1. Ch 12.3 – 12.4: Conflict, Prosperity, and Panic
EQ: What problems arose with tariffs and the National Bank during Jackson’s presidency?

2. Tariffs Tariff = Taxes on imported goods
By 1816 tariffs were govt main source of income
North and South strongly disagreed on use of Tariffs
Northern factories supported high tariffs – made imported goods more expensive than American goods, which was good for Northern factories
How Tariffs work =

3. Tariffs Create Division
South strongly opposed rising tariffs, South Carolina even threatening secession
Secession = withdrawing from the Union
Southerners objected high tariffs because:
South’s economy depended on foreign trade
Believed tariffs hurt South but helped Northeast
Many tariff funds used to make improvements in Northeast, but not the South

4. A Tariff Compromise
President Jackson asked Congress to reduce tariff rate
South still thought it was too high
Henry Clay creates a compromise tariff rate in 1833, ending crisis, and South Carolina staying in Union
Henry Clay

5. Jackson’s Bank War
Jackson had deep distrust of national bank because he felt it favored wealthy over average people
When Second Bank of the US (a national bank) asked for renewal of charter he vetoed bill
He claimed the bank was unconstitutional, although Supreme Court disagreed

6. Jackson VS National Bank
In 2nd term, Jackson set out to destroy National Bank
Moved government funds into state banks
Second Bank of US manager fought back by making it harder for people to borrow money, thinking it would force Jackson to put money back
People rallied around Jackson’s cause and ended up putting the National Bank out of business

8. The Panic of 1837
In beginning nation prospered because it was easier to borrow money from state banks
But eventually closure of the national bank led to Panic of 1837 because:
State banks issued too much paper money
Inflation occurred due to too much paper money in circulation
People began to panic about the nation’s economy

10. The Whig Party & the Election of 1840
After Jackson’s presidency people elected Martin Van Buren (1836) who was blamed for the Panic of 1837.
1840 the Whig Party emerged (opponents of Jackson- whom they called “King Andrew” Jackson).
People chose William Henry Harrison of Ohio from the Whig party with John Tyler as vice-president.

11. FYI: U.S. Presidents
6. John Quincy Adams 7. Andrew Jackson 8. Martin Van Buren 9. William Henry `Harrison 10. John Tyler
George Washington
John Adams
Thomas Jefferson
James Madison
James Monroe

12. Reflection! Create a 3-6 sentence summary answering the EQ!
Remember the EQ was:
EQ: What problems arose with tariffs and the National Bank during Jackson’s presidency?