The Banking Controversy: The Bank War

411 Words2 Pages
The banking controversy of the 1830’s became known as The Bank War. It was a campaign started by Andrew Jackson in 1833 to destroy the Second Bank of the United States. He believed that his opposition to the bank had won him national support during his reelection campaign. The Second Bank had been created in 1816 as a successor to the First Bank, whose charter had previously expired. The Second Bank was chartered only for a term of twenty years due to the concerns of many people in Congress. The Bank was to act as a depository for federal funds and paid national debts, but it was answerable only to the directors and stockholders. The supporters of this bank were mainly people involved in the industrial and commercial ventures. On the other…show more content…
Jackson had been financially damaged a tightening of bank credit early in his business career. He had a strong distrust of financial institutions throughout the rest of his life. At first, Jackson didn’t really pick a side on the bank issue. He was, however, concerned about the constitutional rights involved in the idea of paper money replacing gold and silver. In January of 1832 Biddle’s supporters in Congress introduced the Bank re-charter legislation. They believed that the current Congress would re-charter the bank and they believed that Jackson wouldn’t risk the loss of votes in vetoing the Bank. Jackson’s hatred for the bank became more of an obsession. Jackson vetoed the Bank Re-charter Bill, and ordered the federal government’s deposits removed from the Bank and placed in state banks. These state banks were privately owned and it led to large inflation and the Panic of 1837. The inflation caused by this is held responsible for the government holds and laws regarding national and private banks. Jackson and Henry Clay argued quite a bit. Clay strongly advised Congress that they should renew the bank charter. He claimed that the country was in the middle of a revolution, although not yet a bloody one. He also claimed that Jackson had all of the power and that if Congress did not act the government would fail. Clay asked that the senate impeach Jackson, accusing him of abusing the constitution and the nation’s laws. The people of the United States blamed Biddle for the banking crisis and Jackson won the
Open Document