Transcript Andrew Jackson

War on the Bank
What was the 1st National
Bank?
 Chartered by the Dept. of
the Treasury

Became First National
Bank of U.S. in 1791

Private bank that met
financial needs of federal
govt.

Main purpose
◦ Pay off the huge war debt

Charter expired in 1811

Seen by James Madison as a
way to uniform the
currency
 Chartered in 1816
 Given a 20 year charter

U.S. was unable to finance
country after the War of 1812

Private business invested
money into the bank and it
loaned money out

Federal government
deposited funds into it

Bank set policies that
controlled nation’s
economy
Political Alliances

Bank president Nicholas
Biddle pushed the bank
for early renewal
◦ Sought an ally in presidential
candidate Henry Clay

Henry Clay intended to
use it in the 1832
election against Jackson

Hoped to ruin Jackson
if the renewal bill was
vetoed

Bill for renewal came to Jackson on July
4, 1832
◦ Jackson was sick in bed

Jackson vetoed the bill that would
give the bank a new charter
◦ “The bank, Mr.Van Buren, is trying to kill me. But
I will kill it!”

Jackson pulled govt. funds
◦ Deposited the money in state banks
 Opponents called them “pet banks”
“Soft”
(paper) $
BANK
“Hard”
(specie) $
• The Supreme Court had ruled it was constitutional
• Bank caused inflation
– Issued too many loans & notes (paper bill that could be cashed
in for money)
• Jackson had it investigated for fraud & corruption
–
–
–
–
Felt many officials were using it for personal gain
Felt its lending policies favored the wealthy and hurt avg. people
He felt coin was the only safe currency
“influenced the elections of the public officers by means of its
money”
President Jackson's Veto
Message Regarding the Bank of the United States; July
10, 1832
The bill " to modify and continue " the act entitled "An act to incorporate
the subscribers to the Bank of the United States " was presented to me
on the 4th July instant. Having considered it with that solemn regard to
the principles of the Constitution which the day was calculated to inspire,
and come to the conclusion that it ought not to become a law, I herewith
return it to the Senate, in which it originated, with my objections.
A bank of the United States is in many respects convenient for the
Government and useful to the people. Entertaining this opinion, and
deeply impressed with the belief that some of the powers and privileges
possessed by the existing bank are unauthorized by the Constitution,
subversive of the rights of the States, and dangerous to the liberties of
the people, I felt it my duty at an early period of my Administration to call
the attention of Congress to the practicability of organizing an institution
combining all its advantages and obviating these objections. I sincerely
regret that in the act before me I can perceive none of those
modifications of the bank charter which are necessary, in my opinion, to
make it compatible with justice, with sound policy, or with the Constitution
of our country.
Era of Van Buren

The nation prospered
under Jackson

Jackson’s V.P. won the
next election
◦ Martin Van Buren

Within months people
feared for the economy
◦ Panic of 1837

People exchanged their
paper money for gold
or silver
Depression and Change

Banks could not keep
up and most
defaulted
◦ It led to a depression

Clay and Webster
argued the govt should
help
◦ Van Buren believed the
economy would
improve on its own

Van Buren is blamed
for the Panic

Whig Party forms of
the opponents to “King
Andrew I”
Election of 1840

Whigs chose military hero William Henry
Harrison
◦ Chose Virginian John Tyler as V.P., a former Democrat

Made the most of his nickname “Old Tippecanoe”
◦ Whig campaign slogan – “Tippecanoe & Tyler too!”

Whigs appealed to common people
◦ Like Andrew Jackson
◦ This, plus Van Buren being blamed for the depression, led
to a decisive victory

Harrison’s speech in the bitter cold led to his death
one month after inauguration
◦ First time a president had died while in office
◦ Vice-President Tyler became president