1. Section 5 – pg 236 Finance and States’ Rights
Chapter 6
Section 5 – pg 236
Finance and States’ Rights

2. Pg 236
The Bank War
1816 – 1830s: second Bank of the US earned support from business ppl
Bank made loans to them
Fed gov’t had a safe place to keep money
Issued money formed a stable currency
Created confidence in other banks

3. However, many Americans disliked the Bank
Pg 236
However, many Americans disliked the Bank
The Bank restricted loans made by state banks
Limited the amount of money they could lend out
Many blamed the Bank for the economic crisis in 1819
Many farmers lost their land
Andrew Jackson called the Bank “the Monster”
Thought the wealthy were at an advantage
Disliked the banks president, Nicholas
Biddle, who came from a wealthy family
and often did favors for politicians

4. Biddle got Congress to renew the Bank’s charter in 1832
Pg 237
Biddle got Congress to renew the Bank’s charter in 1832
Jackson immediately vetoed the bill
The Bank became a huge issue in the 1832 election
Henry Clay, who supported the bank, ran against Andrew Jackson
Many voters opposed the Bank leading to Jackson being reelected in a landslide
Second Bank ceased to exist when its charter ran out in 1836
Another economic crisis struck when Jackson left office
W/o a Bank of the US, it was harder for the next President to end the crisis

5. The Struggle Over States’ RightsPg
The Struggle Over States’ Rights
Balance of power between the fed gov’t and states’ power has long been debated
The Constitutional Convention of 1787 created a gov’t based on federalism (the division of power between the national gov’t and the states)
Constitution gives fed gov’t many powers
10th Amendments reserves power for the states

6. The Nullification Crisis
Pg 238
The Nullification Crisis
Congress passed a law in 1828 that raised the tariff on iron, textiles, and other products
Helped the businesses in the North and some in the West
Farmers in the South felt that they were being forced to follow an unfair law
Vice President John C. Calhoun argued that the states had the right of nullification ( an action by a state that cancels a federal law to which the states object)

7. Arguments for Nullification
Pg 238
Arguments for Nullification
Many southerners saw the tariff as an example of the fed gov’t enforcing an unfair law
Slavery was unpopular outside the South
Many southerners thought the fed gov’t might use their power to end slavery

8. Arguments Against Nullification
Pg 239
Arguments Against Nullification
Senator Daniel Webster argued that the US had not been formed by the states, but by the entire American ppl
The Union was more important than states’ rights

9. South Carolina Threatens to Secede
Pg 239
South Carolina Threatens to Secede
In 1832, Congress passed another tariff law
South Carolina called a state convention, which voted to nullify the tariffs
Also threatened to secede from the Union if the fed gov’t tried to enforce it
Jackson responded in December 1832 by putting federal troops in South Carolina on alert
Calhoun resigned as Vice President

10. Pg
Early in 1833, Jackson asked Congress to allow the fed gov’t to collect its tariff in South Carolina by force if necessary
At the same time, supported a compromise bill that lowered the tariffs (passed in March 1832)
Unable to win support from other states, South Carolina repealed its tariff nullification

11. The End of the Jackson Era
Pg 240
The End of the Jackson Era
Andrew Jackson retired from office after two years
Was succeeded by Martin Van Buren
Had been secretary of state during Jackson’s first term and Vice President during the 2nd term
Had been a close political advisor to Jackson

12. Pg 240
1836 election – Whigs ran 3 candidates, each from a different region of the country
Goal was to prevent any candidate from receiving a majority of electoral votes
Did not work, Van Buren received a majority of both the electoral and the popular vote

13. The Panic of 1937 Van Buren took office during a economic slump
Pg 241
The Panic of 1937
Van Buren took office during a economic slump
Britain was not doing well economically, meaning they were buying less cotton from us
Cotton prices fell
American banks could not collect on loans made to cotton growers
Hundreds of banks went bankrupt
Led to economic collapse called the Panic of 1837
Lasted 6 years and ruined Van Buren’s presidency

14. Pg 241
The Election of 1840
Van Buren ran for reelection in 1840 against Whig candidate, William Henry Harrison
Whigs ran successful campaign
Used parades, barbecues, and other forms of entertainment to reach ordinary voters
Harrison was seen as a man of the people and easily won