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Second bank chartered
The Second Bank received its charter nearly two decades following the establishment of the First Bank. Banks in general, were to serve as a repository for government funds, provide short-term loans to the government, and regulate the national currency. However, the newer territories held a grudge against this bank as it held a virtual monopoly over the nation's credit and currency, primarily benefiting the wealthy class. -
Panic of 1819
The Panic of 1819 had a profound impact on the economy, causing significant hardships for numerous individuals. Many people found themselves unemployed, while the costs of agricultural goods sharply declined and banks faced instability. A prominent view held by many was that the Bank, which served as the economic hub of the United States, was the root cause of this crisis. Consequently, a strong opposition against the Bank emerged. -
Jackson's Veto
In July 1832, Henry Clay, Daniel Webster, and others who opposed Andrew Jackson's presidency passed a bill to restore the National Bank of the US. However, Jackson veto to reject the bill. The bank's original charter was set to expire in 1836, but Jackson vetoed the bill anyway. Argued that the bill was "unauthorized by the Constitution" and undermined state rights. In the end, Jackson won with a 219 to 14 electoral vote against Clay. -
The Election of 1832
Andrew Jackson and Henry Clay were opponents in the election. Jackson aimed to abolish the Second National Bank, while Clay supported its continuation. The election was divisive, similar to the ones in 1824 and 1826. However, Jackson won by a large margin (219-49) with Martin Van Buren as his vice president. As president, Jackson would have the power to veto any attempts to reestablish the bank. -
Pet Banks
Jackson directed the Secretary of Treasury to transfer government revenue and distribute it among seven state banks with the intention of eliminating the National Bank. These state banks became known as pet banks. Regrettably, the Senate did not carry out Jackson's directive, resulting in the Senate declaring his action as unconstitutional. -
Nicholas Biddle's Response
Biddle was angry with Jackson for vetoing the recharter bill and withdrawing federal funding from the bank. Payback, Biddle instructed the bank to reduce the # of loans, leading to an economic slowdown in 1834 in an attempt to force Jackson to change his mind. Biddle began demanding loans and credit payments, while placing the blame on Jackson for any financial hardships. Further enraged Jackson, as Biddle misused his authority and harmed numerous innocent individuals in his quest for victory. -
Jacksons Removal of Federal Funding
Jackson removed all of the federal funding for the Second Bank and instead gave them to the state banks, also known as "Pet Banks." He also claimed that the bank would not be receiving deposits after 1 October 1833. This removal caused the bank to fail and an economic crisis. -
The Whig Party
Henry Clay, John C. Calhoun, and Daniel Webster founded the Whig Party due to their opposition to Jackson's policies and concerns about his abuse of power regarding the National Bank. John Tyler later joined the Whigs, despite his disagreement on the national bank, as he believed Jackson was overstepping his authority and infringing on state rights. Some Whigs accused Jackson of behaving like a monarch. -
Jackson's Specie Circular
Government-owned land must be purchased using gold or silver as a means to deter reckless land speculation in the western territories and limit the expansion of paper currency. As a consequence, private banks faced challenges as their reserves of precious metals dwindled, leading to the closure of many of these institutions. ratio15:1 -
Panic of 1837
In the Panic of 1837, our country faced a financial crisis that led to high unemployment and inflation. The state's debt increased, making it harder to recover. Prices of goods dropped, making things even worse. President Van Buren was blamed for the crisis and proposed withholding government funds to fix it. But the Whigs, especially Henry Clay, strongly opposed this idea. -
Election of 1840
William Henry Harrison, a Whig candidate, faced Martin Van Buren in the presidential election. Buren convinced Congress to establish an unconventional treasury system. Harrison won more electoral votes from the electoral college, resulting in his victory over Buren. This was the first of two wins for Whig candidates.