually practiced what they preached: free market economics. It is for this reason that Robert Kelley justly notes that by Polk’s veto,

The Manchester Radicals in Britain and the American Democrats had the substance of their dream: . . . a community whose basic economic nature was shaped by the ideas of the Scotsman Adam Smith . . . Mercantilism in its traditional form seemed to have met its demise. Tariffs were low in order to encourage international trade and subject all producers to competition; a reasonably complete separation between government and business had been achieved; and “sound money” principles to keep prices low and damp down boom and bust oscillations were being observed.

In a similar vein, Edward Spann accurately writes that “liberals found 1846 a banner year.”

But no victory is perfect. To achieve their goal, Jacksonians empowered the executive branch. Democrats relied on vetoes, presidential rotation, and executive influence over the lawmaking process. The president’s power had grown tremendously since the days of the National Republicans, and power always corrupts. While the Jacksonians destroyed most of the American System, their strengthening of the executive encouraged an expansion of the American Empire.

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William Watkins, Reclaiming the American Revolution (Oakland, CA: The Independent Institute, 2004), pp. 99–104.

William Belko, Philip Pendleton Barbour in Jacksonian America (Tuscaloosa: University of Alabama Press, 2016), p. 172; Saul Cornell, The Other Founders (Chapel Hill: The University of North Carolina Press, 1999), pp. 289, 294–98; Richard Ellis, The Union at Risk (New York: Oxford University Press, 1987), pp. 8–12, 134; Ivan Jankovic, American Counter-Revolution in Favor of Liberty (Switzerland: Palgrave Macmillan, 2019), pp. 266–69; Dan Monroe, The Republican Vision of John Tyler (College Station: Texas A&M University Press, 2003), p. 49; Norman Risjord, The Old Republicans (New York: Columbia University Press, 1965), pp. 272–76.

William Bolt, Tariff Wars and the Politics of Jacksonian America (Nashville, TN: Vanderbilt University Press, 2017), p. 118.

Michael Bordo and William Phillips, “Faithful Index to the Ambitions and Fortunes of the State,” in Economists and Higher Learning in the Nineteenth Century, ed. William Barber (New Brunswick, NJ: Transaction Publishers, 1993), pp. 56–58; Ellis, Union at Risk, p. 50; Lacy Ford, Origins of Southern Radicalism (New York: Oxford University Press, 1988), pp. 126–34, 149.

Daniel Peart, Lobbyists and the Making of US Tariff Policy (Baltimore, MD: The Johns Hopkins University Press, 2018), p. 105. See also William Belko, The Triumph of the Antebellum Free Trade Movement (Gainesville: University Press of Florida, 2012), pp. 9–12, 18–22, 30–45, 61–63, 106, 110–34, 158–59, 163, 169; Ellis, Union at Risk, pp. 21, 34–36; Douglas A. Irwin, Clashing over Commerce (Chicago: The University of Chicago Press, 2017), pp. 167–69; Peart, Making of US Tariff Policy, pp. 101–02.

Belko, Antebellum Free Trade Movement, p. 75.

Bolt, Tariff Wars, pp. 109–16; Historical Statistics of the United States, V, ed. Richard Sutch and Susan Carter (New York: Cambridge University Press, 2006), p. 510; Irwin, Clashing over Commerce, pp. 169–72; Peart, Making of US Tariff Policy, pp. 104–15, 119; Watkins, American Revolution, p. 107.

Bolt, Tariff Wars, p. 116.

Watkins, Reclaiming the American Revolution, p. 109.

Bolt, Tariff Wars, p. 120; Ellis, Union at Risk, pp. 46–50, 81–88; Irwin, Clashing over Commerce, pp. 173–75; Peart, Making of US Tariff Policy, pp. 117–18; Watkins, Reclaiming the American Revolution, pp. 109–14.

Bolt, Tariff Wars, p. 129.

Thomas Woods, Nullifi cation (Washington, DC: Regnery, 2010), p. 77.

Bolt, Tariff Wars, pp. 128-38; Donald Cole, Martin Van Buren and the American Political System (Princeton, NJ: Princeton University Press, 1984), pp. 240-43; Ellis, Union at Risk, p. 181; Daniel Feller, The Public Lands in Jacksonian Politics (Madison: The University of Wisconsin Press, 1984), pp. 164-65; Irwin, Clashing over Commerce, pp. 177-81; Peart, Making of US Tariff Policy, pp. 118-35; Robert Remini, Andrew Jackson, vol. 3 (New York: History Book Club, 1998), pp. 40-42; Edward Spann, Ideals and Politics (Albany: State University of New York Press, 1972), pp. 53; Watkins, Reclaiming the American Revolution, pp. 114-16.

William Freehling, Prelude to Civil War (New York: Oxford University Press, 1965).

Belko, Antebellum Free Trade Movement, p. 162. See also Ford, Origins of Southern Radicalism, pp. 121-25, 137; Remini, Andrew Jackson, 3, pp. 14-16, 34, 42-44.

Bolt, Tariff Wars, pp. 142–61, 176; Feller, Public Lands, pp. 175–83; Historical Statistics, 5, p. 510; Jeffrey Rogers Hummel, “Martin Van Buren,” in Reassessing the Presidency, ed. John V. Denson (Auburn, AL: Mises Institute, 2001), pp. 179–80; Irwin, Clashing over Commerce, pp. 181–84; Peart, Making of US Tariff Policy, pp. 135–45, 210–11; Lindsay Regele, Manufacturing Advantage (Baltimore, MD: The Johns Hopkins University Press, 2019), p. 144.

