The War Against the Bank [ushistory.org] (2024)

FAQs

What was Jackson's Bank War against the National bank briefly describe? ›

The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its replacement by state banks.

The Bank War was the name given to the campaign Andrew Jackson began in 1832 to decentralize, and eventually dissolve, the Bank of the United States.

Moreover, he was politically inept, overplaying his hand at pivotal moments of his struggle with Jackson. Biddle exasperated the president by his repeated refusal to seriously investigate charges of political interference by some Bank branches during the 1828 elections.

Not everyone agreed with Hamilton's plan. Thomas Jefferson was afraid that a national bank would create a financial monopoly that might undermine state banks and adopt policies that favored financiers and merchants, who tended to be creditors, over plantation owners and family farmers, who tended to be debtors.

This bill passed Congress, but Jackson vetoed it, declaring that the Bank was "unauthorized by the Constitution, subversive to the rights of States, and dangerous to the liberties of the people." After his reelection, Jackson announced that the Government would no longer deposit Federal funds with the Bank and would ...

The war over the bank did have consequences, including the financial panic of 1837. The panic had many causes, and like most financial crises, was the result of a complicated series of events.

Jackson opposed renewing the charter of the BUS because he opposed concentrating power either in the federal government or in the powerful/aristocratic institutions associated with it.

In 1836, the bank would die, or cease to be national bank, if not rechartered by congress. Clay, Webster, and others convinced Nicholas Biddle, the bank's President that it could be rechartered in 1832 with the present congress, and Jackson's need (so they though) to avoid the issue in order to be re-elected.

Bank War, in U.S. history, the struggle between President Andrew Jackson and Nicholas Biddle, president of the Bank of the United States, over the continued existence of the only national banking institution in the nation during the second quarter of the 19th century.

Panic of 1837

The charter of the Second Bank of the United States expired in 1836, and a defeated Biddle accepted an offer from Pennsylvania to turn it into a state-chartered bank. With the removal of the Bank as a regulating force, state banks began printing currency and lending money in exorbitant amounts.

How did Jackson's Bank War change the United States economy? ›

The most major effect of the Bank War of 1832 was inflation throughout the United States. It also resulted in periodic economic panics that only ceased in 1913 with the creation of the Federal Reserve.

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 “democratic” idea to rally around. More than any other issue, opposition to the national bank came to define their beliefs.

Jackson's distrust of the Bank was also political, based on a belief that a federal institution such as the Bank trampled on states' rights. In addition, he felt that the Bank put too much power in the hands of too few private citizens -- power that could be used to the detriment of the government.

The process of removing the federal government's deposits from the Bank was disastrous, and competition between the “pet” state banks who took on the responsibilities of the dying Bank reignited the problems of exchange rates and inflation that had plagued American money before the Bank's reestablishment.

The Democratic-Republicans argued that, even if a national bank would be of benefit to the country, nowhere in the Constitution does it specify that the federal government is allowed to be in the banking business. But the Constitution does say that any power not specified in the Constitution is delegated to the states.

Beyond characterizing the bank as hopelessly corrupt, he argued "the powers conferred upon [the bank were] ... not only unnecessary, but dangerous to the Government and the country." He went on, warning that if it continued to operate, "great evils... might flow from such a concentration of power in the hands of a few ...

Bank War, in U.S. history, the struggle between President Andrew Jackson and Nicholas Biddle, president of the Bank of the United States, over the continued existence of the only national banking institution in the nation during the second quarter of the 19th century.

Andrew Jackson opposed the National Bank b/c he thought it was unconstitutional and it gave too much economic power to capitalists. Also, the National Bank could control the state banks.

The bank's charter was unfair, Jackson argued in his veto message, because it gave the bank considerable, almost monopolistic, market power, specifically in the markets that moved financial resources around the country and into and out of other nations.