1. Prosperity and Panic
Ch. 12 sec. 4

2. Mr. Biddle’s Bank
The Second Bank of the United States was the most powerful bank in the country.
held government funds
issued money
bank president, Nicholas Biddle, set policies that controlled the nation’s money supply

3. Mr. Biddle’s Bank
the bank was run efficiently, but Jackson disliked it
Jackson distrusted banks after losing money in financial deals early in his career
felt the bank had too much power
made loans to members of Congress
Biddle bragged he could influence Congress
felt lending policies favored the wealthy and hurt the average person

4. Mr. Biddle’s Bank
to run the bank needed a charter, or written grant from Congress
Biddle asked for an early renewal thinking that Jackson would have to agree in an election year
He would be surprised.

5. Jackson’s War on the Bank
Congress voted to renew the charter – Jackson vetoed it
Jackson said the bank was unconstitutional
bank had a monopoly that favored the few at the expense of the many
the Supreme Court had already ruled the bank was constitutional
Jackson said elected officials had to judge constitutionality themselves not rely on the Court

6. Jackson’s War on the Bank
the bank became the main issue of the presidential campaign in 1832
National Republicans said Jackson was a tyrant who wanted too much power
Democrats portrayed Jackson as a defender of the people
Jackson took his victory to mean that people supported his view on the bank.

7. Jackson’s War on the Bank
Jackson set out to destroy the bank
Deposited government funds in pet banks
Biddle fought back by making it harder for people to borrow money
people turned on Biddle and supported Jackson
the bank went out of business

8. Prosperity Becomes Panic
The nation prospered during Jackson’s last term in office
It was easy to get loans -> people borrowed money to buy public lands -> the economy boomed
pet banks issued to much paper money
rise in money supply made money worth less
prices rose
inflation resulted - def: an increase in prices and a decrease in the value of money
only gold or silver could be used to pay for public lands

9. Prosperity Becomes Panic - Panic of 1837
Martin Van Buren, Jackson’s vice president, was elected president in 1836
shortly after a widespread fear about the state of the economy spread throughout the country
people demanded gold and silver in exchange for their paper money
banks ran out of gold and silver
government tried to get their money out of the banks
banks defaulted (went out of business)

10. Panic of 1837 a depression, or severe economic slump, resulted
people had little money
people stopped buying manufactured goods
90% of the factories in the northeast closed
jobless workers couldn’t buy food or pay rent
worst in cities, farmers could grow their own food

11. The Rise of the Whig Party
some argued that the government should help the economy - Van Buren disagreed
economy would improve if left alone
the less the government interfered the better

12. The Rise of the Whig Party
many Americans blamed Van Buren for the panic
new political party in 1840 election - the Whigs
named after a British party that opposed Royal power
ran William Henry Harrison for president and John Tyler for Vice-president
strong military record
defeated the Shawnees at the Battle of Tippecanoe
hero during the War of 1812
lack of strong political views
slogan: “Tippecanoe and Tyler too”

13. The Election of 1840 Whigs focused on personality rather than issues
appeal to the common people
used symbols of the frontier such as the log cabin to represent Harrison
contrasted with the wealthy Van Buren

14. The Election of 1840 Harrison won John Tyler became president
caught cold which resulted in pneumonia
died one month after inauguration
John Tyler became president