On March 17, 1837, two weeks after Martin Van Buren became president, one of the biggest banks in New York collapsed, sending economic shock waves through the nation. Next came the news that the cotton exchange in New Orleans had closed its doors as the market price of cotton crashed to an all-time low. Now Jeremy was in town with a delegation of Northern businessmen to warn the president and Congress that dozens of other banks were teetering on the brink of collapse and the government had to do something to prevent a huge disaster.
When Andrew Jackson revoked the charter of the Bank of the United States, he set up a new system. The federal government deposited its millions of dollars in revenues from tariffs and the sale of . public lands into well-established state banks. Senator George Stapleton had made sure the Merchants Bank of Newark, controlled by the Stapletons, was one of these “pet banks,” as the Whigs dubbed them. Almost all of them were in fact controlled by Democrats. But as William Marcy, one of Martin Van Buren’s New York lieutenants said, both in war and in politics, “To the victor belongs the spoils.”
Like most other bankers, Jeremy had loaned a lot .of this found money to investors in Western lands, whose prices seemed to be on a permanent upward spiral. Confident that more government cash was on its way, the Merchants Bank and other banks issued a flood of paper money, which they promised the users could be redeemed at any time in gold or silver (“specie”). The price of cotton cloth and everything else had soared skyward on the same glorious bubble that was kiting real estate values from Aroostook, Maine, to Andalusia, Alabama, and Jeremy had gleefully doubled the size of Principia Mills.
Jeremy had also reluctantly succumbed to George’s pressure for loans to Southern enterprises, from railroads in South Carolina and Louisiana to cotton and sugar plantations in Mississippi and Alabama. John Sladen, his brother-in-law Victor Legrand, Andrew Jackson’s son, and John C. Calhoun’s son were among Jeremy’s many grateful borrowers. This was part of Caroline’s master plan to make George a Northern senator with a following in the South.
Senator Stapleton had traveled to South Carolina and Louisiana to speak at the groundbreaking ceremonies for the railroads. He was on the committee to celebrate the twenty-fifth anniversary of the Battle of New Orleans in 1840. In the Senate, he repeatedly hailed the economic promise of the South and was hailed in turn as a friend of the region by senators from Alabama and Mississippi—new headquarters of “King Cotton.” Now this plan, and much more, seemed - to be in danger of vanishing in a whirlwind of panic.
“Next week,” Jeremy said. “On May tenth, every bank in New York is going to suspend specie payments. It’s the only way they can stave off collapse. They’ve got millions in outstanding loans from British and French banks that are being called in. The goddamn Limeys and Frogs want hard money. It’s going to trigger a tremendous panic. The Merchants Bank doesn’t have enough specie to cover a tenth of its obligations.”
“Then you’ll have to suspend payment too,” Caroline said.
“That could lead to riots, revolution. We pay our mill and railroad workers in hard money.”
“Tell them to take paper—or else,” Caroline said.
“Or else what?” Jeremy said. “Go to jail? Flee the country?”
“What if every other bank in New Jersey, and every bank in Pennsylvania, and Maryland—every bank in the country-—suspended payments?” Caroline said. “Maybe then there’d be nothing wrong with it.”
George gazed at Caroline with the sort of admiration she had not recently seen. “She may be right,” he said.
“But our charter will be revoked,” Jeremy said. “The state will shut us down.”
“Change the law,” Caroline said. “Turn the Camden and Amboy loose on them. Put a thousand workers on special trains to Trenton. Stage your own riot—peaceful, of course—in front of the statehouse.”
Jeremy shook his head. “The president has to change the government’s policy. He’s got to start accepting paper money for Western lands. That’s where our hard money’s gone. It’s all on the other side of the Appalachians.”
“He’ll never do it,” George said. “Not as long as Andrew Jackson’s alive. Little Van didn’t have the guts to talk the old man out of Tecumseh Johnson for vice president. Do you think he’s going to change anything this important? Old Hickory thinks that a hard-money policy is the key to keeping inflation from running wild. It hasn’t worked, of course, but who knows how bad things would be without it? You fellows are as much to blame as he is. You didn’t have to loan money to every fast talker who came in your door.”
