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The Second Bank of the U.S. was created after the economic damage that the War of 1812 had cause America. The first national bank had ended in 1811 so they had not had a central bank for about 4-5 years, so the supporters of the second national bank hoped that it would provide stability by providing and regulating currency, help recover from the debt that the war had caused, and to support industry. -
The Panic of 1819 was the first economic depression that caused unemployment, failing of the banks, foreclosure on mortgages, and the collapse of agricultural prices. This depression was caused by a decline in cotton prices, Congress requiring hard-currency for land payments, the closing of factories, and the second national bank restricting and tightening credit. This would cause the public to trust the federal governments economic policies less and to elect someone like Andrew Jackson. -
Elected by the Banks board of directors in 1823, Biddle took over the bank during a time of recovery, as it was still recovering from the Panic of 1819. Biddle expanded credit, regulated the money supply by controlling the amount of state dollars, helped control state banks to provide stability, and even funding state banks to avoid any national crisis. He was a good administrator who oversaw the 29 branches of the bank and used resources correctly to get the best out of the bank. -
The Election of 1828 was between President John Quincy Adams against Democratic nominee Andrew Jackson. Jackson won, beginning the Jacksonian era that would last until the election of 1840. His victory which was helped by the anger behind the “corrupt bargain”, and with his heroics from the War of 1812, set the stage for the Bank War as he opposed the national bank. His policies helped to lead to the creation of the Whig Party in 1834 which would eventually end the era of Jacksonian democrats. -
The recharter of the Second Bank of the U.S. was pushed by Jackson’s opponents in Congress to lessen his chances to win the 1832 election. The bank’s first charter expired in 1836, but an early recharter forced Jackson to either veto it, risking losing support from the public in the upcoming election, or approve it, extending the bank’s power and its duration. Senator Henry Clay, Daniel Webster, and Bank President Nicholas Biddle led the push for the recharter, ending with Jacksons veto. -
The Bank Veto Message was Jackson’s veto of Congress’s early attempt to recharter the Second Bank before the 1832 election in order to decrease his support with the public. As Jackson was a western farmer, he opposed it as unconstitutional, undemocratic, and favoring the wealthy. Jackson argued it gave the Bank too much power, benefitted foreigners more than the average American citizen, and violated his vision of democracy, even though McCulloch v. Maryland had upheld its constitutionality. -
The Election of 1832 saw incumbent President Andrew Jackson defeat Henry Clay, the National Republican nominee, in a landslide. Clay and his allies in Congress had pushed for an early renewal of the Bank’s charter, hoping to weaken Jackson’s support but the plan didn't work, as Jackson’s victory strengthened his goal of continuing to weaken the Bank. Believing that the win was approval for his policy on the bank, Jackson moved to remove federal deposits and end funding for the Second Bank. -
In response to Jackson removing federal funds from the bank, the president of the bank Nicholas Biddle, who had been in charge since 1823, decided to intentionally harm the economy to hopefully get Jackson to go back and return the federal funds. Biddle limited the banks loans and called in debts, which ultimately caused an economic recession worse than Biddle had hoped for, causing anti-bank sentiment to rise, also helping the bank not be rechartered once its original charter ran out in 1836. -
After winning reelection in 1832, Jackson believed that his victory in the election confirmed public support for his anti-bank policies, so he continued to weaken it by removing all federal funds from the bank, and adding them into "pet banks". The move caused inflation and instability, contributing to the Panic of 1837 under then President Van Buren. It also led to Jackson becoming the first and only president censured by the Senate under Henry Clay’s leadership. -
The Specie Circular was the name of a Jackson executive order that required all transactions of public lands to be done using gold or silver. Jackson signed this order into law in order to control the amount of paper money that had been flooding the markets and to decrease the amount of land speculation that was happening out west after the Indian Removal Act. The Specie Circular helped lead to the Panic of 1837 as hard currency was required for land purchase so its demand increased. -
The Panic of 1837 was a five-year depression, regarded as worse than the one in 1819, caused by easy credit, land speculation, and rapid growth. Jackson’s Specie Circular and bank veto worsened it by requiring hard currency to purchase land and weakening the national bank. President Van Buren continued Jacksonian policies, limiting government response and worsening the impact. In 1840, he signed the Independent Treasury Act in response to the panic, separating federal funds from private banks. -
The Election of 1840 ended the Jackson-Buren era by losing to Whig candidate William Henry Harrison. The Whig party had recently formed in 1834 and was the opposing party to the Jacksonian Democrats that had held power for more than a decade. They had formed to unite against "King Jackson" as they believed that he was a tyrannical leader. They won majority in Congress and the presidency, which would have helped them implementing their policies but President Harrison died a month later.