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1832 Bank Recharter Bill
Daniel Webster and Henry Clay created a bill to renew the Bank of the United States charter. Clay's goal was to make the bill an election issue for the upcoming election. In Clay's mind, if Jackson was to sign the bill then Jacksons western followers would be alienated and if Jackson vetoed the bill, Jackson would lose the election by alienating the rich and influential groups in the east. -
Jackson's Veto
Jackson vetoed the bill claiming the monopolistic bank to be unconstitutional. Even though McCullough vs Maryland showed the bank was constitutional, Jackson usurped the Supreme court in his decision. -
Election of 1832
In the election of 1832, Andrew Jackson retained office defeating Henry Clay. Clay and his national Republicans had the advantage in funds, but Jackson remained the president of the commoner and he won the West and the South while also winning some in Pennsylvania and New York. -
Jackson Removes Federal Deposits
Jackson feared that Biddle might manipulate the bank to force its recharter. Therefore, Jackson decided to bury the bank for good by removing federal deposits. -
Biddle Response
In response Biddle desperately tried to prove the banks importance by calling in bank loans to create a financial crisis. The death of the bank left a financial vacuum in the American economy. -
Jackson's Pet Banks
After the Bank of the United States was dismantles by Jackson, there needed to be somewhere to store surplus federal funds. These were placed in 'pet banks" which were chosen due to their pro-Jackson ideologies. With no central bank in control, these pet banks flooded the country with paper money. -
Specie Circular
A decree that required all public lands to be bought with hard money. This decree was an attempt by Jackson to control the runaway economy which was failing due to unreliable currency from the banks. -
Speculative Boom
Jackson putting money into the pet banks caused a speculative boom. People expected the economy to grow or "boom" which caused an inflation. -
Crash of 1837
The drastic change of the decree caused financial panic which led to the crash in 1837. Speculative lending practices in western states, a sharp decline in cotton prices, a collapsing land bubble, international specie flows, and restrictive lending policies in Great Britain were all to blame.
