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1832 Bank Recharter Bill
Daniel Webster and Henry Clay presented Congress with a bill to renew the charter of the Bank of the U.S, even though it was not due to be renewed for 4 more years. They did this knowing that ether way Jackson would loose votes in the upcoming election. If he did not veto the bill he would loose the northern, wealthy peoples vote, but if he did veto it he would loose southern voters. -
Jackson's Veto
Jackson did not hate all banks, just monopolistic ones. He also did not like the B.U.S because it only accepted gold and silver and did not offer paper money. The bill went through Congress with ease, but came to a screeching halt when it got to Jackson, who immediately voted it. He argued that it was unconstitutional, despite the Supreme Court case McCullough vs. Maryland which argued it was. This decision made the Northerners not only hate, but fear Jackson. -
Election of 1832
Clay forgot that the majority of America was poor farmers, and Jackson won by a landslide, 219 to 49. This election was the first to have a third party nominee, an Anti-Masonic party. -
Biddle's Response
Biddle was desperate to try and save his precious bank, so he called in loans, hoping it would led to a small financial crisis that prove how essential the B.U.S actually was. The Whigs supported Biddle because he wanted to save the B.U.S, but the Democrats, who wanted to see the central bank fall, did not. -
Jackson's Pet Banks
Jackson put all government funds in smaller "pet banks" that were not prepared to handle that much money. Since there was no central bank to regulate the smaller ones there was an influx of paper money, which raised the debt and decreased the value of the money. The Democrats were for this because the south liked paper money because it made it easier to pay debts, but the Whigs did not like it because it created problems that increased the debt. -
Speculative Boom
The death of the Bank of the U.S left an enormous financial gap in the economy. This kicked off cycles of growth and downfall. The Federal funds were put in pet banks giving many smaller banks more power they were not equipped to handle. Without a central bank the smaller "wild cat" banks began to flood the economy with paper money. The Whigs were not a fan of this because they supported a strong central bank unlike, the Democrats who were in favor of smaller "pet banks" and paper money. -
Jackson's Removal of Federal Deposits
Even though Jackson vetoed the charter the B.U.S was still not to expire for 4 more years. so he would kill the bank once and for all. He did this by depositing no more funds in the bank and slowly shrinking existing deposits by using them to pay for everyday government expenses. This angered the Whigs because they like the B.U.S unlike, the Democrats that did not. -
Species Circular
The "wild cats" money because so unreliable, especially in the West, that Jackson ordered the Species Circular. This was a decree that required people to pay for land with gold or sliver. This stopped the Speculative Boom in its tracks and led to the Crash of 1837. This was bad news to the southern Democrats because they largely depended on paper money, unlike the wealthy Whigs. -
Crash of 1837
When Biddle called in the loans it led to people being unable to repay them, and their homes and farms were foreclosed. The Species Circular also caused the Crash, unable to use their paper money to buy land it became pretty much worthless, and people started to panic. This did not really affect the wealthy Whigs, but it overwhelmed the Democrats with debt and foreclosure.
