Section 5 – pg 236 Finance and States’ Rights Chapter 6 Section 5 – pg 236 Finance and States’ Rights

Pg 236 The Bank War 1816 – 1830s: second Bank of the US earned support from business ppl Bank made loans to them Fed gov’t had a safe place to keep money Issued money formed a stable currency Created confidence in other banks

However, many Americans disliked the Bank Pg 236 However, many Americans disliked the Bank The Bank restricted loans made by state banks Limited the amount of money they could lend out Many blamed the Bank for the economic crisis in 1819 Many farmers lost their land Andrew Jackson called the Bank “the Monster” Thought the wealthy were at an advantage Disliked the banks president, Nicholas Biddle, who came from a wealthy family and often did favors for politicians

Biddle got Congress to renew the Bank’s charter in 1832 Pg 237 Biddle got Congress to renew the Bank’s charter in 1832 Jackson immediately vetoed the bill The Bank became a huge issue in the 1832 election Henry Clay, who supported the bank, ran against Andrew Jackson Many voters opposed the Bank leading to Jackson being reelected in a landslide Second Bank ceased to exist when its charter ran out in 1836 Another economic crisis struck when Jackson left office W/o a Bank of the US, it was harder for the next President to end the crisis

The Struggle Over States’ Rights Pg 237 - 238 The Struggle Over States’ Rights Balance of power between the fed gov’t and states’ power has long been debated The Constitutional Convention of 1787 created a gov’t based on federalism (the division of power between the national gov’t and the states) Constitution gives fed gov’t many powers 10th Amendments reserves power for the states

The Nullification Crisis Pg 238 The Nullification Crisis Congress passed a law in 1828 that raised the tariff on iron, textiles, and other products Helped the businesses in the North and some in the West Farmers in the South felt that they were being forced to follow an unfair law Vice President John C. Calhoun argued that the states had the right of nullification ( an action by a state that cancels a federal law to which the states object)

Arguments for Nullification Pg 238 Arguments for Nullification Many southerners saw the tariff as an example of the fed gov’t enforcing an unfair law Slavery was unpopular outside the South Many southerners thought the fed gov’t might use their power to end slavery

Arguments Against Nullification Pg 239 Arguments Against Nullification Senator Daniel Webster argued that the US had not been formed by the states, but by the entire American ppl The Union was more important than states’ rights

South Carolina Threatens to Secede Pg 239 South Carolina Threatens to Secede In 1832, Congress passed another tariff law South Carolina called a state convention, which voted to nullify the tariffs Also threatened to secede from the Union if the fed gov’t tried to enforce it Jackson responded in December 1832 by putting federal troops in South Carolina on alert Calhoun resigned as Vice President

Pg 239-240 Early in 1833, Jackson asked Congress to allow the fed gov’t to collect its tariff in South Carolina by force if necessary At the same time, supported a compromise bill that lowered the tariffs (passed in March 1832) Unable to win support from other states, South Carolina repealed its tariff nullification

The End of the Jackson Era Pg 240 The End of the Jackson Era Andrew Jackson retired from office after two years Was succeeded by Martin Van Buren Had been secretary of state during Jackson’s first term and Vice President during the 2nd term Had been a close political advisor to Jackson

Pg 240 1836 election – Whigs ran 3 candidates, each from a different region of the country Goal was to prevent any candidate from receiving a majority of electoral votes Did not work, Van Buren received a majority of both the electoral and the popular vote

The Panic of 1937 Van Buren took office during a economic slump Pg 241 The Panic of 1937 Van Buren took office during a economic slump Britain was not doing well economically, meaning they were buying less cotton from us Cotton prices fell American banks could not collect on loans made to cotton growers Hundreds of banks went bankrupt Led to economic collapse called the Panic of 1837 Lasted 6 years and ruined Van Buren’s presidency

Pg 241 The Election of 1840 Van Buren ran for reelection in 1840 against Whig candidate, William Henry Harrison Whigs ran successful campaign Used parades, barbecues, and other forms of entertainment to reach ordinary voters Harrison was seen as a man of the people and easily won