Prosperity and Panic Ch. 12 sec. 4

Mr. Biddle’s Bank The Second Bank of the United States was the most powerful bank in the country. held government funds issued money bank president, Nicholas Biddle, set policies that controlled the nation’s money supply

Mr. Biddle’s Bank the bank was run efficiently, but Jackson disliked it Jackson distrusted banks after losing money in financial deals early in his career felt the bank had too much power made loans to members of Congress Biddle bragged he could influence Congress felt lending policies favored the wealthy and hurt the average person

Mr. Biddle’s Bank to run the bank needed a charter, or written grant from Congress Biddle asked for an early renewal thinking that Jackson would have to agree in an election year He would be surprised.

Jackson’s War on the Bank Congress voted to renew the charter – Jackson vetoed it Jackson said the bank was unconstitutional bank had a monopoly that favored the few at the expense of the many the Supreme Court had already ruled the bank was constitutional Jackson said elected officials had to judge constitutionality themselves not rely on the Court

Jackson’s War on the Bank the bank became the main issue of the presidential campaign in 1832 National Republicans said Jackson was a tyrant who wanted too much power Democrats portrayed Jackson as a defender of the people Jackson took his victory to mean that people supported his view on the bank.

Jackson’s War on the Bank Jackson set out to destroy the bank Deposited government funds in pet banks Biddle fought back by making it harder for people to borrow money people turned on Biddle and supported Jackson the bank went out of business

Prosperity Becomes Panic The nation prospered during Jackson’s last term in office It was easy to get loans -> people borrowed money to buy public lands -> the economy boomed pet banks issued to much paper money rise in money supply made money worth less prices rose inflation resulted - def: an increase in prices and a decrease in the value of money only gold or silver could be used to pay for public lands

Prosperity Becomes Panic - Panic of 1837 Martin Van Buren, Jackson’s vice president, was elected president in 1836 shortly after a widespread fear about the state of the economy spread throughout the country people demanded gold and silver in exchange for their paper money banks ran out of gold and silver government tried to get their money out of the banks banks defaulted (went out of business)

Panic of 1837 a depression, or severe economic slump, resulted people had little money people stopped buying manufactured goods 90% of the factories in the northeast closed jobless workers couldn’t buy food or pay rent worst in cities, farmers could grow their own food

The Rise of the Whig Party some argued that the government should help the economy - Van Buren disagreed economy would improve if left alone the less the government interfered the better

The Rise of the Whig Party many Americans blamed Van Buren for the panic new political party in 1840 election - the Whigs named after a British party that opposed Royal power ran William Henry Harrison for president and John Tyler for Vice-president strong military record defeated the Shawnees at the Battle of Tippecanoe hero during the War of 1812 lack of strong political views slogan: “Tippecanoe and Tyler too”

The Election of 1840 Whigs focused on personality rather than issues appeal to the common people used symbols of the frontier such as the log cabin to represent Harrison contrasted with the wealthy Van Buren

The Election of 1840 Harrison won John Tyler became president caught cold which resulted in pneumonia died one month after inauguration John Tyler became president