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After the War of 1812, Americans realized they needed a bank due to their financial struggles. This led James Madison to recharter the national bank in 1816. The bank handled all of the monetary transactions of the U.S. government, and its primary function was to regulate the public credit distributed by private banks. Despite being chartered a second time, it would not be renewed a third, with its charter running out in 1836.
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Jackson heavily opposed the National Bank and believed that it was a corrupt organization. Congress tried to have the bank recharted prematurely and sent the bill to Jackson. In response, Jackson refused the sign the bill and sent it back, stating that he chose to veto the bill because he found it to be unconstitutional.
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In an attempt to weaken the bank further, Jackson withdrew all deposits from the national bank and put them in state banks. This destroyed the bank both financially and politically. After this, any federal revenue was diverted into private banks selected by executive order.
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Nicholas Biddle was the president of the National Bank. In an attempt to drive the public against Jackson and recharter the bank, he reduced loans and called in any debts. Many businesses and individuals did not have the funds to pay these debts, and Biddle's actions resulted in a short-lived financial crisis.
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The Specie Circular was an executive order made by Jackson demanding that public land be purchased in gold and silver. Investors from foreign countries did not want to accept American currency and began to call in their loans. Banks rushed to withdraw the funds they'd been loaned but did not have enough resources. This caused many banks to shut down, and resulted in an economic crash. This hurt the working class people of the United States.
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The Panic of 1837 was a significant economic crash that resulted in the closing of many banks and rises in unemployment. After the Specie Circular, funds were being withdrawn from banks rapidly. The banks did not have enough resources to satisfy their customers, and stopped redeeming notes, eventually shutting down. This, along with a decline in cotton prices and an increase in interest rates in Britain, led to the financial crisis.
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Jackson’s successor, Martin Van Buren, proposed the independent treasury system, which kept federal funds out of banks. This was repealed after he lost the election against William Henry Harrison in 1840. With the transfer of power after the election of 1840, Jackson's battle with the National Bank came to a close.