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1832 Bank Recharter Bill
Though the charter didn't end until 1836, Clay and Webster attempted to recharter the Second Bank of the United States in 1832 to make it an election issue, hopefully ruining Jackson if he vetoed the bill.
Democrats, who largely felt the bank favored the elitist North, hated the bank and this bill.
Nationalistic Republicans, with their substantial northern support base and support of the American System were in favor of this bill, believing it would keep the US economy stable and growing. -
Jackson's Veto
As Clay had engineered, Jackson vetoed the bill, believing the privately owned bank had too much power over national financial affairs.
Democrats loved Jackson's veto, since it was meant to lessen the support of the elite over the common man; this veto would actually increase Jackson's popularity.
Nationalistic Republicans felt that Jackson was ruining the US economy, since the lack of a national currency would cause an economic depression. -
Election of 1832
Contrary to the intended effect of the veto, Jackson's popularity soared, soundly winning the election over Clay in both the electoral and popular votes.
Democrats were successful in keeping the executive branch, and were rightfully proud and happy.
Nationalistic Republics, along with feeling defeated, were also fearful due to Jackson's promise of dismantling the BUS. -
Speculative Boom
Due to the recent Indian Removal, speculators began buying land five times more than before using the depreciating paper money issued by wildcat and state banks.
Democrats saw this as a positive effect of the removal of the BUS, since poorer people could secure loans to buy from this abundance of land and hopefully become wealthier.
Nationalistic Republicans felt this excessive purchasing due to the inflation of paper money would indeed lead to the economic depression they feared. -
Jackson Removes Federal Deposits
Jackson, in an attempt to permanently disrupt the BUS, removed all federal deposits from the bank, meaning the national notes were not backed up by federal money and loss value.
Democrats saw the dismantling of the BUS as a steps towards a government that helps the common man rather than the elitist group.
Nationalistic Republicans foresaw the American economy crumbling without a national bank and worried about how they would preserve the economy. -
Biddle's Response
In an attempt to demonstrate the bank's importance, Biddle tried to create a minor economic panic by calling in his bank's loans; Jackson, however, still didn't give in, and anti-BUS sentiment rose.
Democrats saw this resolve of Jackson's to be an example of his commitment to the commons and fully supported him.
Nationalistic Republics saw the death of the BUS as inevitable, and with it the the fall of the US economy. -
Jackson's Pet Banks
Jackson gave select banks additional government support after the fall of the BUS to fill in the void left by the national bank.
Democrats loved this, since the pet banks gave out more loans to commoners than the BUS did, making it seem like the banks favored the middle and lower classes.
Nationalistic Republicans continued to fight against Jackson in Congress, believing only a national bank would keep the economy stable. -
Specie Circular
Due to the Speculative Boom and the depreciating paper money, Jackson passed the Specie Circular, requiring land be bought with hard, metal money rather than easily printed paper money.
Democrats didn't like this, since it made it harder to obtain a loan now that banks had to get and then give the hard money.
Nationalistic Republicans saw this as too late of an attempt to stop the market crash with the abundance of paper money that had been printed. -
Crash of 1837
With the fall of the BUS, the inflation of paper money, the Speculative Boom based on the paper money, and the Specie Circular limited land purchases to be made only by hard money, the economy crashed, the worst economic depression the nation had seen at that point.
Both Democrats and Nationalistic Republicans were hit hard by this crash, and it made the Republicans even more determined to recharter the BUS to try and stabilize the economy.
