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The Age of Jackson

24d. The War Against the Bank

Jackson and Clay
Jackson's actions with regards to the Second Bank of the United States resulted in his censure by Congress for abuse of power. This cartoon depicts Henry Clay sewing Jackson's mouth shut.
open quote You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.end quote
Andrew Jackson, to a delegation of bankers discussing the recharter of the Second Bank of the United States, 1832

The Second Bank of the United States was chartered in 1816 for a term of 20 years. The time limitation reflected the concerns of many in Congress about the concentration of financial power in a private corporation. The Bank of the United States was a depository for federal funds and paid national debts, but it was answerable only to its directors and stockholders and not to the electorate.

The supporters of a central bank were those involved in industrial and commercial ventures. They wanted a strong currency and central control of the economy. The opponents, principally agrarians, were distrustful of the federal government. The critical question — with whom would President Jackson side?

Bankers Row
These buildings, known as Bankers Row, are across from the Second Bank of the United States. This financial center is sometimes called "America's first Wall Street."

At the time Jackson became President in 1828, the Bank of the United States was ably run by Nicholas Biddle, a Philadelphian. But Biddle was more an astute businessman than politician. His underestimation of the power of a strong and popular President caused his downfall and the demise of the financial institution he commanded.

Jackson had been financially damaged by speculation and a tightening of bank credit early in his business career. He retained a distrust of financial institutions throughout his life. At first, however, Jackson's position on the Bank was not outwardly antagonistic. He was concerned about the Bank's constitutionality and the general soundness of paper money in place of gold and silver ("hard money"). Jackson was also sympathetic to "soft-money" supporters from the west who wanted access to easy credit.

The Second Bank of the United States

Do you think that Jackson should have rechartered the Second Bank of the United States?

Yes

No

In January 1832, Biddle's supporters in Congress, principally Daniel Webster and Henry Clay, introduced Bank recharter legislation. Even though the charter was not due to expire for four more years, they felt that the current Congress would recharter the Bank. They felt that Jackson would not risk losing votes in Pennsylvania and other commercial states by vetoing it. Jackson reacted by saying to his vice-president, Martin Van Buren, "The Bank is trying to kill me, Sir, but I shall kill it!"

Jackson's opposition to the Bank became almost an obsession. Accompanied by strong attacks against the Bank in the press, Jackson vetoed the Bank Recharter Bill. Jackson also ordered the federal government's deposits removed from the Bank of the United States and placed in state or "Pet" banks. The people were with Jackson, and he was overwhelmingly elected to a second term. Biddle retaliated by making it more difficult for businesses and others to get the money they needed. This caused an economic contraction at the end of 1833 and into 1834. The bank charter expired in 1836.

On the Web
Banking & Politics: As Old As The Republic
Throughout history, the worlds of money and politics have been intertwined. This essay examines the history of these interactions from Alexander Hamilton, through Jackson's issues with the Second Bank of the United States, as well as today's lobbying which affects the ATM fees you are charged to withdraw your own money.
Henry Clay and the Bank Wars
Personal feuds and political posturing marked the Bank Wars of 1832. This article explains the political maneuvering that surrounded the rechartering of the Second Bank of the United States, with a focus on the hostile relationships of men like Jackson, Clay, Calhoun, Biddle, and Van Buren. Read this brief essay from the University of Groningen and analyze Clay and Webster's reasons for rechartering early, and Jackson's reasons for the veto.
Second Bank of the United States
The Second Bank of the United States was more than just a political hotpoint, it is a Philadelphia landmark. UShistory.org provides an overview of the bank crisis with particular emphasis on Nicholas Biddle. Take a look at this piece to see what the building is being used for today, as well as information about its architecture and tourism opportunities.
The Destruction of The Second Bank of The United States Rationale And Effects
This scholarly paper written by two economic historians on the consequences of the destruction of the Second Bank's Charter is heavy reading, but worthwhile for those interested in the topic. Read it to find out who benefited from the veto of the Bank's charter as well as who lost the most. Bring a dictionary and a lot of patience to see the historical and long-term economic effects of the Bank Wars.
Conflict with the Executive: The Bank War
This pretty website from the National Archives and Records Administration allows a glimpse at the historical objects behind the Bank Wars. Take a look at a political cartoon, Jackson's veto, as well as the Bank Bill itself. Click on Jackson's quote to find a short history of the conflict, as well as a brief description of how Jackson's victory strenghtened the Presidency.
What happened to the building when the Second Bank of the United States closed its doors? Find out what's in there today.
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Nicholas Biddle's brother and Congressman Spencer Pettis were killed in a duel fought over the Bank of the United States.
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