Boom and Bust 259legislature then authorized the raising of an army and
appropriated money to supply it with weapons.
Jackson quickly began military preparations of his
own, telling friends that he would have 50,000 men
ready to move in a little over a month. He also made
a statesmanlike effort to end the crisis peaceably. First
he suggested to Congress that it lower the tariff fur-
ther. On December 10 he delivered a “Proclamation
to the People of South Carolina.” Nullification could
only lead to the destruction of the Union: “The laws
of the United States must be executed. I have no dis-
cretionary power on the subject.... Those who told
you that you might peaceably prevent their execution
deceived you.” Old Hickory added sternly, “Disunion
by armed force istreason. Are you really ready to
incur its guilt?” Jackson’s reasoning profoundly
shocked even opponents of nullification. If South
Carolina did not back down, the president’s threat to
use force would mean civil war and possibly the
destruction of the Union he claimed to be defending.
Calhoun sought desperately to control the crisis.
By prearrangement with Senator Hayne, he resigned as
vice president and was appointed to replace Hayne in
the Senate, where he led the search for a peaceful solu-
tion. Having been defeated in his campaign for the
presidency, Clay was a willing ally. In addition, many
who admired Jackson nonetheless, as Van Buren later
wrote, “distrusted his prudence,” fearing that he would
“commit some rash act.” They believed in dealing with
the controversy by discussion and compromise.
As a result, administration leaders introduced both
a new tariff bill and a Force Bill granting the president
additional authority to execute the revenue laws.
Jackson was perfectly willing to see the tariff reduced
but insisted that he was determined to enforce the law.
As the February 1 deadline approached, he claimed
that he could raise 200,000 men if needed to suppress
resistance. “Union men, fear not,” he said. “The Union
will be preserved.”
Jackson’s determination sobered the South
Carolina radicals. Their appeal for the support of
other southern states fell on deaf ears: All rejected the
idea of nullification. The unionist minority in South
Carolina added to the radicals’ difficulties by threat-
ening civil war if federal authority were defied.
Calhoun, though a brave man, was alarmed for his
own safety, for Jackson had threatened to “hang him
as high as Haman” if nullification were attempted.
Observers described him as “excessively uneasy.” He
was suddenly eager to avoid a showdown.
Ten days before the deadline, South Carolina
postponed nullification pending the outcome of the
tariff debate. Then, in March 1833, Calhoun and Clay
pushed a compromise tariff through Congress. As
part of the agreement Congress also passed the Force
Bill, mostly as a face-saving device for the president.
The compromise reflected the willingness of the
North and West to make concessions in the interest of
national harmony. And so the Union weathered the
storm. Having stepped to the brink of civil war, the
nation had drawn hastily back. The South Carolina legis-
lature professed to be satisfied with the new tariff (in fact
it made few immediate reductions, providing for a grad-
ual lowering of rates over a ten-year period) and repealed
the Nullification Ordinance, saving face by nullifying the
Force Act, which was now a dead letter. But the radical
South Carolina planters were becoming convinced that
only secession would protect slavery. The nullification
fiasco had proved that they could not succeed without
the support of other slave states. Thereafter they devoted
themselves ceaselessly to obtaining it.
South Carolina’s Ordinance of Nullification
atmyhistorylab.comBoom and Bust
During 1833 and 1834 Secretary of the Treasury Taney
insisted that the pet banks maintain large reserves. But
other state banks began to offer credit on easy terms,
aided by a large increase in their reserves of gold and sil-
ver resulting from causes unconnected with the policies
of either the government or Biddle’s Bank. A decline in
the Chinese demand for Mexican silver led to increased
exports of the metal to the United States, and the rise
of American interest rates attracted English capital into
the country. Heavy English purchases of American cot-
ton at high prices also increased the flow of specie into
American banks. These developments caused bank
notes in circulation to jump from $82 million in
January 1835 to $120 million in December 1836.
Bank deposits rose even more rapidly.
Much of the new money flowed into speculation in
land; a mania to invest in property swept the country.
The increased volume of currency caused prices to soar
15 percent in six months, buoying investors’ spirits and
making them ever more optimistic about the future. By
the summer of 1835 one observer estimated that in
New York City, which had about 250,000 residents,
enough house lots had been laid out and sold to support
a population of 2 million. Chicago at this time had only
2,000 to 3,000 inhabitants, yet most of the land for
twenty-five miles around had been sold and resold in
small lots by speculators anticipating the growth of the
area. Throughout the West farmers borrowed money
from local banks by mortgaging their land, used the
money to buy more land from the government, and
then borrowed still more money from the banks on the
strength of their new deeds.
So long as prices rose, the process could be repeated
endlessly. In 1832, while the Bank of the United States
still regulated the money supply, federal income from
the sale of land was $2.6 million; in 1834 it wasReadtheDocument