JACKSON AND JACKSON AND THE BANK WARTHE BANK WAR

On economic issues, against On economic issues, against concentrating power either in concentrating power either in

federal government or federal government or powerful institutions (like the powerful institutions (like the

bank)bank)

Biddle’s InstitutionBiddle’s Institution Nicolas Biddle - President of the Nicolas Biddle - President of the

BankBank Branches in 29 cities-Branches in 29 cities-

headquarters Philadelphiaheadquarters PhiladelphiaMost powerful and widespread Most powerful and widespread institution in the nationinstitution in the nation

By law, only place gov’t could By law, only place gov’t could deposit its fundsdeposit its funds

FunctionsFunctions of Bank of Bank

Credit to Credit to businessbusiness

Issued bank Issued bank notesnotes

Exercised Exercised control on control on state banksstate banks

Opposition to BankOpposition to Bank ““soft money”—wanted more currency soft money”—wanted more currency

in circulation, little gold or silver in circulation, little gold or silver backing.backing.

mainly state bankers (Bank of US mainly state bankers (Bank of US prevented state banks from issuing prevented state banks from issuing notes freely)notes freely)

““hard money”—gold and silver ONLY hard money”—gold and silver ONLY basis for moneybasis for money

(bank of U.S. did issue some banks (bank of U.S. did issue some banks notes)notes)

Jackson favored specie onlyJackson favored specie only

Jackson’s PositionJackson’s Position

Jackson supported hard money Jackson supported hard money position (looked with suspicion on position (looked with suspicion on expansion and speculation)expansion and speculation)

As president also sensitive to soft As president also sensitive to soft money supporters in West and money supporters in West and SouthSouth

He would NOT support He would NOT support rechartering bank (1836)rechartering bank (1836)

Biddle’s PositionBiddle’s PositionNot a politicianNot a politicianGranted favors to politicians Granted favors to politicians

(like Webster and Clay) that (like Webster and Clay) that he thought could help himhe thought could help him

Biddle et al ask Congress to Biddle et al ask Congress to pass bill to recharter in 1832pass bill to recharter in 1832

Wanted to make an election Wanted to make an election issue of itissue of it

Congress passes the renewalCongress passes the renewal““The bank, Mr. Van Buren, is The bank, Mr. Van Buren, is trying to kill me. But I will kill trying to kill me. But I will kill it.”it.”

Jackson vetoes itJackson vetoes it Becomes an issueBecomes an issue Clay defeated for Presidency in Clay defeated for Presidency in

18321832AJ 219AJ 219Clay 49Clay 49

Destruction of BankDestruction of Bank Beginning in 1833, AJ began to Beginning in 1833, AJ began to

withdraw all government depositswithdraw all government deposits Secretary of Treasury wouldn’t do Secretary of Treasury wouldn’t do

ititAJ fired himAJ fired himNew one said no, he got firedNew one said no, he got firedFinally appointed Roger B. TaneyFinally appointed Roger B. Taney—he began to put gov’t money in —he began to put gov’t money in “pet banks”“pet banks”

Biddle’s ResponseBiddle’s Response Began to call in loans and raise Began to call in loans and raise

interest ratesinterest ratesCause financial distressCause financial distress

Hope short recession would cause Hope short recession would cause Congress to recharter bankCongress to recharter bank

““Nothing but the evidence of Nothing but the evidence of suffering would produce any effect suffering would produce any effect in Congress.” Biddlein Congress.” Biddle

This is now a personal struggle This is now a personal struggle between 2 strong menbetween 2 strong men

The ENDThe END

1833-1834—supporters of Bank 1833-1834—supporters of Bank blame AJ for recessionJacksonians blame AJ for recessionJacksonians blame Biddleblame Biddle““Go to Biddle”…AJGo to Biddle”…AJSupporters lost patienceSupporters lost patienceBiddle forced to grant credit in Biddle forced to grant credit in abundanceabundanceHE lost this battle!HE lost this battle!Jackson lost the warJackson lost the war