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Charter of the 2nd Bank
The charter of the Second Bank of the United States was established in 1816 with the passage of the "Second Bank of the United States" act, signed into law by President James Madison. This charter laid out the structure, purpose, and operations of the Second Bank. Its primary purpose was to regulate the country's money supply and provide a stable national currency. The bank was headquartered in Philadelphia and had branches throughout the nation. -
Panic of 1819
The Panic of 1819 was the United States' first major financial crisis, marked by a economic downturn. It was primarily triggered by a bursting bubble in land prices following the War of 1812, causing foreclosures and bankruptcies. Additionally, there was a contraction of credit, bank failures, and rising unemployment rates during this period. The panic exposed weaknesses in the country's banking system and contributed to a prolonged period of economic hardship, which lasted for several years. -
Biddle's Response
The president of the National Bank, Nathanial Biddle initiated efforts to secure a recharter for the bank. He publicly criticized President Jackson's aggressive measures and successfully gathered a significant following of supporters. Although Congress passed a bill to recharter the bank, Jackson once more employed his veto power to block it. Biddle and his allies contended that Jackson was overstepping his executive authority and abusing his powers. Jackson continued to veto Biddle's attempts. -
Election of 1832
The election of 1832 was heavily influenced by the Bank Wars, as President Andrew Jackson's veto of the recharter of the Second Bank of the United States was a central issue, leading to Jackson's victory and the eventual demise of the bank. -
Jacksons Veto
Jackson believed that the Second Bank of the United States, which had a 20-year charter that was set to expire in 1836, had too much power and was controlled by wealthy elites. He vetoed the bill to renew the bank's charter on the grounds that it was unconstitutional and not in the best interests of the common people. Jackson argued that the bank was a monopoly that benefited the wealthy at the expense of commoners, and he believed it violated the principles of economic freedom. -
The Whig Party
The Whig Party formed in the 1830s in opposition to President Andrew Jackson and his Democratic Party. The Whigs advocated for a stronger federal government, a national bank, protective tariffs, and infrastructure development. The Whig party wanted to establish a new national bank after the demise of the Second Bank of the United States. Whigs believed that a national bank was essential for economic stability, a uniform currency, and providing credit for economic growth. -
Pet Banks
Andrew Jackson's "pet banks" were a group of state-chartered banks that he favored and deposited federal funds into after removing funds from the Second Bank of the United States. These banks were chosen for their loyalty to Jackson's administration and his policies, and they played a significant role in the transition away from the Second Bank's influence in the American financial system. -
Specie Circular
The Specie Circular mandated that only gold or silver coins, also known as "specie," could be used for the purchase of government land, effectively ending the practice of accepting paper banknotes for land transactions. This policy aimed to stop land speculation and stabilize the economy by requiring hard currency for land purchases, but it contributed to the Panic of 1837 by exacerbating credit shortages and causing financial distress. -
Panic of 1837
Similar to the panic of 1819, the Panic of 1837 was a severe financial crisis in the United States characterized by bank failures, a collapse of credit, plummeting property values, and widespread economic hardship, largely caused by a combination of factors including the impact of Jackson's policies and global economic conditions. -
Election of 1840
The election of 1840 featured a significant debate over the reestablishment of a national bank. The Second Bank of the United States had ceased to exist in 1836 after President Andrew Jackson vetoed its recharter, and the country was divided over whether to create another national bank.