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Bank Recharter Bill
The National Bank charter faced the question of renewal. President Andrew Jackson had always been an avid supporter of states rights, rejected the renewal of the bank. The issue of the bank's constitutionality and where monetary power should lie resurfaced, forming the platforms of the upcoming election. -
Jackson Vetoes
Jackson took advantage of his power as president and vetoed the bank recharter bill. This caught the attention of his supporters but angered many because they thought he was abusing his executive power. -
The Election of 1832
Jackson and Clay ran against each other in a heated election. Jackson focused on getting rid of the national bank, while Clay promised to support it. Once again, the country was divided between opinions. Jackson was reelected by an overwhelming majority, and was free to act on the issue of the bank. -
Jackson's Pet Banks
Pet banks were privately funded state banks where Jackson deposited federal money. Although this hurt the economy and destroyed the national bank, this system of transferring money from federal to state level continued. People learned the importance of finding the balance between strong national and state banks -
Jackson Removed Federal Deposits
Jackson started b taking almost all the money from national reserves and passing it to the state 'pet' banks. He believed that if he got rid of the national bank's money that it would collapse and fail a lot quicker.This plan succeed and the nation bank collapsed at a rate that was leading the country into an economic crisis -
Biddle Response
Nathaniel Biddle, president of the National Bank, started to take actions to recharter the bank. He would speak out against Jackson's cruel behavior and gained many supporters. Congress voted with Biddle to recharter the bank but Jackson vetoed again. Biddle and his supporters claimed he was abusing his power -
Speculative Boom
This is the false notation that money is in great quantity and the economy is growing. With federal money moving closer to their homes in the state banks people thought they were becoming richer. This led to a period of overspending and abuse of money that led to an economic crash of 1837. -
Specie Circular
Also created by Jackson, but carried out by president Van Buren who had taken office. The act required that land be purchased in gold and silver rather than paper money or bank notes. The value of paper money drastically declined and inflation greatly hurt the economy. People especially in the south become angry at Van Buren and not Jackson, but the change in presidency allowed people to see the necessity of a national bank -
The Crash of 1837
The fall of the national bank,inflation, and overspending led to a period of deep economic recession. Prices of American goods fell, businesses went bankrupt, and state banks began to collapse without strong national support
