War on the Bank

What was the 1 st National Bank? Chartered by the Dept. of the Treasury Became First National Bank of U.S. in 1791 Private bank that met financial needs of federal govt. Main purpose ◦ Pay off the huge war debt Charter expired in 1811

a way to uniform the currency Seen by James Madison a way to uniform the currency Chartered in 1816 Given a 20 year charter Private bank/NOT PUBLIC Private bank/NOT PUBLIC U.S. was unable to finance country after the War of 1812 Private business invested money Private business invested money into the bank and it loaned money out Federal government deposited funds Federal government deposited funds into it Bank set policies that controlled nation’s economy Bank set policies that controlled nation’s economy

Political Alliances Nicholas Biddle pushed the bank for early renewal Bank president Nicholas Biddle pushed the bank for early renewal ◦ Sought an ally in presidential candidate Henry Clay Henry Clay intended to use it in the 1832 election Henry Clay intended to use it in the 1832 election against Jackson Hoped to ruin Jackson Hoped to ruin Jackson if the renewal bill was vetoed

Bill for renewal came to Jackson on J JJ July 4, 1832 ◦J◦J ackson was sick in bed Jackson vetoed the bill that would give the bank a new charter ◦“◦“ The bank, Mr. Van Buren, is trying to kill me. But I will kill it!” Jackson pulled govt. funds ◦D◦D◦D◦Deposited the money in state banks OOpponents called them “ ““ “pet banks”

ruledconstitutionalSupreme Court ruled it constitutional Smaller banks caused inflation,Smaller banks caused inflation, but Biddle worked to regulate them –Issued too many loans & notes –Issued too many loans & notes (paper bill that could be cashed in for gold) JacksonJackson had the bank investigated for fraud & corruption –Felt officials were using it for personal gain –Felt many officials were using it for personal gain –Feltpolicies favored the wealthy –Felt its lending policies favored the wealthy & hurt avg. people –Believed hard currency was the only safe form –“Influenced the elections by means of its money ” “Soft” (paper) $ “Hard” (specie) $ BANK

President Jackson's Veto Message Regarding the Bank of the United States; July 10, 1832 The bill " to modify and continue " the act entitled "An act to incorporate the subscribers to the Bank of the United States " was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it ought not to become a law, I herewith return it to the Senate, in which it originated, with my objections. A bank of the United States is in many respects convenient for the Government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution, subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty at an early period of my Administration to call the attention of Congress to the practicability of organizing an institution combining all its advantages and obviating these objections. I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.

Era of Van Buren Nation prospered under Jackson Nation prospered under Jackson Whig Party formed as opponentstoJackson Whig Party formed as opponents to Jackson (“King Andrew I”) Jackson’s V.P. easily won the Election of 1836 Jackson’s V.P. easily won the Election of 1836 ◦ Martin Van Buren ◦ Main opponent is former military general William Henry Harrison Within months people feared for the economy ◦ Panic of 1837 exchanged paper money for gold or silver People exchanged paper money for gold or silver

Depression and Change Banks could not keep up Banks could not keep up & most went into default led to a depression ◦ It led to a depression Some believed the gov’t should help Some like Clay & Webster believed the gov’t should help ◦ Van Buren believed the economy would improve on its own Van Buren blamed for the Panic Van Buren blamed for the Panic

Election of 1840 Whigschose William Henry Harrison Whigs again chose military hero William Henry Harrison John Tyler as V.P., ◦ Virginian John Tyler as V.P., a former Democrat Made the most of his nickname “Old Tippecanoe” “Tippecanoe & Tyler too!” ◦ Whig campaign slogan – “Tippecanoe & Tyler too!” Whigs appealed to “common people Whigs appealed to “common people” Used the log cabin ◦ Similar to Andrew Jackson ◦ Van Buren blamed for the depression ◦ HarrisonPresident ◦ Harrison has a decisive Presidential victory Harrison’s speech in the cold led to his death Harrison’s long speech in the bitter cold led to his death one month after inauguration ◦ First time a president died in office Tyler became president ◦ Vice-President Tyler became president