Peart, Making of US Tariff Policy, pp. 145–47; Jim Powell, The Triumph of Liberty (New York: The Free Press, 2000), pp. 123–30; Murray N. Rothbard, An Austrian Perspective on the History of Economic Thought, vol. 2, Classical Economics (Auburn, AL: Mises Institute, 2006), pp. 97, 447–48.

James Shenton, Robert John Walker (New York: Columbia University Press, 1961), p. 76.

William Belko, “‘A Tax on the Many, to Enrich a Few’,” Journal of the History of Economic Thought (June 2015): 281–82; Bolt, Tariff Wars, pp. 174–86; Irwin, Clashing over Commerce, pp. 185–92; Peart, Making of US Tariff Policy, pp. 147–67, 211; Charles Sellers, James K. Polk, Continentalist (Princeton, NJ: Princeton University Press, 1966), pp. 447–67; Shenton, Robert John Walker, pp. 49, 75–85.

Bolt, Tariff Wars, p. 185. See also Historical Statistics, 5, pp. 510–11; Irwin, Clashing over Commerce, pp. 192–93.

Anthony Comegna, “‘The Dupes of Hope Forever’,” Doctoral dissertation in history, University of Pittsburgh (2016), pp. 29–30, 35–36; Ellis, Union at Risk, pp. 19–25; Spann, Ideals and Politics, pp. 67–72, 128; Lawrence White, “William Leggett,” History of Political Economy (June 1986): 311–13.

Ellis, Union at Risk, pp. 20–24; Feller, Public Lands, pp. 111–36.

Paul Kahan, The Bank War (Yardley, PA: Westholme Publishing, 2016), pp. 77–78.

Risjord, The Old Republicans, p. 271. See also Belko, Philip Pendleton Barbour, pp. 151–58; Feller, Public Lands, pp. 136–42; Carl Lane, A Nation Wholly Free (Yardley, PA: Westholme Publishing, 2014), pp. 79–85; Robert Remini, Andrew Jackson, vol. 2 (New York: History Book Club, 1998), pp. 248–56.

Feller, Public Lands, p. 183.

Remini, Andrew Jackson, 3, p. 326.

Ibid., p. 326.

Ellis, Union at Risk, pp. 24–25; Feller, Public Lands, pp. 162–71, 180–83; Historical Statistics, V, pp. 80, 91; John Larson, Internal Improvement (Chapel Hill: The University of North Carolina Press, 2001), pp. 188, 190–91; Remini, Andrew Jackson, 3, pp. 318–26.

Belko, Philip Pendleton Barbour, pp. 180–81, 186–87; Philip Burch, Elites in American History, vol. 1 (New York: Holmes & Meier Publishers, 1981), pp. 158, 166, 173; Steven Calabresi and Larissa Leibowitz, “Monopolies and the Constitution,” Harvard Journal of Law & Public Policy (Summer 2013): 1019–23; Arthur M. Schlesinger Jr., The Age of Jackson (Boston, MA: Little, Brown, 1945), pp. 324–26.

Lee Benson, The Concept of Jacksonian Democracy (Princeton, NJ: Princeton University Press, 1961), p. 105.

George Taylor, The Transportation Revolution (New York: Holt, Rinehart and Winston, 1951), p. 47.

Arthur Ekirch, “Democracy and Laissez Faire,” Journal of Libertarian Studies (Fall 1977): 321; Burton Folsom and Anita Folsom, Uncle Sam Can’t Count (New York: HarperCollins Publishers, 2014), pp. 61–67, 70; Larson, Internal Improvement, pp. 208–14; Reginald McGrane, Foreign Bondholders and American State Debts (New York: Macmillan, 1935), pp. 6–7; John Wallis, Richard Sylla, and Arthur Grinath, “Sovereign Debt and Repudiation, NBER Working Paper Series (September 2004): 17.

Historical Statistics, 5, p. 80; McGrane, Bondholders, Debts, pp. 26–28, 35–40, 46– 48; Murray N. Rothbard, “The History of Money and Banking Before the Twentieth Century,” in A History of Money and Banking in the United States, ed. Joseph T. Salerno (Auburn, AL: Mises Institute, 2002), pp. 101–03.

Calabresi and Leibowitz, “Monopolies and the Constitution,” p. 1072.

Folsom and Folsom, Uncle Sam Can’t Count, p. 71; Jeffrey Rogers Hummel, “The Consequences of a United States Default or Repudiation,” in Economic and Political Change after Crisis, ed. Stephen Balch and Benjamin Powell (London: Routledge, 2016), pp. 115–16; John Wallis, “Constitutions, Corporations, and Corruption,” The Journal of Economic History (March 2005): 216–19, 231–35, 242–45.

Charles Sellers, James K. Polk, Jacksonian (Princeton, NJ: Princeton University Press, 1957), p. 152.

Norman Graebner, Empire on the Pacific (New York: The Ronald Press Company, 1955), p. 96; John Niven, John C. Calhoun and the Price of Union (Baton Rouge: Louisiana State University Press, 1988), pp. 293–95; Sellers, James K. Polk, Continentalist, pp. 318, 329, 346; Sellers, James K. Polk, Jacksonian, pp. 344–48, 362–63, 439.

Sellers, James K. Polk, Continentalist, p. 453.

Sellers, Polk, Continentalist, pp. 320, 452–53, 471–74; Silbey, Shrine, pp. 44–48, 71–72, 76, 84.

Robert Kelley, The Cultural Pattern in American Politics (New York: University Press of America, 1979), p. 158.

Spann, Ideals and Politics, p. 130.