12.3 Jackson and the National Bank Pgs. 243-245

Jackson and the National Bank The 1832 election featured no mudslinging. The big issue in the election was the issue of the National Bank. It was due to expire in 1836, unless Congress renewed it.

Banker Nicholas Biddle Nicholas Biddle was a talented banker in Philadelphia, who handled the national bank. The bank’s 29 branches helped the nation financially. The bank controlled 1/5 of all bank notes.

Banker Nicholas Biddle 4/5 of the stock in these banks were owned by private parties (rich easterners). The bank was responsible to them.

Jackson and the National Bank Biddle courted Jackson’s favor by making loans to Jackson supporters. He suggested the national debt be repaid on the anniversary of his victory at New Orleans. Jackson and the National Bank

Jackson and the National Bank Although this was Jackson’s goal, he still hated banks. Not just the National Bank, but all banks. Jackson and the National Bank

Jackson and the National Bank Jackson vented his feelings about the National Bank. Although the Supreme Court already upheld the National Bank, Jackson strongly disagreed. Jackson and the National Bank

Jackson and the National Bank Jackson and his supporters pursued wealth as strongly as eastern merchants. However they tried to paint easterners as the only people who were greedy. Jackson and the National Bank

Jackson and the National Bank Jackson had support of state banks. He led them to believe that Biddle and the National Bank would destroy them by calling in their notes. Jackson and the National Bank

Jackson and the National Bank The New York state bank joined the anti- bank group out of jealous resentment. If Biddle’s bank was re- chartered they were concerned things business wouldn’t come their way. Jackson and the National Bank

Henry Clay thought he saw a path to the presidency and way to save the National Bank in 1832. He made it his central campaign issue. Election of 1832

Clay issued a bill to re- charter the bank in 1832, 4 years before the bank expired. Election of 1832

Congress passed the bill, but an angered Jackson vetoed it. Voters seemed to agree with Jackson as he won the election in an electoral landslide. It’s hard to vote out and incumbent. Election of 1832

Jackson and His Pet Banks Jackson’s veto meant the end of the National Bank in 1836. That wasn’t enough for Jackson, he wanted to kill the Bank and ruin Biddle. Jackson and His Pet Banks

Jackson and His Pet Banks Jackson ordered the Secretary of Treasury to stop depositing money in the National Bank. Government revenue would be opened up in accounts in 89 state banks. Jackson’s pet banks. Jackson and His Pet Banks

Jackson and His Pet Banks Fearing an economic panic, the secretary refused and Jackson fired him. Jackson went through 3 more secretaries before he found one willing to do his bidding. Jackson and His Pet Banks

Jackson and His Pet Banks However, lacking money Biddle was forced to call in loans by state banks. This recall ruined hundreds of state banks and wiped out the savings of many Americans. Jackson and His Pet Banks

Jackson and His Pet Banks Biddle then tried to save the banks. He lent out more money instead of calling in loans. This influx of money led to a new problem in the west: speculation. Jackson and His Pet Banks

What is Speculation? investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.

Jackson and His Pet Banks Congress added to the instability of western banks by passing a distribution bill that provided state governments with $37 million for internal improvements. Jackson and His Pet Banks

Jackson and His Pet Banks More people began creating state banks with the hope of making more profits. State banks increased from 330 in 1830 to 800 in 1837. What would be the problem with this? Jackson and His Pet Banks

The Specie Circular Inflation began to rise dramatically worrying Jackson. Prices for western land began to rise. Jackson requested the treasury department to issue a Specie Circular.

The Specie Circular This cut down on bank loans, but it also meant borrowers couldn’t pay back their bank debts. People no longer trusted paper money.

The Specie Circular Banks began failing, farmers began losing their land, businesses began to fail. By the end of Jackson’s administration the nation was inn a depression.

12.3 Section Quiz