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Bank Recharter Bill
The Second Bank of the United States' charter was set to expire in 1836, but Daniel Webster and Henry Clay proposed to recharter it early in order to put Andrew Jackson on shaky ground. Andrew Jackson vetoes the bill of re-chartering arguing that it was incompatible with “justice,” “sound policy” and the Constitution. This angered his enemies (Clay, Webster, Biddle). Some thought he was abusing his executive power, but supporters of Jackson were glad because he was fighting for the "common man." -
Election of 1832
Jackson ran for re-election against Clay in the election of 1832. He focused on getting rid of or "killing" the national bank, while Clay promised to support it. Once again, the opinions of the country were divided. Jackson was reelected by an "overwhelming majority", and he was free to act on the issue of the bank. The primary issue was Jackson's veto of the recharter of the U.S. Bank, which he considered a monopoly. This was the first election with a national nominating convention -
Jackson Removes Federal Deposits (September 10, 1833)
After issuing his veto against the Second Bank of the United States, Jackson continued his attack against the bank by issuing the removal of federal deposits. Secretary of Treasury Taney continued to draw on government's accounts in the national bank, but deposit all new federal receipts in state banks. The state banks that received these deposits were called "pet banks". The national bank collapsed at a rate that would lead the country into an economic crisis.. -
Biddle's Response
In response too losing federal funds, Nicholas Biddle began taking actions to recharter the national bank. Biddle attempted to keep the bank alive in spite of Jackson's efforts and spoke out and started to demand that loans be payed back immediately. He started presenting state bank notes for redemption, calling in loans, and generally contracting credit. Congress voted to recharter the bank, but Jackson vetoed. Federal deposits were not returned and the charter expired in 1836. -
Specie Circular (Coinage Act)
The Specie Circular was an executive order issued by President Jackson in 1836. It required payment for public lands be in gold and silver specie or certain sound money. This led to a drastic decline in the value of paper money. It also eventually lead to an economic down fall known as the Panic of 1837. This was due to the State Banks passing out bad loans they could not pay off and the sale of public lands that sharply went down. -
Panic of 1837
When Jackson was president, many state banks received government money that had been withdrawn from the Bank of the U.S. and issued paper money, which raised wild speculation, especially in federal lands. Jackson issued the Specie Circular to force the payment for federal lands with gold or silver and as a result many state banks collapsed and the panic of 1837 arose. Bank of the U.S. failed, cotton prices fell, businesses went bankrupt, and a widespread of unemployment and distress happened.