Andrew Jackson

The Bank War

Read the brief explanation of the bank War and answer the question below.

1. Based on the quote, what can you infer about Jackson’s attitude toward the BUS?

2. What are Jackson's stated reasons to oppose rechartering of the BUS?

3. Dig Deeper and Read between the lines: What is his real reason to oppose the BUS?

The Antagonists:Nicholas Biddle and Andrew Jackson

Biddle and Clay

1. The Bank of the United States

Under Private Control, but Chartered by the Federal Government.

Storehouse for public funds and didn’t pay interest

Didn’t pay state taxesCould issue bank notes

What the BUS did….

Bank paid the Federal Government a bonus of 1.5 Million Dollars

Payments made and government money transferred without charge

Government appointed 5 of the 25 directors What is significant about this What is significant about this information? information?

5. Killing the Bank

Following the election, Jackson moves federal funds into “pet banks”“pet banks”

State Banks friendly to Jackson

Jackson fires two Treasurers before one does his bidding, Roger B. Taney.

2. Why Jackson Hates the BUS

Jackson thought the Bank’s branches advocated the election of John Quincy Adams in 1828

Jackson felt the Bank held too much power

Jackson viewed the BUS as unconstitutional

Continued Opposition

Jackson thought the Bank benefited rich investors, many foreign

Jackson felt a privileged few should not control the nation’s money

Jackson viewed the battle as the common man versus the aristocracy

3. Biddle Moves to Recharter

In an election year, 1832, Biddle applied for recharter of the bank 4 years early.

Urged by Clay and WebsterThe election 1832 becomes a

referendum on the Bank"The Bank is trying to kill me, Sir, but I

shall kill it!" Jackson to his VP Van Buren

Henry Clay has ulterior motives

Clay sees the Bank as way to defeat Jackson for President

Renew the BUS Jackson loses votes in South and West

Veto the Bank Bill loses votes in NorthJackson easily wins re-election

4. Jackson’s Veto Message

It concentrated the nation's financial strength in a single institution.

It exposed the government to control by foreign interests.

It served mainly to make the rich richer. It exercised too much control over members of

Congress. It favored northeastern states over southern

and western states.

Impact of Bank Veto

State Banks issue paper money beyond their ability to back it up with gold reserves

State banks in West and South ease loan requirements and many borrow to speculate in land

Economic downturn in EnglandPrice of Cotton drops 25%

Continued

Transfers of federal money away from eastern banks meant they had less money to lend.

Banks raise interest ratesLong term, economy falters.Land prices increase, but so does

everything else.

Species Circular: Issued by Jackson

Treasury could only accept gold or silver for land purchases

All of it taken together leads to Panic of 1837 and Van Buren gets the blame.

Jackson’s Use of the Veto

1st 6 Presidents vetoed 10 Bills.Jackson vetoed 127/12 vetoes were pocket vetoes:

Congress adjourned so could not override.

1st president to veto bills for political reasons.

Everyone Loses

Few had hard currency to buy land Prices fall Banks fail Economic Crisis in England made the problem

worse Panic of 1837: hunger, unemployment, riots. BUS went out of business when its charter ran

out

Jackson is Censured

The U.S. Senate censured Jackson on March 28, 1834, for his action in removing U.S. funds from the Bank of the United States.

When the Jacksonians had a majority in the Senate, the censure was expunged.