The Bank of the US

1. The Bank of the US Jacksonian Era

2. History of the Bank • First Bank of the US • Created in 1791 by Hamilton under the Washington presidency • Remember the Hamilton Plan? • When was the Second Bank of the US created? • 1816 under James Madison • Lasted until 1836 • Its Purpose…? • Establish credit (domestic & foreign) • Hold the country’s money • Create order with the nation’s financial structure

3. Jackson and the Bank • Jackson believed the bank was unconstitutional • Why? • It favored only the rich and made the rich richer • Only states had the right to charter banks, not the federal govt. • Other reasons for disliking the bank of the US • It concentrated too much of the nation’s money in one place • The bank exercised (too much) influence over members of Congress • It favored Northeastern states over Southern or Western states • Jackson disliked Bank President Nicholas Biddle • Biddle came from a wealthy and powerful family • Biddle was the opposite of the “self-made” Andrew Jackson

4. The Bank: The Election of 1832 • Henry Clay (W) and Daniel Webster (W) had a plan to defeat Andrew Jackson in the election of 1832… • They convinced Nicholas Biddle to apply early for an extension of the bank’s charter • Charter: A written grant for authority. • They knew Jackson would VETO the charter application, and they believed that would anger the American people • What Actually Happened… • Biddle applied for the charter & Jackson VETOED it. • The American people supported his VETO and re-elected Jackson • Plan Backfired!

5. The End of the Bank of the US • Jackson’s plan to end the bank • He VETOED the bill to renew the bank’s charter. • Charter expired in 1836 • He ordered the withdrawal of ALL government money from the bank • The money was dispersed among what came to be known as his “pet banks” • PET BANKS: Smaller state banks