Download American Presidents and the Economy Notes Sheet

Name __________________________
Checks and Balances:
U.S. Presidents and the Economy
Directions: Working in teams, match
the president with the appropriate
“Economic Situation,” “Government
Response,” and “Primary Source
Document” cards you are presented.
Check your answers with the teacher.
Use the “Student Handout” sheet and
write a three sentence synopsis of the
economic events of each of the
presidents presented.
George Washington
(1789-1797)
Andrew Jackson
(1829-1837)
Abraham Lincoln
(1861-1865)
William McKinley
(1897-1901)
Woodrow Wilson
(1913-1921)
Card: _________
Card: _________
Card: _________
Card: _________
Write a summary below
Write a summary below
Write a summary below
Write a summary below
Write a summary below
Card: _________
Card: _________
Card: _________
Card: _________
Card: _________
Write a summary below
Write a summary below
Write a summary below
Write a summary below
Write a summary below
Primary
Source
Government Response
Economic Situation
Card: _________
CARD A
Economic Situation:
Since the death of the Second Bank of the United States in 1836,
the American financial system was carried out by state-chartered
banks with no federal regulation. As a result, financial panics
plagued the nation, leading to bank failures and business
bankruptcies that severely disrupted the economy throughout the
19th century and the beginning of the 20th century. During this
time, America experienced a wave of economic recessions
including the Panic of 1857 and Panic of 1873 and a severe
economic depression known as the Panic of 1893. When another
recession struck in 1907, this panic persuaded many Americans
that U.S. banking was sadly out of date and in need of major
reform. In addition, many Progressive Era reformers were calling
for the return of a central bank to regulate U.S. monetary policy.
CARD 1
Government Response:
This president was the first and only president to eliminate the
national debt. However, his presidency is more remembered for
ordering the premature removal of the government’s deposits
from the Second Bank of the United States in an attempt to kill it
outright. He appointed a Treasury Secretary who removed and
then deposited the reserves in various state banks (known as “pet
banks” or “wildcat banks”). However, his victory over the BUS is
considered questionable because this and other policies, such as
the Specie Circular of 1836, destabilized the financial system and
economy, rendering them susceptible to shocks. When the US
suffered a banking panic in 1837, the economy slipped into a
severe depression that lasted until 1844. The resulting decline in
government revenues ironically led to deficits that led to the
rebirth of the national debt.
CARD B
Economic Situation:
During the Civil War, the national government faced extraordinary
challenges. Among the challenges was finding a way to raising $3
billion to fight the Confederacy and pay for war supplies, soldiers’
pay, new transportation initiatives, and other war-related
expenses. At the time of the Civil War, the national government did
not have a central bank, a national banking system, a national
currency or a means for collecting internal federal taxes.
. CARD 2
Government Response:
During the Progressive Era, Congress passed the Federal Reserve
Act. The Federal Reserve System, also known as "The Fed," is the
central bank of the United States. The Fed is a network of twelve
Federal Reserve district banks and serves as a bank for other banks
and a bank for the federal government. It was created to provide the
nation with a safer, more flexible, and more stable monetary and
financial system. Its two primary responsibilities include controlling
inflation and unemployment by regulating the U.S. monetary policy.
CARD C
Economic Situation:
During the Gilded Age, farmers and western settlers began to
attack the nation’s monetary system. Since 1873, Congress
declared that all federal money must be backed by gold. This “gold
standard” limited the nation's money supply and benefited the
wealthy. Farmers wanted to create inflation and supported
expanding the money supply to include dollars backed by gold and
silver. Bimetallism was one of the platform issues of the new
Populist Party and its presidential candidate William Jennings
Bryan who’s “Cross of Gold” speech called for the free coinage of
silver money. In addition, America was in the depths of its worst
economic depression until the Great Depression in 1929.
CARD 3
Government Response:
Federalists like Secretary of the Treasury, Alexander Hamilton,
believed the best way to create a lasting republic was to give the
central government an efficient system of tax collection and public
credit. Hamilton wanted the federal government to assume, or
take over, and then pay the war debts of the individual states. At
Hamilton’s urging, the government used revenues from tariffs to
pay of federal and state war bonds. The government chartered a
new central bank, the Bank of the United States, which provided
loans to the government as well as to merchants and other
businesses. Hamilton’s system established the young nation’s
credit and stabilized the American economy under the direction of
a strong national government.
