Chapter 12 section 4 Prosperity and Panic

Mr. Biddle’s Bank The Second Bank of the United States, most powerful bank in country Policies of Bank’s president, Nicholas Biddle, controls nation’s money Andrew Jackson thinks bank has too much power, favors the wealthy In 1832, Biddle asks Congress to renew the bank’s charter

Jackson’s War on the Bank Andrew Jackson vetoes renewal of bank’s charter Claims bank is unconstitutional, a monopoly that favors the few In his second term, Jackson sets out to destroy the bank Has government funds deposited in state banks Biddle fights back, makes it harder for people to borrow money Bank goes out of business, economy suffers

Prosperity becomes panic People take out loans, banks issue too much paper money Makes each dollar worth less, prices rise Causes inflation—an increase in prices and decrease in money value Jackson leaves office, nation has a false prosperity

Next president, Martin Van Buren, takes office, economic panic spreads Fear about economy known as Panic of 1837 People demand gold, silver in exchange for paper money, banks run out Banks default, severe economic slump, or depression, follows 90 percent of factories in East close, people go hungry

The rise of the Whig party Senators Henry Clay, Daniel Webster want government to help economy Martin Van Buren disagrees, economy will improve if left alone At next election, Van Buren faces new political party, the Whig Party Whigs oppose concentration of power in the president Choose William Henry Harrison to run for president Choose John Tyler to run for vice-president

The election of 1840 William Henry Harrison appeals to common people, wins 1840 election Dies one month after being inaugurated First president to die in office Vice-president John Tyler becomes president