Decline of the Bank of the United State

Suzy Smith, Gabriel Moreau, Jordan Terrell

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This political cartoon shows Andrew Jackson battling a monster (representing the Bank of the US). Nicholas Biddle is the monster's main head. This picture is relevant because it helps better explain Jackson's distaste for the Bank. Images like these were employed gain favor for Jackson's view.

Source: "Primary Sources - The Bank War." Primary Sources - The Bank War. N.p., n.d. Web. 26 Oct. 2014.

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Nicholas Biddle was the president of the Bank of the United States. This gave him a tremendous amount of power over the United States financial system. Andrew Jackson became President and hated the bank because he felt it was monopolistic and didn't like that it was a private institution. Henry Clay asked Congress to renew the bill and he tried to make it a political issue for the President on whether or not to veto the bill. Jackson decided to veto the bill in favor of the poorer majority in the West who hated the Bank. The bank's charter continued for three more years so Jackson decided to remove federal funds from the bank. He invested many of these extra funds into pet banks that supported Jackson politically. After the death of the bank of the United States, smaller banks called wildcat banks began to issue their own wildcat currency. This currency was very unreliable because it was based on how valuable the bank that issued it was. Andrew Jackson had the treasury issue the Specie Circular, which required that public land had to be purchased with coins and hard money. This was passed because no one could trust the wildcat currency and that there was large amounts of speculative inflation. The end of the Bank of the United States hurt the country economically and led to the financial panic of 1837.

Primary Source

"The panic is fast subsiding and like other panics must end in leaving society in a more pure state. The cowards fly, and the corrupt & infected portion of our county will fail, and leave our country in a more healthy condition, by giving us, in time, a metallic currency to meet the wants of the labouring class of the community by putting down the circulation of notes under five dollars and in time, under twenty dollars.... The tyrant [the Second Bank of the United States] is chained & must expire at the end of its charter."

This letter basically explains the economic terror at the time. In order to kill the Bank, Andrew Jackson ended up making bank notes almost worthless (under $5). He made the Bank responsible for the economic debt, leading people to side with Jackson in the idea that the Bank must go.

Source: "Primary Sources - The Bank War." Primary Sources - The Bank War. N.p., n.d. Web. 26 Oct. 2014.

Extra Info To Know

The purpose of the Specie Circular was to curb speculation in public lands, however the circular actually set off a real estate and commodity price crash because most people did not have the gold and/or silver to pay for the land. In the long run, these events ended up badly hurting the economy and aiding in the Financial Panic of 1837. President Andrew Jackson refusing to renew the charter of the Second Bank of the United States resulted in the withdrawal of government funds from that bank.

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