The announcement by Treasury Secretary Jack Lew that Harriet Tubman will take the place of Andrew Jackson on the front of the $20 bill has caused some grumbling.
But there’s one major political figure who would be thrilled by the news: Jackson himself.
Jackson’s presence on the notes of the Federal Reserve has always been a slap in the face to the seventh president, who unequivocally hated the idea of a central bank that issued paper currency. Jackson will be finally released from a kind of monetary purgatory.
Jackson’s fear of paper money was legendary. He came of age in an era when most of the nation’s money supply consisted of notes issued by state-chartered banks. These private currencies could, in theory, be redeemed for “hard money”— gold or silver coin—at the counters of the banks that issued them. But in times of panic, banks often reneged on these promises. Jackson, who had an especially traumatic experience during the panic of 1819, emerged from that crisis with a profound distrust of paper instruments of all kinds.
His view was simple and straightforward. As he would later write: “The only currency known to the constitution of the United States is gold and silver. This is consequently the only currency which that instrument delegates to Congress the power to regulate. A general paper currency, being unknown to the constitution, does not come within the scope of any of its provisions, and cannot be regulated under its authority.”
This view would put him on a collision course with the Bank of the United States. The institution, the brainchild of Alexander Hamilton (the guy on the $10 bill), had been chartered by Congress and went through two separate iterations. Modeled on the Bank of England, it drew on both public and private resources and was the era’s closest cousin to a modern central bank. Its notes enjoyed a national circulation.
When Jackson won the presidency in 1828, he and the president of the Bank of the United States, the aristocratic Nicholas Biddle, immediately clashed. In time, their mutual animus would spawn the so-called Bank War, a titanic clash over the fate of this institution. Jackson famously told Biddle at the outset of this struggle that “I do not dislike your bank any more than all banks.” But this was disingenuous: Jackson’s hatred for the Bank of the United States grew to immense proportions.
In private, he labeled it a “hydra-headed monster” that he swore he would slay. In public, he did his best to make good on that promise, vetoing a bill to renew its charter in the summer of 1832.
Jackson’s fiery attack emboldened his supporters, and he swept to re-election that fall. Not satisfied with this victory and the inevitable death of the Bank when its charter expired in 1836, Jackson administered the coup de grace, withdrawing federal funds from its coffers, leaving it an empty shell.
And yet, not so long after his death, Jackson ended up on some of the first irredeemable paper money issued by the federal government: the greenbacks, printed during and after the Civil War. First he adorned the $5 note, then the $10 and $20 notes issued by the Federal Reserve. This paper initially could be exchanged for “hard money,” but after Franklin D. Roosevelt took the country off the gold standard, Jackson was left stranded on a piece of fiat currency worth $20.
And there he remained, spinning in his grave, until now.
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Stephen Mihm, an associate professor of history at the University of Georgia, is a contributor to the Bloomberg View.