{"id":750,"date":"2015-06-22T20:31:27","date_gmt":"2015-06-22T20:31:27","guid":{"rendered":"https:\/\/courses.candelalearning.com\/americanyawp\/?post_type=chapter&p=750"},"modified":"2015-06-22T20:31:27","modified_gmt":"2015-06-22T20:31:27","slug":"the-bank-war","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-ushistory1ay\/chapter\/the-bank-war\/","title":{"raw":"The Bank War","rendered":"The Bank War"},"content":{"raw":"Andrew Jackson\u2019s first term was full of controversy. For all of his reputation as a military and political warrior, however, the most characteristic struggle of his presidency was financial. As president, he waged a \u201cwar\u201d against the Bank of the United States.\r\n\r\nThe charter of the controversial national bank that Congress had established as part of Alexander Hamilton\u2019s financial plan expired in 1811. But five years later, Congress had given a new charter to the Second Bank of the United States. Headquartered in Philadelphia, the bank was designed to stabilize the growing American economy. By requiring other banks to pay their debts promptly in gold, it was supposed to prevent them from issuing too many paper banknotes that could drop suddenly in value. Of course, the Bank of the United States was also supposed to reap a healthy profit for its private stockholders, like the Philadelphia banker Stephen Girard and the New York merchant John Jacob Astor.\r\n\r\nThough many Republicans had supported the new bank, some never gave up their Jeffersonian suspicion that such a powerful institution was dangerous to the republic. Andrew Jackson was one of the skeptics. He and many of his supporters blamed the bank for the Panic of 1819, which had become a severe economic depression. The national bank had made that crisis worse, first by lending irresponsibly and then, when the panic hit, by hoarding gold currency to save itself at the expense of smaller banks and their customers. Jackson\u2019s supporters also believed the bank had corrupted many politicians by giving them financial favors.\r\n\r\nIn 1829, after a few months in office, Jackson set his sights on the bank and its director, Nicholas Biddle. Jackson became more and more insistent over the next three years as Biddle and the bank\u2019s supporters fought to save it. A visiting Frenchman observed that Jackson had \u201cdeclared a war to the death against the Bank,\u201d attacking it \u201cin the same cut-and-thrust style\u201d that he had once fought the Indians and the British. For Jackson, the struggle was a personal crisis. \u201cThe Bank is trying to kill me,\u201d he told Martin Van Buren, \u201cbut I will kill it!\u201d\r\n\r\nThe bank\u2019s charter was not due for renewal for several years, but in 1832, while Jackson was running for re-election, Congress held an early vote to reauthorize the Bank of the United States. The president vetoed the bill.\r\n
\r\n\r\n[caption id=\"attachment_688\" align=\"aligncenter\" width=\"1000\"]\"Political<\/a> \u201cThe bank,\" Andrew Jackson told Martin Van Buren, \"is trying to kill me, but I will kill it!\" That is just the unwavering force that Edward Clay depicted in this lithograph, which praised Jackson for terminating the Second Bank of the United States. Clay shows Nicholas Biddle as the Devil running away from Jackson as the bank collapses around him, his hirelings, and speculators. Edward W. Clay, c. 1832. Wikimedia<\/a>.[\/caption]\r\n\r\n<\/div>\r\nIn his veto message, Jackson called the bank unconstitutional and \u201cdangerous to the liberties of the people.\u201d The charter, he explained, didn\u2019t do enough to protect the bank from its British stockholders, who might not have Americans\u2019 interests at heart. In addition, Jackson wrote, the Bank of the United States was virtually a federal agency, but it had powers that were not granted anywhere in the Constitution. Worst of all, the bank was a way for well-connected people to get richer at everyone else\u2019s expense. \u201cThe rich and powerful,\u201d the president declared, \u201ctoo often bend the acts of Government to their selfish purposes.\u201d Only a strictly limited government, Jackson believed, would treat people equally.\r\n\r\nAlthough its charter would not be renewed, the Bank of the United States could still operate for several more years. So in 1833, to diminish its power, Jackson also directed his cabinet to stop depositing federal funds in it. From now on, the government would do business with selected state banks instead. Critics called them Jackson\u2019s \u201cpet banks.\u201d\r\n\r\nJackson\u2019s bank veto set off fierce controversy. Opponents in Philadelphia held a meeting and declared that the president\u2019s ideas were dangerous to private property. Jackson, they said, intended to \u201cplace the honest earnings of the industrious citizen at the disposal of the idle\u201d\u2014in other words, redistribute wealth to lazy people\u2014and become a \u201cdictator.\u201d\u00a0 A newspaper editor in Maine said that Jackson was trying to set \u201cthe poor against the rich,\u201d perhaps in order to take over as a military tyrant. But Jackson\u2019s supporters praised him. Pro-Jackson newspaper editors wrote that he had kept a \u201cmonied aristocracy\u201d from conquering the people.\r\n\r\nBy giving President Jackson a vivid way to defy the rich and powerful, or at least appear to do so, the Bank War gave his supporters a specific \u201cdemocratic\u201d idea to rally around. More than any other issue, opposition to the national bank came to define their beliefs. And by leading Jackson to exert executive power so dramatically against Congress, the Bank War also helped his political enemies organize.\r\n\r\nIncreasingly, supporters of Andrew Jackson referred to themselves as Democrats. Under the strategic leadership of Martin Van Buren, they built a highly organized national political party, the first modern party in the United States. Much more than earlier political parties, this Democratic Party had a centralized leadership structure and a consistent ideological program for all levels of government. Meanwhile, Jackson\u2019s enemies, mocking him as \u201cKing Andrew the First,\u201d named themselves after the patriots of the American Revolution, the Whigs.\r\n
\r\n\r\n[caption id=\"attachment_692\" align=\"aligncenter\" width=\"1000\"]\"A<\/a> In 1835, Jackson became the first US President on whom an assassination attempt was carried out. While unsuccessful, it became another moment for Jackson to establish his persona as impulsive and passionate when, after the assassin\u2019s gun misfired twice, Jackson beat the man senseless with a cane. Wikimedia<\/a>.[\/caption]\r\n\r\n<\/div>","rendered":"

