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Th First National Bank
The first National Bank of the US was created by Alexander Hamilton to help create a national currency, deposit government receipts, create short term loans for the government, etc. The bank had a 20 year charter that would last until 1811. -
The Rejection for Renewal
In 1811, the renewal of the charter for the first National Bank was rejected. For the next few years states controlled banks. The effects of this were major inflation and confusion on what to do. -
The Second National Bank
In 1816, a new national bank was formed to help calm the country down and help bring back normalcy. The bank was very similar to the first, and it too had a charter for 20 years. This bank was a lot more criticized though, especially by newer states and farmers, who feared it only helped the wealthy and powerful. -
Veto of Early Renewal
In 1832, the Second National Bank applied for an early renewal of its charter (four years early). While it was passed in both houses of Congress, President Jackson vetoed the renewal. Jackson explained his reasoning in a speech, but the key points were that the bank was dangerous to the people, the states, and the Constitution. -
Biddle's Plan
Expecting President Jackson was up to destroy the bank, President of the Bank Nicholas Biddle created a plan. His plan was to basically create a financial crisis, so that the country would believe it needed the National Bank. This plan involved contracting credit among other things. His plan however, failed to work and actually undermined any chance of the bank getting renewed. -
Withdraw of Funds
In 1833, against the advice of many government figures, Jackson withdrew all federal funds to the Bank. He took that money and gave it to 23 smaller banks run by the states. The reason why he did this was to make sure the bank would not be renewed in 1836. -
Rejection for Renewal P2
In 1836, the Second Nation Bank was not renewed for its charter and was dissolved. Jackson had won the "Bank War" .
