Transcript Jackson`s War on the Bank Notes

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 a way
to uniform the currency
 Chartered in 1816
 Given a 20 year charter
 Private bank/NOT PUBLIC

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) $
• Supreme Court ruled it constitutional
• Smaller banks caused inflation, but Biddle worked to
regulate them
– Issued too many loans & notes (paper bill that could be cashed
in for gold)
• Jackson had the bank investigated for fraud &
corruption
– Felt many officials were using it for personal gain
– Felt its lending policies favored the wealthy & hurt avg. people
– Believed hard currency was the only safe form
– “Influenced the elections 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

Nation prospered under
Jackson

Whig Party formed as
opponents to Jackson (“King
Andrew I”)

Jackson’s V.P. easily won the
Election of 1836
◦ Martin Van Buren
◦ Main opponent is former military
general William Henry Harrison

Within months people feared for
the economy
◦ Panic of 1837

People exchanged paper
money for gold or silver
Depression and Change

Banks could not keep
up & most went into
default
◦ It led to a depression

Some like Clay &
Webster believed the
gov’t should help
◦ Van Buren believed the
economy would improve
on its own

Van Buren blamed
for the Panic

Election of 1840
Whigs again chose military hero
William Henry Harrison
◦ 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”
 Used the log cabin
◦ Similar to Andrew Jackson
◦ Van Buren blamed for the depression
◦ Harrison has a decisive Presidential victory

Harrison’s long speech in the bitter
cold led to his death one month after
inauguration
◦ First time a president died in office
◦ Vice-President Tyler became president