Download Jackson v. Bank of the United States

Jackson and the Second Bank of the United States
by Robert McNamara
19th Century Historian
#1 - Definition:
The Bank War was a long and bitter struggle waged by President Andrew Jackson in
the 1830s against the Second Bank of the United States, a federal institution which
Jackson sought to destroy. Jackson's stubborn skepticism about banks escalated into a
highly personal battle between the president of the United States and the president of
the bank, Nicholas Biddle. The Bank War created conflicts which resonated for years.
Jackson's campaign against the Second Bank of the United States did ultimately cripple
the institution.
#2 - Background on the Second Bank of the United States
The Second Bank of the United States was chartered in April 1816, in part to manage
debts the federal government had taken on during the War of 1812. The bank filled a
void left when the Bank of the United States, which had been created by Alexander
Hamilton, did not have its 20-year charter renewed by Congress in 1811. Various
scandals and controversies plagued the Second Bank of the United States in the first
years of its existence, and it was blamed for helping to cause the Panic of 1819, a major
economic crisis in the United States. By the time Andrew Jackson became president in
1829, the problems of the bank had been rectified. The institution was headed by
Nicholas Biddle, who, as bank president, exercised considerable influence over the
financial affairs of the nation. Jackson and Biddle clashed repeatedly, and cartoons of
the time depicted them in a boxing match, with Biddle cheered on by city dwellers as
frontiersmen rooted for Jackson.
#3 - The Controversy Over Renewing the Charter of the Second
Bank of the United States
By most standards the Second Bank of the United States was doing a good job of
stabilizing the nation's banking system. But Andrew Jackson viewed it with resentment,
considering it a tool of an economic elite in the East that took unfair advantage of
farmers and working people. The charter for the Second Bank of the United States
would expire, and thus be up for renewal, in 1836. However, four years earlier, in 1832,
prominent senator Henry Clay pushed forward a bill that would renew the bank's
charter. The charter renewal was a calculated political move. If Jackson signed the bill
into law, it might alienate voters in the West and South and jeopardize Jackson's bid for
a second presidential term. If he vetoed the bill, the controversy might alienate voters in
the Northeast. Andrew Jackson vetoed the renewal of the charter of the Second Bank
of the United States in dramatic fashion. He issued a lengthy statement on July 10,
1832 providing the reasoning behind his veto.
Along with his arguments claiming the bank was unconstitutional, Jackson unleashed
some blistering attacks, including this comment near the end of his statement:
"Many of our rich men have not been content with equal protection and equal
benefits, but have besought us to make them richer by act of Congress."
Henry Clay ran against Jackson in the election of 1832. Jackson's veto of the bank's
charter was an election issue, but Jackson was reelected by a wide margin.
#4 - Andrew Jackson Continued His Attacks on the Bank
At the beginning of his second term, believing he had a mandate from the American
people, Jackson instructed his treasury secretary to remove assets from the Second
Bank of the United States and transfer them to state banks, which became known as
"pet banks." Jackson's war with the bank placed him in bitter conflict with the bank's
president Nicholas Biddle, who was as determined as Jackson. The two men sparred,
sparking a series of economic problems for the country. In 1836, his last year in office,
Jackson issued a presidential order known as the Species Circular, which required that
purchases of federal lands (such as lands being sold in the West) be paid for in cash
(which was known as "species"). The Species Circular was Jackson's last major move
in the bank war, and it did succeed in virtually ruining the credit system of the Second
Bank of the United States. The clashes between Jackson and Biddle likely contributed
to the Panic of 1837, a major economic crisis which impacted the United States and
doomed the presidency of Jackson's successor, Martin Van Buren.
Questions
Refer to the paragraph number provided to find the necessary information.
1 - Paragraph #1 – What is the definition of “Bank War?”
2 - Paragraph #2 – Why was the Second Bank of the United States chartered and
created?
3 - Paragraph #2 – What is the definition of the word rectified?
A. Proposed
B. Corrected
C. Vilified
D. Injured
4 - Paragraph #2 – Who was Nicholas Biddle and what was his importance with the
Second Bank of the United States?
5 - Paragraph #3 – Which of the following sentences supports Jackson’s view of the
Bank?
A. The Second Bank of the United States was chartered in April 1816, in part to
manage debts the federal government had taken on during the War of 1812.
B. By most standards the Second Bank of the United States was doing a good job
of stabilizing the nation's banking system.
C. A tool of an economic elite in the East that took unfair advantage of farmers and
working people.
D. Exercised considerable influence over the financial affairs of the nation
6 - Paragraph #3 – Why did Henry Clay push to recharter the Bank in 1832, four years
before the charter was to expire?
7 - Paragraph #4 – What did Jackson order his Treasury Secretary to do with the Bank’s
funds after the presidential election of 1832?
8 - Paragraph #4 – Which of the following sentences describes Species Circular?
A. Paper money policy to encourage the sale of western lands
B. Use of copper as currency to counter the Bank’s use of gold and silver
C. A play on words to describe the pet banks created by Jackson
D. Need to use gold and silver cash to purchase western lands
9 - Paragraph #4 – How did Jackson’s Bank War doom the presidency of his successor,
Martin Van Buren?