JACKSON AND THE BANK WAR On economic issues, against concentrating power either in federal government or powerful institutions (like the bank)

Biddle’s Institution Nicolas Biddle - President of the Bank Nicolas Biddle - President of the Bank Branches in 29 cities-headquarters Philadelphia Branches in 29 cities-headquarters Philadelphia Most powerful and widespread institution in the nation Most powerful and widespread institution in the nation By law, only place gov’t could deposit its funds By law, only place gov’t could deposit its funds

Functions of Bank Credit to business Issued bank notes Exercised control on state banks

Opposition to Bank “ soft money”—wanted more currency in circulation, little gold or silver backing. “ soft money”—wanted more currency in circulation, little gold or silver backing. mainly state bankers (Bank of US prevented state banks from issuing notes freely)  “hard money”—gold and silver ONLY basis for money  (bank of U.S. did issue some banks notes)  Jackson favored specie only

Jackson’s Position Jackson supported hard money position (looked with suspicion on expansion and speculation) Jackson supported hard money position (looked with suspicion on expansion and speculation) As president also sensitive to soft money supporters in West and South As president also sensitive to soft money supporters in West and South He would NOT support rechartering bank (1836) He would NOT support rechartering bank (1836)

Biddle’s Position Not a politician Not a politician Granted favors to politicians (like Webster and Clay) that he thought could help him Granted favors to politicians (like Webster and Clay) that he thought could help him Biddle et al ask Congress to pass bill to recharter in 1832 Biddle et al ask Congress to pass bill to recharter in 1832 Wanted to make an election issue of it Wanted to make an election issue of it

Congress passes the renewal Congress passes the renewal “The bank, Mr. Van Buren, is trying to kill me. But I will kill it.” “The bank, Mr. Van Buren, is trying to kill me. But I will kill it.” Jackson vetoes it Jackson vetoes it Becomes an issue Becomes an issue Clay defeated for Presidency in 1832 Clay defeated for Presidency in 1832 AJ 219 AJ 219 Clay 49 Clay 49

Destruction of Bank Beginning in 1833, AJ began to withdraw all government deposits Beginning in 1833, AJ began to withdraw all government deposits Secretary of Treasury wouldn’t do it Secretary of Treasury wouldn’t do it AJ fired him AJ fired him New one said no, he got fired New one said no, he got fired Finally appointed Roger B. Taney—he began to put gov’t money in “pet banks” Finally appointed Roger B. Taney—he began to put gov’t money in “pet banks”

Biddle’s Response Began to call in loans and raise interest rates Began to call in loans and raise interest rates Cause financial distress Cause financial distress Hope short recession would cause Congress to recharter bank Hope short recession would cause Congress to recharter bank “Nothing but the evidence of suffering would produce any effect in Congress.” Biddle “Nothing but the evidence of suffering would produce any effect in Congress.” Biddle This is now a personal struggle between 2 strong men This is now a personal struggle between 2 strong men

The END —supporters of Bank blame AJ for recessionJacksonians blame Biddle —supporters of Bank blame AJ for recessionJacksonians blame Biddle “Go to Biddle”…AJ “Go to Biddle”…AJ Supporters lost patience Supporters lost patience Biddle forced to grant credit in abundance Biddle forced to grant credit in abundance HE lost this battle! HE lost this battle! Jackson lost the war Jackson lost the war