“All undoubtedly, or possibly, true,” Jeremy said. “But there’s no point in blaming anyone. Something has to be done. Andrew Jackson isn’t president anymore!”
“He’s still running the Democratic Party. That makes him more important than the president,” George said. “He’s still the voice of the people.”
Caroline left the financier and the senator considering alternative strategies and rushed to Sarah Polk’s rooms at Gadsby’s Hotel. She told Sarah what she had just heard from Jeremy Biddle. Seldom had Caroline seen her friend so dismayed. “This is terrible news. Mr. Polk had a letter from General Jackson today, urging him to begin a campaign for the immediate annexation of Texas. The little coward in the White House will use this for an excuse.”
“I fear it may be a perfect excuse. The businessmen are hysterical. They’re talking of riots, revolution.”
Emily, Sarah’s tall, regal black maid, interrupted them. Mr. Sladen was in the hall, most anxious to speak with Mrs. Polk. John rushed into the room, looking almost as frantic as Jeremy Biddle. “Caroline, I didn’t expect—”
“You can speak with perfect freedom, Mr. Sladen,” Sarah Polk said. “Mrs. Stapleton and I have no secrets from each other.”
“I just received a letter from Sam Swartout. He’s been told his appointment as collector of the port of New York won’t be renewed. Can that be? Is this weasel in the White House declaring war on every Democrat who’s ever dared to disagree with him?”
“We know nothing about this, Mr. Sladen,” Sarah said.
“As Speaker, Mr. Polk is the third most powerful man in the government. Mr. Swartout has many friends.”
“I’ll mention it to him. But he has such a press of business from job seekers. Every congressman seems to think he can intercede for his favorites.”
Sladen looked more and more desperate. “Is it true what else I learned from New York? Almost every bank is on the point of failure?”
Caroline nodded and told him of Jeremy Biddle’s visit. “My God,” Sladen said. “Texas will disappear in the maelstrom. Confidentially, Sam Swartout is depending on an immediate annexation to meet some very large obligations. This could have serious implications for the Democratic Party.”
“If you’re talking about the Galveston Bay and Texas Land Company, Mr. Polk will not lift a finger for that dubious venture,” Sarah said. “I hope you don’t have any money in it.”
Since James Polk had become Speaker of the House, Sarah had acquired an imperious style. She did not hesitate to speak frankly, almost too frankly, to many people. Caroline resolved to warn her friend against letting this tendency go to far.
Or was she especially sensitive to the pain Sarah’s candor seemed to be causing John Sladen? “A great many people have money in Texas. Senator Stapleton for one,” Caroline said.
“I mean money you can’t afford to lose,” Sarah said.
Caroline could see John was angry. But he controlled himself and asked—begged would be a better word—Sarah to intercede with Mr. Polk to win another four-year appointment for Sam Swartout. “I’d consider it a very large personal favor. With Senator Calhoun’s help, we delivered at least thirty votes to Mr. Polk’s election as Speaker. We can do even better in the next Congress.”
“I fear it’s a personal vendetta, John,” Caroline said.
“Exactly,” Sarah said.
Sarah obviously had no intention o
f imperiling James Polk’s relationship with Martin Van Buren for Sam Swartout’s sake. The president controlled far more than thirty votes in the next Congress. Accepting defeat with as much grace as he could muster, John asked Caroline if he could escort her home.
In the Stapleton carriage, he told Caroline far more than he had revealed to Sarah Polk. “Sam is desperate. He’s put too much money into Texas. His accounts are short over a million dollars. If he doesn’t get reappointed, the new collector’s certain to find out about it. The explosion could blow the Democratic Party to pieces. We’ll be the laughingstock of the country.”
“Shouldn’t you have told this to Mrs. Polk? If it came to light, and Mr. Polk was known as his chief backer in the administration …”
“I don’t consider Mrs. Polk a true friend, as I do you.”
“But I consider her one. I must ask your permission to tell her as soon as possible.”
John’s silence seemed to ask, When will I be treated as a true friend? Caroline banished the intuition. It was too painful to consider the probable answer: Never.