Andrew Jackson\u2019s first term was full of controversy. For all of his reputation as a military and political warrior, however, the most characteristic struggle of his presidency was financial. As president, he waged a \u201cwar\u201d against the Bank of the United States.<\/p>\n

The charter of the controversial national bank that Congress had established as part of Alexander Hamilton\u2019s financial plan expired in 1811. But five years later, Congress had given a new charter to the Second Bank of the United States. Headquartered in Philadelphia, the bank was designed to stabilize the growing American economy. By requiring other banks to pay their debts promptly in gold, it was supposed to prevent them from issuing too many paper banknotes that could drop suddenly in value. Of course, the Bank of the United States was also supposed to reap a healthy profit for its private stockholders, like the Philadelphia banker Stephen Girard and the New York merchant John Jacob Astor.<\/p>\n

Though many Republicans had supported the new bank, some never gave up their Jeffersonian suspicion that such a powerful institution was dangerous to the republic. Andrew Jackson was one of the skeptics. He and many of his supporters blamed the bank for the Panic of 1819, which had become a severe economic depression. The national bank had made that crisis worse, first by lending irresponsibly and then, when the panic hit, by hoarding gold currency to save itself at the expense of smaller banks and their customers. Jackson\u2019s supporters also believed the bank had corrupted many politicians by giving them financial favors.<\/p>\n

In 1829, after a few months in office, Jackson set his sights on the bank and its director, Nicholas Biddle. Jackson became more and more insistent over the next three years as Biddle and the bank\u2019s supporters fought to save it. A visiting Frenchman observed that Jackson had \u201cdeclared a war to the death against the Bank,\u201d attacking it \u201cin the same cut-and-thrust style\u201d that he had once fought the Indians and the British. For Jackson, the struggle was a personal crisis. \u201cThe Bank is trying to kill me,\u201d he told Martin Van Buren, \u201cbut I will kill it!\u201d<\/p>\n

