JACKSON AND THE BANK WAR

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JACKSON AND THE BANK WAR

• On economic issues, against concentrating power
  either in federal government or powerful
  institutions (like the bank)

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Biddles Institution

• Nicolas Biddle - President of the Bank
• Branches in 29 cities-headquarters Philadelphia
• Most powerful and widespread institution in the
  nation
• By law, only place govt could deposit its funds

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Functions of Bank

• Credit to business
• Issued bank notes
• Exercised control on state banks

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Opposition to Bank

• soft moneywanted more currency in circulation,
  little gold or silver backing.
• mainly state bankers (Bank of US prevented
  state banks from issuing notes freely)
• hard moneygold and silver ONLY basis for money
• (bank of U.S. did issue some banks notes)
• Jackson favored specie only

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Jacksons Position

• Jackson supported hard money position (looked
  with suspicion on expansion and speculation)
• As president also sensitive to soft money
  supporters in West and South
• He would NOT support rechartering bank (1836)

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Biddles Position

• Not a politician
• Granted favors to politicians (like Webster and
  Clay) that he thought could help him
• Biddle et al ask Congress to pass bill to
  recharter in 1832
• Wanted to make an election issue of it

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• Congress passes the renewal
• The bank, Mr. Van Buren, is trying to kill me.
  But I will kill it.
• Jackson vetoes it
• Becomes an issue
• Clay defeated for Presidency in 1832
• AJ 219
• Clay 49

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Destruction of Bank

• Beginning in 1833, AJ began to withdraw all
  government deposits
• Secretary of Treasury wouldnt do it
• AJ fired him
• New one said no, he got fired
• Finally appointed Roger B. Taneyhe began to put
  govt money in pet banks

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Biddles Response

• Began to call in loans and raise interest rates
• Cause financial distress
• Hope short recession would cause Congress to
  recharter bank
• Nothing but the evidence of suffering would
  produce any effect in Congress. Biddle
• This is now a personal struggle between 2 strong
  men

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The END

• 1833-1834supporters of Bank blame AJ for
  recessionJacksonians blame Biddle
• Go to BiddleAJ
• Supporters lost patience
• Biddle forced to grant credit in abundance
• HE lost this battle!
• Jackson lost the war