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1832 Bank Recharter Bill
Daniel Webster and Henry Clay began pushing for the National Bank to be renewed. They bank was supposed to be rechartered in 1836 but Clay wanted it to happen now to help when the upcoming election. Clay new President Jackson with the support of the south would veto the bank thinking it is unconstitutional. The north however, supported the Bank. If Jackson vetoed it the north would possibly become angry with Jackson and not vote for him for reelection.This would better Clay's chances of winning. -
Jackson's Veto
Shortly after proposing the rechartering on the Bank, Congress approved it. Like Clay expected, Jackson immediately vetoed it. Jackson stated that the Bank was against the Constitution even though the Supreme Court stated it was. This showed that Jackson believed he had power over the Supreme Court.His strict power led to the creation of the Whig Party. The Whigs opposed a strong executive power like Jackson. The Democrats supported Jackson's veto because it kept from an unconstitutional bank. -
Election of 1832
This election occurred after the vetoing of the Bank. This became a common discussion during the election.Clay and Jackson were in close running for President. Because of their disputes a third party called the anti-masonic party formed. Jackson was a mason so this party hurt him some. But because people were divided between Clay and the Anti-Masonic Party, Jackson won the election. The Democrats still supported Jackson and his viewpoints against an unconstitutional bank. -
Jackson Removes Federal Deposits
When Jackson won the reelection he was determined to destroy the Biddle's Bank completely. Jackson began removing federal deposits from the bank, no longer put money in the bank, and slowly shrinking deposits. This caused the bank to "run dry". The Democrats supported this because of their hatred for the bank. The Whigs/northerners were against this because it was killing the bank that supported their industry, and because Jackson was controlling the government's money, which was too much power. -
Biddle's Response
After Jackson's strike against the Bank, Biddle wanted to prove its importance and hopefully recharter it. He created a minor crisis called Biddle's Panic. He wanted to regain the people's need for the Bank and gain more deposits. Jackson's didn't change his mind and let the panic hurt the bank. The Democrats were against this panic and glad it failed because it would lead to the complete fall of the bank. The Whigs supported Biddle's attempt to restore the bank because they too see the value. -
Jackson's Pet Banks
As Jackson began to remove money from the National Bank, he needed to put his money in smaller banks.State banks that were in support of Jackson gained his money. This helped increase wealth in the smaller banks, and led to the printing of more money. This printing of money led to inflation.The Whigs were angered by Jackson putting his his money in smaller banks and the inflation hurting the economy. The Democrats were happy because it hurt the banks and their banks that supported Jackson grew. -
Speculative Boom
After Jackson put money in the pet banks and there was an increase in paper money production, Americans believed the economy was improving because of more cash. This led to them spending more money and then printing more money. As a result money began to have less value. People were in favor of having more money but soon began realizing that paper money had no value and would cause debt. -
Specie Circular
Jackson wrote a document called Specie Circular to help solve the overuse of paper money. This decree required for a metallic coin money to be used for major purchases such as buying land. This helped fix the problems and damage in the economy from the paper money and pet banks. The Democrats were in support of Jackson because he was trying to help the economy. But the Whigs and those who favored the paper money opposed this because it was a very dramatic change. Constant change caused crisis. -
Crash of 1837
The Crash of 1837 occurred because of all the built up problems from the pet banks, lack of national bank, and inflation of money. Also there was lack of crop production. This problem was thrown at President Van Buren after taking office. The American people were against this crash and there was a stronger resentment for the Democratic party. The Whigs strongly opposed the new president and blamed him for the crash.
