Jackson The Economy & Banks I. Tariff of 1828 A. Protective tariff- tax placed on imported goods to support sale of American good

–1. Protective tariffs: 1816, 1824, 1828, & –2. Tariff of 1828 a. South was suffering from depressed cotton market b. Injured Southern economy

–c. Duties were as high as 45% –d. Actually passed by Jackson supporters to unseat JQA –e. New Englanders- wise to plan & accepted tariff

II. Tariff 0f 1832 –A. Amended tariff of 1828 to appease South 1. Did not go far enough 2. Lowered from 45 to 35% 3. South- tariffs appeared permanent

B. Nullifiers (Nullies) & Unionists Clash C. Almost caused a civil war –1. Jackson threatens to hang Nullifiers –2. Ex-Senator Robert Hayne –If a civil war was to be avoided one side had to compromise

D. Compromise- Tariff 1833 –1. Passed to appease South –2. Gradually lowered tariffs

E. Force Bill –1. Jacksonians save face –2. Authorized President to use army & navy to collect tariff duties

“The Bank is trying to kill me, but I will kill it.”

I.Bank of the United States(BUS) –A. McCulloch v. Maryland (1816) – Upheld constitutionality of national bank

B. Jackson –1. Against recharter of B.U.S. a. Henry Clay behind it b. Hurt West financially c. Felt it was a tool of Northeastern elite (Nicholas Biddle)

C. Jackson Vetoes Recharter Bill of 1832 –1. Unconstitutional –2. Abuse of executive power –3. Argued that he found Bill personally harmful –4. In effect- presidential power equal to 2/3 of Congress

5. Jackson won the election of 1832 based on the issue; the common people agreed with him.

D. Jackson’s Reaction & B.U.S. –1. Vowed to kill Bank –2. Withdrew found from B.U.S. & put them into state banks- Pet Banks –3. Forced B.U.S. to reverse policy and extend easy credit to state banks –

–5. Nicholas Biddle- tried to force the state banks to convert to gold which led to an inflationary spiral –6. Panic of economic depression