1. Chapter 12 section 4
Prosperity and Panic

2. Mr. Biddle’s Bank
The Second Bank of the United States, most powerful bank in country
Policies of Bank’s president, Nicholas Biddle, controls nation’s money
Andrew Jackson thinks bank has too much power, favors the wealthy
In 1832, Biddle asks Congress to renew the bank’s charter

3. Jackson’s War on the Bank
Andrew Jackson vetoes renewal of bank’s charter
Claims bank is unconstitutional, a monopoly that favors the few
In his second term, Jackson sets out to destroy the bank
Has government funds deposited in state banks
Biddle fights back, makes it harder for people to borrow money
Bank goes out of business, economy suffers

4. Prosperity becomes panic
People take out loans, banks issue too much paper money
Makes each dollar worth less, prices rise
Causes inflation—an increase in prices and decrease in money value
Jackson leaves office, nation has a false prosperity

5. Next president, Martin Van Buren, takes office, economic panic spreads
Fear about economy known as Panic of 1837
People demand gold, silver in exchange for paper money, banks run out
Banks default, severe economic slump, or depression, follows
90 percent of factories in East close, people go hungry

6. The rise of the Whig party
Senators Henry Clay, Daniel Webster want government to help economy
Martin Van Buren disagrees, economy will improve if left alone
At next election, Van Buren faces new political party, the Whig Party
Whigs oppose concentration of power in the president
Choose William Henry Harrison to run for president
Choose John Tyler to run for vice-president

7. The election of 1840
William Henry Harrison appeals to common people, wins 1840 election
Dies one month after being inaugurated
First president to die in office
Vice-president John Tyler becomes president