Jackson Vetoes Rechartering of the Bank of the United States Summary

  • Last updated on November 10, 2022

Andrew Jackson’s impassioned campaign against rechartering the national bank succeeded and had the result of helping to spur a period of economic growth and spiraling inflation.

Summary of Event

If the importance of political events is measured by the intensity of feeling aroused and the vigorous debate engendered among contemporaries, then Andrew Jackson’s war against the Second Bank of the United States stands out as one of the critical issues of the antebellum period of American history. It is a comparatively simple task to describe the sequence of events that led to the destruction of the bank and to list the people involved on both sides of the struggle. It is difficult, however, to explain motivations, such as why Jackson unleashed such a violent attack, what the motives of his supporters were, and why Nicholas Biddle, the bank’s president, took up the challenge when he did. It is also necessary to consider the net effect of the struggle on the nation. Bank of the United States;and Andrew Jackson[Jackson] Jackson, Andrew [p]Jackson, Andrew;and Bank of the United States[Bank of the United States] Banking law, U.S. Biddle, Nicholas [kw]Jackson Vetoes Rechartering of the Bank of the United States (July 10, 1832) [kw]Vetoes Rechartering of the Bank of the United States, Jackson (July 10, 1832) [kw]Rechartering of the Bank of the United States, Jackson Vetoes (July 10, 1832) [kw]Bank of the United States, Jackson Vetoes Rechartering of the (July 10, 1832) [kw]United States, Jackson Vetoes Rechartering of the Bank of the (July 10, 1832) Bank of the United States;and Andrew Jackson[Jackson] Jackson, Andrew [p]Jackson, Andrew;and Bank of the United States[Bank of the United States] Banking law, U.S. Biddle, Nicholas [g]United States;July 10, 1832: Jackson Vetoes Rechartering of the Bank of the United States[1750] [c]Banking and finance;July 10, 1832: Jackson Vetoes Rechartering of the Bank of the United States[1750] [c]Trade and commerce;July 10, 1832: Jackson Vetoes Rechartering of the Bank of the United States[1750] [c]Government and politics;July 10, 1832: Jackson Vetoes Rechartering of the Bank of the United States[1750] Benton, Thomas Hart Clay, Henry [p]Clay, Henry;and Bank of the United States[Bank of the United States] Taney, Roger Brooke [p]Taney, Roger Brooke;and Bank of the United States[Bank of the United States] Van Buren, Martin [p]Van Buren, Martin;and Bank of the United States[Bank of the United States] Webster, Daniel [p]Webster, Daniel;and Bank of the United States[Bank of the UnitedStates]

Contemporary caricature depicting President Andrew Jackson as a despotic “King Andrew” because of his inflexible opposition to the Bank of the United States.

(Library of Congress)

In 1828, it appeared that the Bank of the United States had regained general favor throughout the nation. Opposition had not been entirely eliminated, but the success of the bank under Biddle, combined with the vitality of the economy, which was entering into a period of high prosperity, provided antibank elements with little ammunition with which to press their attack. Nevertheless, the resentment of interests such as the state bankers existed, awaiting only an opportunity to strike at the national bank. Moreover, memories of the bank’s errors during the depression of the early 1820’s had not been entirely erased. Martin Van Buren Van Buren, Martin [p]Van Buren, Martin;and Bank of the United States[Bank of the United States] , the governor of New York, had opposed the bank in 1826, and Senator Thomas Hart Benton Benton, Thomas Hart of Missouri still regarded the institution as a “monster” and a monopoly that should be destroyed. They could do little by themselves, but they were prepared to respond to the call of a more prominent champion of the people against the bank interests—President Andrew Jackson.

Jackson’s previous public career as a military general, planter in Tennessee, judge, senator, speculator, and bank-stock owner provided no foreknowledge of the position that he was to take on the Bank of the United States. When Jackson took office, Biddle, who was from a prosperous Philadelphia family, was reasonably sure that he and the president could reach an agreement concerning the bank. In Jackson’s first annual message to Congress in December, 1829, he questioned the constitutionality of the bank while also charging that the bank had failed to establish a uniform and sound currency Currency;U.S. . In his second message, he treated the bank more harshly, but neither message demoralized Biddle. During that same year, Jackson had written to Biddle,

I do not dislike your bank any more than all banks. But ever since I read the history of the South Sea Bubble [which had defrauded thousands of eighteenth century British investors] I have been afraid of banks.

In 1830, neither Jackson nor Biddle wished to make the bank an issue in the election of 1832 Presidency, U.S.;election of 1832 . Biddle believed that compromise was possible.

At that point, it appears that the supporters of Jackson and of Biddle convinced the two men that the issue could not be postponed. The bank’s charter was valid until 1836, but Senators Henry Clay Clay, Henry [p]Clay, Henry;and Bank of the United States[Bank of the United States] and Daniel Webster Webster, Daniel [p]Webster, Daniel;and Bank of the United States[Bank of the United States] , who performed legal work for the bank, viewed the bank issue as one that could seriously damage Jackson’s chances for reelection in 1832. For reasons still not thoroughly explained, Biddle succumbed to their urgings and agreed to apply for recharter prior to the election. Under the pressure of his antibank advisers, Jackson had drifted to a position that made compromise with Biddle unlikely.

