War on the War on the BankBank

What was the What was the 11stst National National BankBank?? Chartered by the

Dept. of the Treasury

Became First National Bank of U.S. in 1791

Private bank that met financial needs of federal govt.

Main purpose ◦ Pay off the huge war

debt

Charter expired in 1811

Seen by James Madison a a way to uniform the way to uniform the currencycurrencyChartered in 1816 Given a 20 year charterPrivate bank/NOT PUBLICPrivate bank/NOT PUBLIC

U.S. was unable to finance country after the War of 1812

Private business Private business invested money invested money into the bank and it loaned money out

Federal government Federal government deposited funds deposited funds into it

Bank set policies that Bank set policies that controlled nation’s controlled nation’s economyeconomy

Political AlliancesPolitical AlliancesBank president

Nicholas Biddle Nicholas Biddle pushed the bank pushed the bank for early renewalfor early renewal◦ Sought an ally in

presidential candidate Henry Clay

Henry Clay Henry Clay intended to use it intended to use it in the 1832 election in the 1832 election against Jackson

Hoped to ruin Hoped to ruin Jackson Jackson if the renewal bill was vetoed

Bill for renewal came to Jackson on July 4, 1832July 4, 1832◦Jackson was sick in bed

Jackson vetoed the bill that Jackson vetoed the bill that would give the bank a new would give the bank a new charter charter ◦“The bank, Mr. Van Buren, is trying to kill

me. But I will kill it!”

Jackson pulled govt. fundsJackson pulled govt. funds◦Deposited the money in state banksDeposited the money in state banks

Opponents called them “pet banks”“pet banks”

• Supreme Court ruledruled it constitutionalconstitutional• Smaller banks caused Smaller banks caused inflationinflation, , but Biddle worked to

regulate them– Issued too many loans & notes Issued too many loans & notes (paper bill that could be cashed

in for gold)

• JacksonJackson had the bank investigated for fraud & corruption– Felt Felt many officials were using it for personal gain officials were using it for personal gain – FeltFelt its lending policies favored the wealthypolicies favored the wealthy & hurt avg. people– Believed hard currency was the only safe formBelieved hard currency was the only safe form

– “Influenced the elections by means of its money”

“Soft”(paper) $

“Hard”(specie) $

BANK

President Jackson's Veto President Jackson's Veto Message Regarding the Bank of the United Message Regarding the Bank of the United

States; July 10, 1832States; July 10, 1832The bill " to modify and continue " the act entitled "An act to incorporate the subscribers to the Bank of the United States " was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it ought not to become a law, I herewith return it to the Senate, in which it originated, with my objections.

A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.

Era of Van BurenEra of Van Buren Nation prospered under Nation prospered under

JacksonJackson

Whig Party formed Whig Party formed as as opponentsopponents toto Jackson Jackson (“King Andrew I”)

Jackson’s V.P. easily won Jackson’s V.P. easily won the Election of 1836the Election of 1836◦ Martin Van BurenMartin Van Buren◦ Main opponent is former

military general William Henry Harrison

Within months people feared for the economy◦ Panic of 1837Panic of 1837

People exchanged paper exchanged paper money for gold or silver money for gold or silver

DepressionDepression and and ChangeChangeBanks could not Banks could not

keep up keep up & most went into default◦ It led to a led to a

depressiondepression

SomeSome like Clay & Webster believed believed the gov’t should the gov’t should helphelp◦ Van Buren believed

the economy would improve on its own

Van Buren blamed Van Buren blamed for the Panicfor the Panic

Election of 1840Election of 1840 WhigsWhigs again chosechose military hero

William Henry HarrisonWilliam Henry Harrison◦ Virginian John Tyler as V.P., John Tyler as V.P., a former

Democrat

Made the most of his nickname “Old Tippecanoe”◦ Whig campaign slogan – “Tippecanoe “Tippecanoe

& Tyler too!”& Tyler too!”

Whigs appealed to “common Whigs appealed to “common peoplepeople” Used the log cabin◦ Similar to Andrew Jackson

◦ Van Buren blamed for the depression

◦ HarrisonHarrison has a decisive PresidentPresidential victory

Harrison’s Harrison’s long speech in the speech in the bitter cold led to his death cold led to his death one month after inauguration◦ First time a president died in officeFirst time a president died in office

◦ Vice-President Tyler became Tyler became presidentpresident