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1832 Bank Recharter Bill
In the time before the election of 1832, Daniel Webster and Henry Clay were working to gain support for Clay's campaign. In 1832 Clay proposed the national bank be rechartered four years early, knowing that Jackson would reject the recharter. The north supported the idea of a central bank, while the south reject the idea of more power going to the national government. Clay used this geographical division to his advantage and ensure his presidency. -
Jackson's Veto
As predicted, Jackson ignored the Supreme Court ruling in McColluch vs. Maryland and vetoed the recharter, deeming the bank unconstitutional. This veto was a show of power, symbolizing the executive branch had more power than both the judicial and legislative branches. The north was outraged at the veto, claiming a national bank was necessary for the economy. The south supported the veto because they never supported it in the first place. -
Election of 1832
The election of 1832 was between Henry Clay, Andrew Jackson, and the new Anti-Masonic party. The Anti-Masonic party opposed the Masonic order, causing them to be an Anti-Jacksonian party because he was a Mason. The party, along with the use of conventions to promote candidates, created many firsts for this election. Clay's attempts to denounce Jackson were effective, but not successful. The Whigs supported Clay and the Democrats supported Jackson, and Jackson was reelected. -
Biddle's Respose
In Biddle's panic, he attempted to show the importance of a national bank. He called in bank loans and tried to get people to come back to the bank. Despite his efforts, Jackson crushed his attempts with the removal of the federal deposits, and successfully destroyed the national bank. The south supported the obliteration of the national bank, because they never supported the idea of a national bank. The North was very mad, knowing that the national bank was officially ending. -
Jackson's Pet Banks
The absence of the National Bank was replaced by several of Jackson's Pet Banks. These banks increased the production of paper money; decreasing the value of money and putting America into more debt. This debt further increased because the central government had no power to regulate the production now that Bibbles bank was denounced. The Democrats supported the creation of pet banks because of their success under Jackson's power. The Whigs didn't support them because of the inflation they caused -
Speculative Boom*
After the creation of Pet Bank's and the placement of paper money in these smaller banks, it created a period of false hope for Americans. It was a notion that the economy was growing and people could spend a ton of money with little no consequences. People thought this because of the increase in the creation of paper money, and led to overspending and the abuse of money, that did not actually have value. -
Jackson Removes Federal Deposits
Despite the National Banks inevitable death, Jackson wanted to destroy it and ensure that it wouldn't be able to be rechartered. Jackson ruled that no funds be deposited and existing deposits be diminished to nothing. This denied people the use of the bank, forcing people to use their state banks and new banks to form. Jackson's decision was controversial, and possibly unconstitutional. The South supports his decision, and the North rejects his idea, because they want to keep the national bank. -
Specie Circular
Following the Speculative Boom, people depended solely on paper money, and it began hurting the economy. Jackson issued the Specie Circular, requiring all land to be paid for in metallic money. This is ended the dependency on paper money, in hopes to turn the economy around. The Democrats supported his decision in trying to improve the economy. The Whigs, while wanting the economy to improve, did not like how drastic he was making these decrees, devaluing their money. -
Crash of 1837
The crash was a product of the veto of the national bank and the issues that followed. People were buying and selling land and merchandise with devalued, useless paper money. This dependency resulted in a mass crash and inflation. Farmer's crops were failing, increasing the prices for raw materials nation wide. American banks failed, and public land sells decreased. Americans were distraught with the economy failing, no party supporting the crash.
