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The Clash of Titans: Jackson vs. Biddle and the Battle Over the Bank of the United States

The conflict between President Andrew Jackson and Nicolas Biddle, the head of the Second Bank of the United States, marked a crucial chapter in American economic history. Jackson championed a hard money policy, opposing the rechartering of the Bank, which he viewed as a concentration of financial power that undermined democracy. Biddle sought to maintain the Bank's dominance by appealing to Congress. The struggle led to a series of political confrontations, culminating in Jackson's withdrawal of government deposits and Biddle's financial maneuvers, which prompted an economic recession. Ultimately, the battle showcased differing visions of America's financial future.

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The Clash of Titans: Jackson vs. Biddle and the Battle Over the Bank of the United States

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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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