They passed a coffle of slaves. She heard Hannibal call from the box, “Have patience, brothers. Jesus is on your side. God won’t be mocked forever,”
“Is that fellow an abolitionist?” John asked.
“He’s a Christian.”
“You should tell him to shut his Christian mouth!”
“Don’t you remember what happened to his wife?”
“You shouldn’t bring him to Washington. Leave him in New Jersey.”
“I’ll talk to George about it. May I tell Sarah Polk?”
“If you insist. My God, what a mess.”
He was losing his head, like Jeremy Biddle and George. All these astute males could not deal with defeat. Why was she able to think calmly about it? Were women used to defeat? Or had she learned to accept it in that horrible month after this man retreated to New Orleans? Had she learned that the heart continues to beat, the brain continues to think?
After leaving John at the congressional boardinghouse on I Street where he was living with twenty other Southerners, Caroline ordered Hannibal to take her back to Gadsby’s Hotel. She found Sarah dressing for, dinner at the White House. “Forgive me for intruding again, but I just learned something about Samuel Swartout that you should know immediately.”
“A million dollars!” Sarah said. “That’s more money than the entire budget of the State of Tennessee.”
“What do you think we should do? Tell the president?”
Sarah adjusted a pale blue turban on her dark head. “We’d get no thanks for it. Mr. Swartout’s Southern friends would accuse us of ratting on him.”
“No doubt.”
Sarah slipped on her engagement ring, reminding Caroline that she had left hers on her bureau. “When and if the great explosion occurs, the real damage will be to the Democratic Party in New York.”
How Machiavellian we’re becoming. More than a match for the Machiavelli in the White House, Caroline thought. “You see this as damaging a certain politician so badly he might not be renominated?”
“Voters tend to blame a president for the scandals that come to light in his administration. They lose track of when the bad apple was put in the barrel. When you add a huge financial crisis …”
“With a buffoon like Tecumseh Johnson as vice president, the next man in line for the nomination should be the Speaker of the House—the third most powerful man in the government.”
Sarah smoothed her dress and produced her Mona Lisa smile. “My dearest friend. How marvelously you read my mind.”
Delicious delicious delicious. If only she could explain to George Stapleton and John Sladen how infinitely more satisfying a moment like this was, compared to the bliss they imagined themselves bestowing on her with their prowess in the bedroom.
“The best part of it is, the Little Magician will bring it all on himself,” Caroline said. “If he weren’t a vindictive weasel, he’d let Swartout keep his job, and risk a brawl to bring Texas into the Union, and Sam would make enough money to balance his books.”
Sarah’s Mona Lisa smile almost became a triumphant Tennessee grin. James Polk bustled into the room and threw up his hands in mock dismay. The Speakership had somehow made him a larger man, without subtracting an iota from his good looks. It had also added not a little to his good humor. “Ye Gods!” he said. “I didn’t realize I was interrupting a solemn conclave.”
“We’ve just concluded it, dear,” Sarah said.
“What did you decide? Vanny should be impeached as soon as possible for failing to dance with the vice president’s lady at the inaugural ball?”
“Something a bit more important than that,” Sarah said.
“What was it?”
“Your obnoxious condescension inclines me to think you don’t deserve to be told. Do you agree, Mrs. Stapleton?”
“Definitely.”
Sarah coolly changed the subject and told Mr. Speaker about the impending financial crunch in New York. He was so distracted, there was no need to tell him what they had decided to do about Samuel Swartout.
Back at the Stapleton residence, Caroline found Jeremy and George in a much more positive frame of mind. “I’ve convinced him,” George said. “He’s going back to New Jersey on the first train out of here and pound the legislature into changing the law to let us get away with paper money for a while. He’s going to pass the word to the rest of his fellow crooks—I mean bankers—and he thinks they’ll all do the same thing in their home states.”
Over the next three months, the nation’s bankers proceeded to extricate themselves temporarily from their crisis by marching in lockstep to their state legislatures and browbeating or bribing these lawmakers into letting them suspend hard-money payments on their banknotes. The Whigs belabored the mostly Democratic politicians unmercifully. John Quincy Adams was especially cutting. At one of Caroline’s salons, he asked George if he could explain the difference between a counterfeiter and a banker.
