Jackson's Bank War

Date: 1832

• President Jackson distrusted monopolies and big businesses, and was against the Bank of the United States. Jackson thought of the bank as a monster because it was almost like a branch of government: principal depository for the funds of the Washington government, controlled much of nation's gold and silver, its notes were stable in value, and the bank was a part of the nation's expanding economy. But the bank was a private institution, accountable not to the people, but to the elite investors. Bank president, Nicholas Biddle, held a ton of power over the nation's financial affairs.
• Bank also gained enemies in the West by foreclosing on farms. Profit was their main objective.
• The Bank War erupted in 1832, when Daniel Webster and Henry Clay presented Congress a bill to renew charter of the Bank of the United States (they wanted to make it an election issue). If Jackson signed for the bank, he would lose his western followers. If he vetoed it, he would presumably lose the presidency by alienating the wealthy and influential groups in the East. But what Clay didn't realize, was that these people were now a minority.
• Bank recharter went through Congress, but Jackson vetoed it.
• Election of 1832 Jackson vs. Clay, Jackson easily won (idol of the masses).
• Jackson determined his winning the election as a mandate to squash the bank. Jackson decided to bury the bank for good by depositing no more funds into the bank and gradually shrinking existing deposits by using them to for day-to-day expenses of the government (he would slowly bleed the bank dry). He had to switch around the cabinet twice until he could find a secretary of Treasury who would do this (Taney).
• The death of the bank left "pet banks" (Jackson's bitches) to hold federal funds, stuff got confusing, and paper money lost its value, since each bank had different currency. Jackson passed Specie Circular: required all public lands to be purchased with metallic money. This led to the economic Panic of 1837
• Significance: Destroying the bank raised the question of constitutionality, and Jackson overstepping his boundaries. Was he a president or a dictator? Was he a Jackson or a Jackass? (how dare he squash Hamilton's bank!) Also, this event (along with Jackson's other policies) led to the formation of the Whig party (opposition to the monarchy). They were a loose party, and in some cases the only thing they had in common was hating Jackson.