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Jackson and the Bank Chapter 11, Lesson 3.

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1 Jackson and the Bank Chapter 11, Lesson 3

2 War Against the Bank Jackson was never a fan of the Bank of the United States. He believed that it was an organization of wealthy Easterners over which ordinary citizens had no control and for years he attacked it. The Bank of the United States was powerful since it held the federal government’s money and controlled much of the country’s currency. Though it was chartered by Congress, it was ran by private bankers rather than elected officials. Nicholas Biddle – The Banks president who happened to embody everything Jackson disliked. Jackson took pride that he came from nothing and was a self-made man. Biddle came from a wealthy family and had a good education and social standing.

3 War Against the Bank In 1832, Senators Henry Clay and Daniel Webster (friends of Biddle, enemies of Jackson) wanted to use the bank to defeat Jackson in the election of 1832. They believed the bank had popular support and wanted Biddle to apply for a new charter, even though the current charter for the Bank did not expire until 1836. They thought that if Jackson vetoed the charter it would lead to his defeat allowing Henry Clay to be elected president. Jackson was sick in bed when the bill made its way to him for a signature. Jackson tells Martin Van Buren, “The bank, Mr. Van Buren, is trying to kill me. But I will it!” Jackson vetoed (rejected) the bill.

4 War Against the Bank Jackson, like many others, still felt the Bank was unconstitutional despite the ruling in McCulloch v. Maryland. (The Congress had the power to create the bank and the state of Maryland could not levy a tax on a federal institution.) Jackson argued… “… when laws… make the rich richer and the potent more powerful, the humble members of society – the farmers, mechanics, and laborers, who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government.”

5 The Election of 1832 Webster and Clay were right about the Bank of the United States playing a large part in the campaign of 1832. However, Clay did not receive support as anticipated as most people supported Jackson’s veto of the charter. Jackson gets reelected, receiving 55% of the popular vote and collecting 219 electoral votes to Clay’s 49. Martin Van Buren becomes his Vice President. Jackson decided on a plan to kill the Bank ahead of the 1836 schedule. He ordered the withdrawal of all government deposits from the Bank and had them placed in smaller state banks. In 1836, he refused to sign a new charter for the Bank and it closed.

6 The Panic of 1837 When Jackson chose not to run for a third term the Democrats selected Martin Van Buren as their candidate. His opposition was a new political party known as the Whigs, who were mostly composed of former National Republicans and anti-Jackson forced. Jackson’s popularity and personal support helped Van Buren win the election and gets inaugurated in 1837. Shortly after the inauguration the country enters a severe depression. The Panic of 1837 – period where land values dropped sharply, investments declined, and banks suddenly failed. The depression began with this event. Thousands of business closed and hundred of people lost their jobs. Cotton prices fell to record lows in the South.

7 The Panic of 1837 In the city people could not afford food or rent.
President Van Buren believed in laisses-faire (government should interfere as little as possible in the nation’s economy.) He Persuades Congress to establish an independent federal treasury in 1840. The government would no longer store its money in private banks (as Jackson initiated) but in a treasury. Private Banks used government funds to back their banknotes and this new treasury system would prevent banks from using government funds this way, guarding against future bank crises. The new law was hailed by Van Buren and supporters as a “second declaration of independence.” Criticism came from both the Democrats and Whigs. The split between the Democrats would give the Whigs a chance to win the presidency in 1840.

8 The Whigs Come to Power Democrats had controlled the presidency for 12 years. However the country was still in a depression and the Whigs hoped to capitalize on this in order to win the election in 1840. William Henry Harrison is nominated by the Whigs (hero of the War of 1812) to run against Van Buren. John Tyler was Harrison’s running mate, a planter from Virginia. Harrison had some fame from defeating Tecumseh’s followers in the Battle of Tippecanoe. (Chapter 9, Lesson 3 Notes A Time of Conflict) The Whigs create a campaign slogan, “Tippecanoe and Tyler Too!” Harrison needed to gain the support of those laborers and farmers who had voted for Jackson. The Whigs adopt a Log Cabin as their symbol. Some Political cartoons showed Harrison, a wealthy man from Virginia, standing in front of a log cabin to give the portrayal that he was a “man of the people”

9 The Whigs Come to Power The Whigs ridiculed Van Buren calling him “King Martin,” a wealthy man who spent the people’s money on fancy furniture for the White House. The log cabin campaign worked and Harrison defeated Van Buren by a wide margin. William Henry Harrison was inaugurated as the first Whig president in 1841. The Whigs were still celebrating their victory when Harrison died of Pneumonia on April 4, 1841 (Only President for 30 days) John Tyler becomes the first vice president to receive the presidency because the elected president dies in office. Although Tyler was elected as a vice president for the Whigs, he was once a democrat. As a strong supporter of states’ rights, he began to veto several bills sponsored by the Whigs in Congress (including one to recharter the Bank of the United States.

10 The Whigs Come to Power His lack of party loyalty led to most of his cabinet resigning, and Whig leaders in Congress expelling him from the party. It appeared the Whigs could not agree on their party goals. They often voted in favor of sectional ties (North, South, and West) and not those of the party. Whig Candidate Henry Clay most likely lost the election of 1844 to Democratic candidate James Polk in the election of 1844. After only four years, the Whigs were out of power again.

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