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Bank Recharter Bill
Henry Clay, Daniel Webster, and other Jackson opponents in Congress passed a bill rechartering the Second Bank of the United States even though the charter was not due to expire for four more years. . The bank’s charter was not due to expire until 1836, but Clay and Webster wanted to force Jackson to take a clear pro-bank or anti-bank position. -
The Election of 1832
In this elections, Jackson won easily over Henry Clay, thanks in part to him choosing to veto the Bank Charter. Jackson's running mate was Martin Van Buren, and after he was elected, he went even further to close the National Banks. -
Jackson's veto of Bank Recharter Bill
Jackson vetoed the Bank Recharter Bill and said condemned the bank as a privileged monopoly created to make rich men richer by the act of congress. He declared the bank was unauthorized by the Constitution, subversive of the rights of the states, and dangerous to the rights of the people. -
Nicholas Biddle Response
Nicholas Biddle was the president of the Bank and he responded to Jackson's actions by presenting state bank notes of redemption, calling in loans, and generally contracting credit. He thought a financial crisis would dramatize the need for a central bank, ensuring support for charter renewal in 1836. -
Jackson Removed Federal Deposits
Jackson ordered his treasury secretary to divert federal revenues from the bank of the United States to selected state banks which came to be known as pet banks. The secretary of the Treasury and his assistant resigned rather than carry out the president’s order. It was only after Jackson appointed a second secretary that his order was implemented. -
Jackson's Pet Banks
In attempt to get rid of the national banks, Jackson introduced 7 "pet banks". These were state banks that received federal deposits. Most of them didn't make money and failed in their investments. -
Speculative Boom of 1833
Land sales, canal construction, cotton production, and manufacturing boomed following Jackson’s decision to divert federal funds from the Bank. This made people think that they were becoming richer. This led to a period of overspending and abuse of money. -
Specie Circular of 1836
Jackson created an act that required land be purchased in gold and silver rather than paper money or bank notes. This forced many Americans to exchange paper bills for gold and silver. Many private banks lacked sufficient reserves of hard currency and were forced to close their doors, triggering a financial crisis. -
Panic of 1837
It wasn’t until Jackson’s successor, Martin Van Buren came into office when a deep financial depression struck the nation. Prices of goods began to fell, unemployment went up, wages went down. It wasn’t until the mid-1840s when the country was fully pulled out of the depression.