1. CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

2. -In 1816, Madison allowed the 2 nd National Bank to be created -The 2 nd National Bank had several tasks: 1. Hold the federal governments money 2. Extend credit (control lending) 3. Determined money state banks received -This powerful institution was hated by farmers and merchants, however supported by wealthy elites -Nicholas Biddle was the President of the bank -In 1832 Biddle asked for the banks charter to be renewed Page 1 The National Bank CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

3. -Jackson and Biddle quarrel over the Bank -Henry Clay, presidential candidate and Speaker of the House in 1832, pushed the banks charter through congress -Jackson had to decide to sign or veto the bill -If Jackson signed it, he lost support from the South & West -If Jackson vetoed it, he lost support from the North & East -He vetoed it, leaving the 2 nd National Bank with a charter lasting only until 1836 -Jackson won a sweeping victory in the presidential election Page 2 Jackson vs. the National Bank CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

4. Page 3 Election Results for 1832 CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

5. -Jackson had Treasury Secretary Roger Taney place federal funds in designated state banks -These banks became known as Pet Banks -To spite Jackson, Biddle began limiting the flow of money to state banks -Paper money quickly became scarce because state banks were not lending -The 2 nd National Bank went out of business in 1836 because… 1. No federal funds coming in 2. No money to loan and make interest off 3. Its charter expired Page 4 The Nations Money CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

6. -Vice President Martin Van Buren won the presidency easily due to Jacksons fame Page 5 Economic Crisis CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

7. Page 6 Election Results for 1836 CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

8. -Vice President Martin Van Buren won the presidency easily due to Jacksons fame -With the bank charter expiring, state and local banks were free of federal influence -Banks began to loan more freely, printing more money not backed by specie -When western land speculation erupted, Jackson issued the Specie Circular, demanding land be purchased with specie -Most speculators (and banks) did not have enough specie to keep up with land prices -Land values dropped, citizens/speculators could not afford to pay of loans and the bank took over many properties Page 5 Economic Crisis CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House

9. Page 7 Economic Crisis Explained CHAPTER #13 The Age of Jackson SECTION #2 A New Spirit in the White House No National Bank No money loaned to state banks State banks short on money to loan No money loaned to local banks State & local banks print their own money Loan to speculators Speculators buy large amounts of land Supply & demand, land prices go up Prospect of profits, more land is purchased High land prices, too much paper money Jackson issues Specie Circular Not enough gold No land purchase, prices drop No money being made on speculation Farmers, merchants & speculators cannot pay back loans Land taken from citizens & speculators State & local banks lose money Banks must sell land at lower price to recover their losses State & local banks begin to fail Less banks, less loans, less economic growth No National Bank No money loaned to state banks State banks short on money to loan No money loaned to local banks State & local banks print their own money Loan to speculators Speculators buy large amounts of land Supply & demand, land prices go up High land prices, too much paper money Jackson issues Specie Circular Not enough gold No land purchase, prices drop No money being made on speculation Farmers, merchants & speculators cannot pay back loans Land taken from citizens & speculators State & local banks lose money Banks must sell land at lower price to recover their losses State & local banks begin to fail Less banks, less loans, less economic growth