I was originally drawn to the presidency of Andrew Jackson because of the story during his administration of land speculation and the crisis over the Bank of the United States. But the era of the 7th President, 1829-1837, is also one where the issue of tariffs played a large role, similar to the situation today in this country with the recent imposition of hefty ones on foreign steel imports.

However, one cannot discuss the Jackson Era without first delving into an issue that was all consuming during the initial year of his administration and which also played a key role in deciding who would succeed him in the White House, that being the Peggy Eaton affair.

Now, granted, this has practically zero to do with Wall Street history, but in light of the fact that stories like Enron contain more than a kernel of sex, too, in addition to more mundane matters like accounting irregularities, a little diversion of this kind (for readers, that is) never hurt anyone.

We won't go into Jackson's early years here, saving what's pertinent for later chapters, but suffice it to say that for all of his rough edges, Andrew Jackson was a man with a sense of honor and a chivalrous attitude toward "the fair" (as he generally referred to ladies) as well as excellent manners.

Having defeated the incumbent, John Quincy Adams, in the election of 1828, Jackson took office on March 4, 1829, democracy's chieftain, saying in part, "The Federal Constitution must be obeyed, state rights preserved, our national debt must be paid, direct taxes and loans avoided, and the Federal Union preserved. These are the objects I have in view, and regardless of all consequences, will carry into effect." Following his oration on the Capitol steps, he then proceeded to allow the commoners to celebrate with him in the White House. What a mistake. Afterwards, he was called "King Mob," as every Tom, Dick, and Abigail took up the invitation and promptly trashed the place. It got so bad inside that the only way to clear it was to offer a stiff punch outside.

After this rough start, Andrew Jackson probably thought he could get down to the peoples' business, but, alas, that wasn't to be. You see, one of his loyal aides from the Indian fighting days, Major John Eaton, was now a U.S. Senator from Tennessee. Eaton, a bachelor, set up house at a popular Georgetown tavern and became the establishment's top boarder. The reason why he liked the place so much was a certain young lady by the name of Margaret O'Neale Timberlake, better known as "Peggy."

Peggy was the daughter of the tavern owner, O'Neale, and from the descriptions of her, physically, she was more than a bit attractive, and, let's face it, sexy. [In one of the more staid history books I often use as a reference, "The Growth of the American Republic," she is described as a "luscious brunette with a perfect figure."] Reports of the time say that "while still in her teens, (she) had reportedly caused one suicide, one duel, one nearly ruined military career, and one aborted elopement." [Graff] Clearly, everyone was attracted to the "dark-haired vamp" and Senator Eaton was downright infatuated. Only one problem; Peggy was married to John Timberlake, a Navy purser.

Due to her most unsavory reputation at the tavern, Peggy was thought to be sleeping with the boarders, principally Eaton. The Senator then opted to use his influence to make sure that Navy purser Timberlake spent as much time as possible out at sea, doing the Navy thing. For his part, you can imagine that Timberlake was none too pleased when he heard all the rumors about his wife so wouldn't you know, in 1828 he died at sea, either of disease or drink, "although proper Washingtonians preferred to believe that Timberlake had cut his throat because of his wife's unfaithfulness."

The death of Timberlake and the romance between Peggy and Eaton created a big problem for Andrew Jackson. Having won the '28 election, Jackson had planned on naming Eaton his secretary of war, but he insisted that the Senator first marry Peggy in order to shut up Washington's scandalmongers.

So on New Year's Day in 1829, John and Peggy tied the knot and the President-elect assumed all would be well. It wouldn't.

Led by Vice President Calhoun's wife, Floride (now there's a name you don't see parents fighting over anymore), the wives of the Cabinet members shunned Peggy Eaton, refusing to even invite her to their dinners. At formal White House functions, where all were in attendance, Peggy was totally ostracized, with everyone refusing to talk to her except Secretary of State Martin Van Buren and the British ambassador, both bachelors. [Van Buren was a widower.]

Now you're probably thinking, what does this have to do with the administration of President Jackson's duties and his policy initiatives (since we've already dismissed the fact this has zero to do with "Wall Street History")? The answer remains, everything.

