Jackson & The Bank War
Jackson’s Opposition to the Bank of the United States Jackson’s own bad experience with paper money left him highly suspicious of banks and their practices. Jackson favored financial transactions in specie, or gold and silver coins. Jackson did not believe in credit.
Jackson’s Argument Against the BUS Of the BUS’s deposits: 20% were US Government and 80% were held by private investors. *To Jackson, the BUS was unfairly profiting from the stability of the US Govt’s (the people’s) investment. Jackson was also concerned that the British were large investors in the BUS. Powerful Congressmen & Senators were on the payroll serving as “advisors” to the BUS. * The Bank of the US was simply another front in Jackson’s struggle against privilege. Nicholas Biddle, President of the Bank of the United States ( )
Opening Salvos of the Bank War Allegations are made that the BUS used its money & power to influence the outcome of 1828 elections. Jackson calls for a Congressional investigation. Biddle, advised by Jackson rival Henry Clay, called for an early rechartering of the BUS, which would force Jackson to either give into Biddle or veto the legislation and make it an election year issue. *Jackson issued the first presidential veto based on political, social, and economic reasons and NOT solely on constitutional grounds like his predecessors.
The Bank War and the Election of 1832 The election of 1832 became a referendum on the future of the BUS between Andrew Jackson and Henry Clay. Jackson won by a wide margin and interpreted his victory as a mandate to “kill the bank” – especially after it was discovered that the BUS had financially backed Clay during the election.
Jackson Goes on the Offensive Jackson’s plan to remove federal deposits from the BUS required him to dismiss two Treasury Secretaries before the third, Roger Taney, agreed to divert all government income to state banks, called “Pet Banks” by critics. Jackson & Taney now steered Govt deposits to state banks will continuing to draw upon funds in the BUS for Govt obligations. Biddle retaliated by constricting the money supply to bring on an economic recession. Roger Taney *Jackson masterfully used the economic hardship to prove his point that the BUS was too powerful and too independent. ** The bank quickly lost influence and in 1836 became a private corporation and ultimately closed in 1841.
Jackson Expands the Power of the President Expanded the use of the veto. Jackson became the first president to be the head of the government. Critics called Jackson a tyrant and organized a new opposition party, which they called the Whig Party after the British opposition party that challenged the aristocracy.
Economic Crisis Economic Fallout: State banks fuel rapid, unregulated growth during the last years of Jackson’s presidency created a speculative mania. Alarmed, Jackson sought to head off inflation and issued the Specie Circular, which required that all federal land be purchased with hard currency (gold or silver). The Specie Circular set off a panic as banks suspended specie payments in an effort to remain solvent. Van Buren’s tenure is dogged by financial crisis. His solution is the Independent Treasury System. President Martin Van Buren ( )
Political Parties Whig Party Platform: Strongest support from the North West and New England. Pro-Business Supported Clay’s American System, which were all pro-business. Cool to territorial expansion. (Scattered nation’s wealth & hindered growth). Supported order & stability. Supported progress in technology & social reform. Critical of immigrants. Generally favored more federal control over states’ rights. Democratic Party Platform: Strongest support in the South and on the Frontier. Supporters of the common/working man and small landowners. Strong supporters of westward expansion and easy policies for land. Generally pro-immigrant. Favored states’ rights and limited federal government. Opposed the BUS, tariffs, and federal funding for internal improvements.