“The answer, Senator,” rasped the old man, “is this. The counterfeiter must have the talent to create illegal money, print it on a decent press, and sign another man’s name to it. Whereas the banker prints it legally, signs his own name to the promise to pay in gold and silver, and then reneges on it without the slightest fear of a jail term.”
George and his fellow Democrats could only squirm. They did more than squirm over Texas. They agonized, as Andrew Jackson bombarded them with letters from the Hermitage, demanding action. The Texans sent a tall affable gentleman named Memucan Hunt to Washington to negotiate the trifling details of annexation, so he thought. He expected the United States to assume the Republic of Texas’s debts and confirm all its land titles, ex post facto, tout de suite. Instead, Ambassador Hunt found himself as isolated and adrift in Washington as the sole survivor of a shipwreck.
Three months after he arrived, Hunt held forth at one of Caroline’s salons about the perfidy of the man in the White House. He had spoken to the president, who .put him off with generalities. He had spoken to the secretary of state and gotten the same treatment. He was returning to Texas to tell Sam Houston that maybe it might be better to do business with the English after all. Caroline’s report on this conversation went out to the Hermitage the next day. She and George and the Polks had a quiet laugh, imagining the letter that would soon hurtle from Nashville to the White House.
“I hope the General writes it on fireproof paper,” Speaker Polk said.
It was amazing the things people were inclined to do to a president they secretly despised. As far as Senator Stapleton and Speaker Polk were concerned, Andrew Jackson was still running the country. It was an easy assumption to make, because Van Buren could not get anything through Congress. A coalition of conservative Democrats, disgusted with his feeble leadership, coalesced with the Whigs to vote down bill after bill.
It was open season on the Little Magician, in and out of Congress. In fall of 1837, John Quincy Ada
ms stumped into Caroline’s salon to sip whiskey toddy and describe his recent visit to the White House. “I’d been told the president was looking wretched. But I found no such thing. On the contrary, he grows fat and seems perfectly serene.”
“How would you compare him to other presidents you’ve known?” Caroline asked.
She noticed that John Sladen and stumpy Matthew Davis, close friend of Sam Swartout’s and former right-hand man of Aaron Burr, moved noticeably closer as Adams collected his thoughts. Davis now wrote a newspaper column called “The Spy in Washington.”
“Mr. Van Buren has many characteristics strongly resembling Mr. Madison’s—his calmness, his gentleness of manner, his easy and conciliatory temper,” Adams said. “But Madison had none of his obsequiousness, his sycophancy, his profound dissimulation and duplicity. In the last of these, he much more resembles Jefferson, though with very little of his genius. The most disgusting part of his character, his fawning servility, belonged neither to Jefferson or Madison.”
The smiles on the faces of Messrs. Sladen and Davis left no doubt that Adams’s remarks would be in the New York papers next week. Not a single man in the room, many of them Democrats, said a word in defense of the president. The ladies were equally cold. The widowed Van Buren ran a bachelor’s White House, peopled only by two of his sons and his attorney general. There were no balls or teas or receptions.
Meanwhile, Caroline and Sarah waited for the Swartout explosion to wreak havoc in New York. This was their private secret, told to neither husband. Sam Swartout had been replaced as collector of customs and immediately departed for a tour of Europe—a trip, John Sladen muttered to her, that was likely to last for the rest of his life. Early in November the bombshell hit the newspapers. Swartout’s accounts were short $1,250,000—and the federal attorney for the southern district of New York, who should have been watching him, had been a sharer in the spoils.
North and South and West, Whig newspapers chortled that the Democrats, in the person of Swartout, had stolen in one swoop more money than all the previous swindlers, defalcators, and miscellaneous crooks employed by the U.S. government since it was launched in 1789, combined. Congressmen rose to demand an immediate investigation. A special committee, put together with only token resistance from Speaker Polk, consisted of three Democrats and six Whigs.
The Wages of Fame Page 33