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?
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
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