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JACKSON AND THE BANK WAR

JACKSON AND THE BANK WAR. On economic issues, against concentrating power either in federal government or powerful institutions (like the bank). Biddle’s Institution. Nicolas Biddle - President of the Bank Branches in 29 cities-headquarters Philadelphia

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JACKSON AND THE BANK WAR

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  1. JACKSON AND THE BANK WAR On economic issues, against concentrating power either in federal government or powerful institutions (like the bank)

  2. Biddle’s Institution • Nicolas Biddle - President of the Bank • Branches in 29 cities-headquarters Philadelphia • Most powerful and widespread institution in the nation • By law, only place gov’t could deposit its funds

  3. Functions of Bank • Credit to business • Issued bank notes • Exercised control on state banks

  4. Opposition to Bank • “soft money”—wanted more currency in circulation, little gold or silver backing. mainly state bankers (Bank of US prevented state banks from issuing notes freely) • “hard money”—gold and silver ONLY basis for money • (bank of U.S. did issue some banks notes) • Jackson favored specie only

  5. Jackson’s Position • Jackson supported hard money position (looked with suspicion on expansion and speculation) • As president also sensitive to soft money supporters in West and South • He would NOT support rechartering bank (1836)

  6. Biddle’s Position • Not a politician • Granted favors to politicians (like Webster and Clay) that he thought could help him • Biddle et al ask Congress to pass bill to recharter in 1832 • Wanted to make an election issue of it

  7. Congress passes the renewal • “The bank, Mr. Van Buren, is trying to kill me. But I will kill it.” • Jackson vetoes it • Becomes an issue • Clay defeated for Presidency in 1832 • AJ 219 • Clay 49

  8. Destruction of Bank • Beginning in 1833, AJ began to withdraw all government deposits • Secretary of Treasury wouldn’t do it • AJ fired him • New one said no, he got fired • Finally appointed Roger B. Taney—he began to put gov’t money in “pet banks”

  9. Biddle’s Response • Began to call in loans and raise interest rates • Cause financial distress • Hope short recession would cause Congress to recharter bank • “Nothing but the evidence of suffering would produce any effect in Congress.” Biddle • This is now a personal struggle between 2 strong men

  10. The END • 1833-1834—supporters of Bank blame AJ for recessionJacksonians blame Biddle • “Go to Biddle”…AJ • Supporters lost patience • Biddle forced to grant credit in abundance • HE lost this battle! • Jackson lost the war

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