Tuesday, April 19, 2016

Andrew Jackson Didn’t Want To Be On Your Central Bank Notes, Anyway

By Robert Tracinski

A few years back, there was an off-Broadway musical called, “Bloody, Bloody Andrew Jackson.” It was a flop. But now Broadway is host to the hit musical “Hamilton,” whose creator has lobbied for keeping his lead character on the $10 bill. Now it’s looking like Treasury Secretary Jack Lew will acquiesce, keeping Alexander Hamilton on the 10 and booting Jackson from the 20, instead.

Which proves, I guess, that big decisions about our currency can be determined by Broadway box office receipts. Who knew?

Well, maybe there’s a little more to it than that. Not only has Jackson not fared as well as Hamilton among contemporary historians, but also he really wouldn’t have wanted to be on our funny money central bank notes, anyway. And for good reason.

Contemporary historians have turned against Jackson because he owned slaves and pushed for the removal of Cherokees from the southeastern United States to the Oklahoma Territory in a forced relocation known as the “Trail of Tears.” Fair enough, though there’s a good case to be made that some of the contemporary outrage at Jackson is the usual exercise in easy moral superiority. It’s the comforting smugness of imagining yourself to be brave in 2016 for holding beliefs that were daring in 1832.

But the issue isn’t whether Jackson is an over- or underrated historical figure. Whether he was, on balance, a good president in the context of his time, does not tell us whether there is any specific reason to keep him on our money. (Whereas with Hamilton, there is no one who belongs there more.) In fact, Jackson wouldn’t have wanted to be on the kind of money we have today. You might notice that the bills you have in your wallet are called Federal Reserve Notes, issued by our central bank, an institution Jackson opposed. You might notice that they also do not say “redeemable in gold,” which Jackson would have regarded as a necessary condition for them to be real money.

When Jackson vetoed the re-authorization of the Bank of the United States in 1836, he did so on the grounds that it would give special favors to the wealthy and connected, to be paid for by everyone else. Old Hickory may have been wrong about other things, but not about this — given that we recently pledged a trillion dollars of taxpayer money to bail out the big banks, and we’re still on the hook should they ever get in trouble again. Jackson explained that the central bank “enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders.” The great innovation of our age is that we extended this privilege — and the “gratuity” paid for by the American people — from the central bank itself to the various private financial institutions regarded as “too big to fail.”

So if Jackson was an enemy of central banks and their privileges, how did he ever get onto Federal Reserve Notes in the first place? Nobody really knows for sure, except that Jackson was still very popular with the general public when the Federal Reserve was created in 1913 and started choosing who went on its bills. (They put him on the $10 bill first and then switched to $20 in 1928.) He was popular because he had a reputation for being the voice of the common man against the elites. A man who rose from modest circumstances on the frontier, rather than from the landed gentry of Virginia, Jackson was the one who took Jefferson’s Republican Party and transformed it into the Democratic Party, giving it a more populist character.

Read the rest here.

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