The bank\u2019s charter was not due for renewal for several years, but in 1832, while Jackson was running for re-election, Congress held an early vote to reauthorize the Bank of the United States. The president vetoed the bill.<\/p>\n

\n
\"Political<\/a><\/p>\n

\u201cThe bank,” Andrew Jackson told Martin Van Buren, “is trying to kill me, but I will kill it!” That is just the unwavering force that Edward Clay depicted in this lithograph, which praised Jackson for terminating the Second Bank of the United States. Clay shows Nicholas Biddle as the Devil running away from Jackson as the bank collapses around him, his hirelings, and speculators. Edward W. Clay, c. 1832. Wikimedia<\/a>.<\/p>\n<\/div>\n<\/div>\n

In his veto message, Jackson called the bank unconstitutional and \u201cdangerous to the liberties of the people.\u201d The charter, he explained, didn\u2019t do enough to protect the bank from its British stockholders, who might not have Americans\u2019 interests at heart. In addition, Jackson wrote, the Bank of the United States was virtually a federal agency, but it had powers that were not granted anywhere in the Constitution. Worst of all, the bank was a way for well-connected people to get richer at everyone else\u2019s expense. \u201cThe rich and powerful,\u201d the president declared, \u201ctoo often bend the acts of Government to their selfish purposes.\u201d Only a strictly limited government, Jackson believed, would treat people equally.<\/p>\n

Although its charter would not be renewed, the Bank of the United States could still operate for several more years. So in 1833, to diminish its power, Jackson also directed his cabinet to stop depositing federal funds in it. From now on, the government would do business with selected state banks instead. Critics called them Jackson\u2019s \u201cpet banks.\u201d<\/p>\n

Jackson\u2019s bank veto set off fierce controversy. Opponents in Philadelphia held a meeting and declared that the president\u2019s ideas were dangerous to private property. Jackson, they said, intended to \u201cplace the honest earnings of the industrious citizen at the disposal of the idle\u201d\u2014in other words, redistribute wealth to lazy people\u2014and become a \u201cdictator.\u201d\u00a0 A newspaper editor in Maine said that Jackson was trying to set \u201cthe poor against the rich,\u201d perhaps in order to take over as a military tyrant. But Jackson\u2019s supporters praised him. Pro-Jackson newspaper editors wrote that he had kept a \u201cmonied aristocracy\u201d from conquering the people.<\/p>\n

By giving President Jackson a vivid way to defy the rich and powerful, or at least appear to do so, the Bank War gave his supporters a specific \u201cdemocratic\u201d idea to rally around. More than any other issue, opposition to the national bank came to define their beliefs. And by leading Jackson to exert executive power so dramatically against Congress, the Bank War also helped his political enemies organize.<\/p>\n

Increasingly, supporters of Andrew Jackson referred to themselves as Democrats. Under the strategic leadership of Martin Van Buren, they built a highly organized national political party, the first modern party in the United States. Much more than earlier political parties, this Democratic Party had a centralized leadership structure and a consistent ideological program for all levels of government. Meanwhile, Jackson\u2019s enemies, mocking him as \u201cKing Andrew the First,\u201d named themselves after the patriots of the American Revolution, the Whigs.<\/p>\n

\n
\"A<\/a><\/p>\n

In 1835, Jackson became the first US President on whom an assassination attempt was carried out. While unsuccessful, it became another moment for Jackson to establish his persona as impulsive and passionate when, after the assassin\u2019s gun misfired twice, Jackson beat the man senseless with a cane. Wikimedia<\/a>.<\/p>\n<\/div>\n<\/div>\n\n\t\t\t

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Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Shared previously<\/div>