CARD D
Economic Situation:
One of the most pressing issues facing the new nation was the
national debt incurred during the Revolutionary War. When the
United States was formed, the federal government was essentially
bankrupt, and its bonds nearly worthless. States had huge war
debts. There was runaway inflation. In fact, one of the reasons for
the Constitutional Convention of 1789 was Shays’ Rebellion which
was incited by high debts by farmers and was made worse by the
inability of the government to raise money to stop the rebellion
CARD 4
CARD E
Economic Situation:
The Second Bank of the United States was chartered in 1816 for a
term of 20 years. The BUS was a depository for federal funds and
paid national debts, but it was answerable only to its directors and
stockholders and not to the American people. The supporters of a
central bank were those involved in industrial and commercial
ventures. They wanted a strong currency and central control of the
economy. The opponents (mostly farmers) were distrustful of the
federal government. Many farmers had been financially damaged
by speculation and a tightening of bank credit. At this time, many
people were concerned about the constitutionality of the Second
Bank of the US and debated whether the national government
should support paper money (“soft money” that provided easy
credit) or gold and silver (“hard money” which limited the
money supply).
CARD 5
Government Response:
The bimetallism debate was at the heart of the presidential
election of 1896. Election results proved to be a victory for the
Republican Party and the death of the Populist Party. After the
election, Congress passed the Gold Standard Act which officially
placed the United States on the gold standard and killed the free
silver issue. However, Populists Party ideas like the income tax,
direct election of senators, initiative, referendum, recall, and the
secret ballot were all later enacted by Progressive reformers
Government Response:
During the war, the federal government created innovative ways to
collect federal revenues that are still used today. New taxes, such
as the first income and inheritance tax, were introduced in the war
years, along with new excise taxes. Also, for the first time since the
American Revolution, the federal government printed its own
money, called greenbacks, and took the first steps toward creating
a national regulatory system for banks. Bond drives were organized
to raise money for the war. By the war’s end, the Union raised
about two-thirds of its money through loans, and about a quarter
by increasing tariffs and taxes.
Primary Source: CARD BB
CARD CC
Primary Source:
Primary Source: CARD AA
Primary Source: CARD DD
Primary Source: CARD EE
ANSWER KEY
George Washington
(1789-1797)
CARD D
Economic Situation:
One of the most pressing issues facing the new nation
was the national debt incurred during the Revolutionary
War. When the United States was formed, the federal
government was essentially bankrupt, and its bonds
nearly worthless. States had huge war debts. There was
runaway inflation. In fact, one of the reasons for the
Constitutional Convention of 1789 was Shays’ Rebellion
which was incited by high debts by farmers and was
made worse by the inability of the federal government to
raise money to stop the rebellion
CARD BB
Primary Source:
CARD 3
Government Response:
Federalists like Secretary of the Treasury, Alexander
Hamilton, believed the best way to create a lasting
republic was to give the central government an efficient
system of tax collection and public credit. Hamilton
wanted the federal government to assume, or take over,
and then pay the war debts of the individual states. At
Hamilton’s urging, the government used revenues from
tariffs to pay of federal and state war bonds. The
government chartered a new central bank, the Bank of
the United States, which provided loans to the
government as well as to merchants and other
businesses. Hamilton’s system established the young
nation’s credit and stabilized the American economy
under the direction of a strong national government.
Andrew Jackson
(1829-1837)
CARD E
Economic Situation:
The Second Bank of the United States was chartered in
1816 for a term of 20 years. The BUS was a depository for
federal funds and paid national debts, but it was
answerable only to its directors and stockholders and not
to the American people. The supporters of a central bank
were those involved in industrial and commercial
ventures. They wanted a strong currency and central
control of the economy. The opponents (mostly farmers)
were distrustful of the federal government. Many farmers
had been financially damaged by speculation and a
tightening of bank credit. At this time, many people were
concerned about the constitutionality of the Second Bank
of the US and debated whether the national government
should support paper money (“soft money” that provided
easy credit) or gold and silver (“hard money” which limited
the money supply).