A bill for recharter passed in the Senate on June 11 and passed in the House on July 3, 1832. Jackson vetoed it on July 10, and the bank’s supporters could not muster the votes to override his veto. The veto message has been praised and condemned by the advocates and detractors of Jackson. The veto did not deal with the bank as an economic institution but as a vehicle by which the special interests, “the rich and powerful . . . bend the acts of government to their selfish purposes.” According to Jackson, the bank was irresponsible: It favored the rich against the poor, and it was not compatible with democratic self-government. Jackson seized upon the bank as a symbol of special privileges for the wealthy. He questioned the bank’s constitutionality, large number of foreign stockholders, and favoritism for its friends in Congress. He commented, “Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress.” The bank became a major issue in the election of 1832 Presidency, U.S.;election of 1832 , in which Jackson Jackson, Andrew [p]Jackson, Andrew;election of 1832 won a convincing victory over Henry Clay Clay, Henry [p]Clay, Henry;and Bank of the United States[Bank of the United States] .

Jackson considered the 1832 election results as a mandate to escalate his war against the Bank of the United States. Not satisfied that the bank would pass from the scene in 1836, Jackson decided to destroy it at once. In spite of opposition from Congress, Jackson determined to withdraw government deposits from the bank. After dismissing two secretaries of the Treasury who balked at this action, Jackson appointed a third, Roger Brooke Taney Taney, Roger Brooke [p]Taney, Roger Brooke;and Bank of the United States[Bank of the United States] , who suspended the deposits of federal funds in the bank and placed them in various state-chartered banks around the country. The bank reacted to this diminution of its resources by calling in its loans and restricting its credit operations. At that point, Biddle became so obsessed with the threat to the bank that he seems to have forgotten that the bank had a responsibility to the public. Biddle’s policies were more severe than the situation required, but he was determined to demonstrate the power of the bank and thus force its recharter. Jackson had accused the bank of irresponsibility in 1832, and during the period 1834-1836, Biddle’s activities substantiated Jackson’s charge. The bank lost much support during the last two years of its national charter.

Significance

President Andrew Jackson struck at the Bank of the United States at a moment when the nation could least afford to lose it. The economy was entering a boom cycle. Land sales were mounting rapidly, specie was scarce, credit was overextended, state banks proliferated, their printing presses poured out paper money, and prices rose. Deprived of federal deposits, the Bank of the United States could no longer restrain the manufacture of credit and currency Currency;U.S. by state banks. It also could not enter the specie market with strength. Although it is impossible to say that the destruction of the Bank of the United States caused the Panic of 1837 and the resultant depression, the severity of both might have been alleviated greatly and the depression shortened had the bank continued to function under a national charter.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Bodenhorn, Howard. A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building. New York: Cambridge University Press, 2000. Examination of American banking policies in the years leading up to the Civil War, with attention to the Bank of the United States.
  • citation-type="booksimple"

    xlink:type="simple">Brown, Marion A. The Second Bank of the United States and Ohio, 1803-1860: A Collision of Interests. Lewiston, N.Y.: Edwin Mellen Press, 1998. Study of conflicts between the Second Bank of the United States and the state of Ohio.
  • citation-type="booksimple"

    xlink:type="simple">Govan, Thomas P. Nicholas Biddle: Nationalist and Public Banker, 1786-1844. Chicago: University of Chicago Press, 1959. Well-written biography that provides rich background information on the development of the Second Bank of the United States.
  • citation-type="booksimple"

    xlink:type="simple">Hammond, Bray. Banks and Politics in America, from the Revolution to the Civil War. Princeton, N.J.: Princeton University Press, 1957. Argues that Jackson and the bank’s allies were all capitalists, but the Jacksonians favored rapid development while the Bank of the United States was more cautious.
  • citation-type="booksimple"

    xlink:type="simple">Kaplan, Edward S. The Bank of the United States and the American Economy. Westport, Conn.: Greenwood Press, 1999. Broad economic study of the role of the Bank of the United States in American economic history.
  • citation-type="booksimple"

    xlink:type="simple">Remini, Robert V. Andrew Jackson and the Course of American Empire. 3 vols. New York: Harper & Row, 1977-1984. Provides a thorough background on Jackson, his political rise, and the issues, such as multification, that are identified with the age of Jackson.
  • citation-type="booksimple"

    xlink:type="simple">Schlesinger, Arthur M. The Age of Jackson. Boston: Little, Brown, 1953. This beautifully written book suggests that Nicholas Biddle personified privilege, and that by attacking the bank, Jackson was championing democracy.
  • citation-type="booksimple"

    xlink:type="simple">Sharp, James R. The Jacksonians Versus the Banks: Politics in the States After the Panic of 1837. New York: Columbia University Press, 1970. Examines the ruinous aftereffects of the demise of the national bank and the rise of untrustworthy state banks.
  • citation-type="booksimple"

    xlink:type="simple">Watson, Harry L. Liberty and Power: The Politics of Jacksonian America. New York: Noonday Press, 1990. Analyzes the political forces that elevated the bank battle to the level of the primary issue in the 1832 presidential campaign.

Second Bank of the United States Is Chartered

McCulloch v. Maryland

Clay Begins American Whig Party

Panic of 1837 Begins

Establishment of Independent U.S. Treasury

Congress Passes the National Bank Acts

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