Nothing got done that first year. For his part, Jackson had a soft spot for Peggy, going back to the days when he first ran for President and had to face accusations over his wife, Rachel, and charges of bigamy resulting from Rachel's marrying Andrew while supposedly she was legally attached to another man. [Frankly, whether this was true or not isn't part of today's research.] Rachel died in December 1828 and Jackson now took it upon himself to defend Peggy Eaton's honor. "Our society wants purging here," he proclaimed, and so the President proceeded to spend copious amounts of time attempting to find evidence that Peggy was, in his words, "chaste as a virgin."

I mean to tell you, folks, President Jackson hired private investigators to check hotel registers and interview all sorts of people to prove his point. But that didn't change the minds of the wives whose husbands resided in the Cabinet. Needless to say, Jackson was frustrated, confiding to a friend, "I did not come here to make a Cabinet for the Ladies of this place, but for the nation." [Paul Johnson] The whole issue became known as "The Eaton Malaria." It appeared to be incurable.

By Fall 1829, Jackson had concluded that Vice President Calhoun couldn't be trusted and Van Buren, hoping to be the anointed successor, played his hand masterfully in continuing to be a paragon of support for Peggy Eaton.

The whole deal evolved into the "battle of the dinner parties," supplanting all other issues. Floride Calhoun and the older cabinet wives refused to invite Peggy to theirs, while Van Buren held his own soirees with Ms. Eaton in attendance. Jackson threatened to fire any cabinet members who didn't invite Peggy.

What the President soon discovered is that two prominent clergy members in Washington had been adding fuel to the fire ("females with clergymen at their head," said Jackson) and this revelation set up what historian Paul Johnson describes as the "oddest cabinet meeting in U.S. history." Reverend J.M. Campbell, who led the charge that Peggy Eaton was a "whore," was invited and Campbell and Jackson immediately got into a furious discussion over "whether Peggy had had a miscarriage and whether the Eatons had been seen in bed in New York or merely sitting on it." [Johnson]

Finally, Peggy herself had had enough and withdrew from Washington society. When Senator Eaton died in 1856, however, Peggy, now 56, remarried a wealthy Italian dance- master, who promptly took her for all her considerable assets (as left by the senator) and then ran off with Peggy's granddaughter.

But that's not the end of our story. Historically, the whole affair set up Martin Van Buren to be president. With Jackson furious at Vice President Calhoun, Van Buren came up with a solution for the split in the cabinet which was wreaking havoc on the President's ability to accomplish anything of note.

Van Buren offered to resign as secretary of state in April 1831 for the purposes of restoring harmony and, taking his lead, 4 other cabinet members elected to do likewise, including Secretary of War Eaton. Jackson reluctantly agreed, but was ever grateful to Van Buren for his seemingly heroic step for the good of his country. [Jackson was thus able to start over with a new cabinet that was free of the scandal.] The President then used a recess appointment to name Van Buren minister to Great Britain, but that gave Calhoun an excuse to pull a fast one when the nomination formally came to a vote in the Senate. Calhoun maneuvered to have a tie, with the Vice President then casting the deciding vote against in theatric fashion. Calhoun was overheard to say, "It will kill him, sir, kill him dead. (Van Buren) will never kick, sir, never kick." To which Senator Thomas Hart Benton replied, "You have broken a minister, and elected a Vice President." [Graff] Calhoun's strategy backfired, and Van Buren was selected as Jackson's running mate in 1832.

Now tell the truth, as you were reading this, weren't you thinking of today and all the talk of Washington scandal, particularly during the period 1992-2000? Oh, how our nation's history is replete with such episodes. Actually, the scandals and back- stabbing of the current era can't hold a candle to what went on during America's formative years. [We don't duel anymore, for starters.]

Next week we'll examine the presidency of Andrew Jackson and the Bank of the United States episode, which does have more to do with Wall Street history, though it isn't nearly as salacious.

Sources:

"The Growth of the American Republic," Morison, Commager, Leuchtenburg
"The Presidents," Henry Graff, editor; Richard Latner
"American Heritage: The Presidents," Michael Beschloss, editor; Wilson Sullivan
"America: A Narrative History," George Brown Tindall, David E. Shi
"A History of the American People," Paul Johnson

Brian Trumbore