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After the economic devastation at the hands of the War of 1812, James Madison signed a 20-year charter for the Second Bank of the United States. The bank was granted branches nationwide, unlike other banks that had their limits within states. The bank was funded with 35 million upon its introduction to the nation. The bank could process tax payments, redeem and issue government debt, hold federal deposits, and issue banknotes. It was established to regulate credit from private banks.
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The Panic of 1819 refers to the financial crisis caused by the collapse of cotton prices and the policies of the Second Bank. It was the first depression the American public experienced, watching agricultural prices drop and businesses fail.
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Following the resignation of the previous bank president, Nicholas Biddel takes the position as the third President, shaping the bank into a central institution. Under his leadership, the bank expanded to 29 branches across the nation. Biddle, along with Henry Clay and others, opposed Andrew Jackson, who opposed the rechartering of the US Second Bank. Jackson vetoed the recharter, therefore leading to Biddle defending the institution by tightening credit.
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Jackson was inaugurated in Washington, D.C, where his inauguration attracted his informal crowd, since he was known as the man of the people. This inauguration marked the beginning of his two terms. Jackson played his role in the Bank War as the adversary to the United States Bank, successfully vetoing it.
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Biddle and Clay issued a recharter of the Second United States Bank for fear of its reissue being ignored. They argue it was required for the regulation of state credit, but it faced serious opposition, especially after the Panic of 1819.
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In response to the recharter of the Second Bank of the United States, Andrew JAckosn, the president of the time, vetoed it, deeming it unconstitutional and labeling it a monster. He said this due to his belief that the institution favoured the rich and only made them richer, leaving the common folk poorer.
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This was the first use of national conventions; both the Democratic and Republican parties held their conventions in Baltimore. The main issue during the conventions was the Bank War. The candidates were Andrew Jackson and Henry Clay. Andrew Jackson won with 219 to 49 electoral votes, going on to serve his second 4-year term. This meant democratic dominance in national offices with the leadership of Andrew Jackson.
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The term pet banks refers to the state banks chosen by Andrew Jackson to receive government funds, which led to the failure of the Second Bank recharter. The ones who specifically gave these surplus funds to the loyal state banks were the Department of the Treasury.
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This was the party composed of adversaries opposing Andrew Jackson and his policies. They believed in modernization, protective tariffs on the economy, and strong national government powers. This party was composed of previous national Republicans, Anti-Masons, and cautious democrats.
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With the circulation of a vast amount of paper money, Andrew Jackson issued the Specie Circular of 1836, which required the use of silver or gold for government payments. This led to a defaming environment, which is said to have contributed to the Panic of 1837.
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The Panic of 1837 refers to the financial crisis that lasted till the mid 1940s. It's said to have occurred due to changes in the banking system done so by Andrew Jackson, including the Specie Circular.
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The two political parties in this election were the Whigs, led by Henry Clay, and the Democrats, led by Martin van Buren. The primary issue was the charter of the United States Bank. Due to the previous financial crisis, like the Panic of 1837, Buren wasn't a popular candidate, leading to the Whig Party's popularity among the citizens. The results declared Henry Clay the victor with 234 out of 294 electoral votes.