CARD CC
Primary Source:
CARD 1
Government Response:
This American president was the first and only president
to eliminate the national debt. However, his presidency
is more remembered for ordering the premature
removal of the government’s deposits from the Second
Bank of the United States in an attempt to kill it outright.
He appointed a Treasury Secretary who removed and
then deposited the reserves in various state banks
(known as “pet banks” or “wildcat banks”). However, his
victory over the BUS is considered questionable because
this and other policies, such as the Specie Circular of
1836, destabilized the financial system and economy,
rendering them susceptible to shocks. When the US
suffered a banking panic in 1837, the economy slipped
into a severe depression that lasted until 1844. The
resulting decline in government revenues ironically led
to deficits that led to the rebirth of the national debt.
Abraham Lincoln
(1861-1865)
CARD B
Economic Situation:
During the Civil War, the national government faced
extraordinary challenges. Among the challenges was finding
a way to raising $3 billion to fight the Confederacy and pay
for war supplies, soldiers’ pay, new transportation
initiatives, and other war-related expenses. At the time of
the Civil War, the national government did not have a
central bank, a national banking system, a national currency
or a means for collecting internal federal taxes.
CARD AA
Primary Source:
CARD 5
Government Response:
During the war, the federal government created
innovative ways to collect federal revenues that are
still used today. New taxes, such as the first income
and inheritance tax, were introduced in the war years,
along with new excise taxes. Also, for the first time
since the American Revolution, the federal
government printed its own money, called
greenbacks, and took the first steps toward creating a
national regulatory system for banks. Bond drives
were organized to raise money for the war. By the
war’s end, the Union raised about two-thirds of its
money through loans, and about a quarter by
increasing tariffs and taxes.
William McKinley
(1897-1901)
CARD C
Economic Situation:
During the Gilded Age, farmers and western settlers began
to attack the nation’s monetary system. Since 1873,
Congress declared that all federal money must be backed by
gold. This “gold standard” limited the nation's money supply
and benefited the wealthy. Farmers wanted to create
inflation and supported expanding the money supply to
include dollars backed by gold and silver. Bimetallism was
one of the platform issues of the new Populist Party and its
presidential candidate William Jennings Bryan who’s “Cross
of Gold” speech called for the free coinage of silver money.
In addition, America was in the depths of its worst
economic depression until the outbreak of the Great
Depression in 1929.
CARD DD
Primary Source:
CARD 4
Government Response:
The bimetallism debate was at the heart of the
presidential election of 1896. Election results proved to
be a victory for the Republican Party and the death of
the Populist Party. After the election, Congress passed
the Gold Standard Act which officially placed the United
States on the gold standard and killed the free silver
issue. However, Populists Party ideas like the income
tax, direct election of senators, initiative, referendum,
recall, and the secret ballot were all later enacted by
Progressive reformers.
Woodrow Wilson
(1913-1921)
CARD A
Economic Situation:
Since the death of the Second Bank of the United States in
1836, the American financial system was carried out by
state-chartered banks with no federal regulation. As a
result, financial panics plagued the nation, leading to bank
failures and business bankruptcies that severely disrupted
the economy throughout the 19th century and the beginning
of the 20th century. During this time, America experienced a
wave of economic recessions including the Panic of 1857
and Panic of 1873 and a severe economic depression known
as the Panic of 1893. When another recession struck in
1907, this panic persuaded many Americans that their
banking structure was sadly out of date and in need of
major reform. In addition, many Progressive Era reformers
were calling for the return of a central bank to regulate
American monetary policy.
CARD EE
Primary Source:
CARD 2
Government Response:
During the Progressive Era, Congress passed the
Federal Reserve Act. The Federal Reserve System, also
known as "The Fed," is the central bank of the United
States. The Fed is a network of twelve Federal Reserve
district banks and serves as a bank for other banks and
a bank for the federal government. It was created to
provide the nation with a safer, more flexible, and
more stable monetary and financial system. Its two
primary responsibilities include controlling inflation
and unemployment by regulating the nation’s
monetary policy.