Ch. 7.4 States’ Rights and the National Bank

Section Objectives

1. Explain how the protective tariff laws raised the issue of states’ rights.

2. Summarize how Jackson destroyed the Bank of the United States.

3. Identify some of Jackson’s economic policies and their impact on his successor.

One American’s Story• Daniel Webster- A senate leader from Massachusetts.

• The issue of tariffs would cause controversy over state and federal authority.

1. A Tariff Raises the States’ Rights Issue• Congress increased the Tariff of 1816 to combat inexpensive British goods.

A. The Nullification Theory• John C. Calhoun- Jackson’s vice- president, believed in states’ rights

• Tariff of Abominations- Calhoun’s name for an 1828 tariff increase that seemed to Southerners to be enriching the North at their expense.

• This tariff hit South Carolina hard.

• Calhoun devised the nullification theory.

• He believed each state had the right to nullify, or reject, a federal law it considered unconstitutional.

Tariff of Abominations

B. Hayne and Webster Debate States’ Rights• Robert Hayne- South Carolina Senator (states’ rights)

• Daniel Webster- Mass. Senator (federal government)

• Both men debated states’ rights

C. South Carolina Rebels

• S.C. declared the tariffs of 1828 and 1832 null, and void.

• Jackson persuaded Congress to pass the Force Bill.

• This allowed the federal government to use the army and navy against South Carolina.

Debate

http://movieclips.com/2gfPm-old-school-movie-thats-the-way-you-debate/

• Henry Clay stepped in and the issue was resolved.

2. Jackson Attacks the National Bank• Bank of the United States- (BUS) National bank funded by the federal government and private investors.

• In 1832Jackson vetoed the bill to recharter the bank.

A. Jackson Opposes the Bank• Jackson portrayed the bank as a tool for the wealthy.

• A privileged few were making money off the bank instead of American taxpayers.

• Nicholas Biddle gave loans at lower interest rates to congressman.

B. Pet Banks• State banks that had government funds put in them.

• This caused Biddle to demand loans be paid.• He lost support and the BUS would eventually go out of business.

Second Bank of the United States

C. Whig Party Forms• Whig Party- The political party formed in 1834 to oppose the policies of Andrew Jackson.• Henry Clay, John Quincy Adams, and Daniel Webster.

• They believed in the protective tariff and a federal banking system.

3. Van Buren Deals with Jackson’s Legacy• Martin Van Buren- Won the election of 1836.

A. Jackson’s Legacy• Pet Banks were printing bank notes that weren’t backed by gold or silver.

• Banks stopped accepting paper currency.

• Panic of 1837- When banks closed and the credit system collapsed, this resulted in many bankruptcies and high unemployment.

Panic of 1837

B. Harrison and Tyler• William Henry Harrison- Whig Candidate that defeated Martin Van Buren in the election of 1840.

• He died of pneumonia a month into his presidency.

• John Tyler- “His Accidency” was the vice-president that took over when Harrison died.

• He portrayed himself as a war hero and man of the people.