Nicholas Biddle, the Bank Veto, the Pet Bank, and th
In 1832, Nicholas Biddle applied for the recharter of the Second National Bank. The bill passed Congress, but president Andrew Jackson, who disliked the bank, vetoed the bill. The removal of the national bank led to the creation of many state banks, or "pet banks" that were funded by US Treasury money. These pet banks engaged in reckless and risky "wildcat banking" which caused the market to be flooded with an excess of unreliable paper money. Because of this paper money's unreliability, Andrew Jackson ordered the Specie Circular which stated that only gold and silver could be used to buy government land. This only led to further devaluation of paper money and helped cause the upcoming Panic of 1837.
"... The Bank of the United States enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stock-holders..."
Our primary source seen above is Andrew Jackson's letter to the senate dated July 10, 1832. Jackson's letter explains that he dislikes the bank and its negative effects on the economy. Jackson dislikes the banks power and control, and in turn vetoes the recharter
Long Term Effects
Nicholas Biddle- became the president of the bank of the United States. Jackson is his main enemy who urges people to fight against the bank. Biddle vs Jackson had a long range significance, it caused panic with businesses, and mistrust of people towards the bank.
Bank Veto- the bank wants to pass a bill called "the recharter bill" to extend the bank charter to not end in 1836
Jackson vetoes the bill, winning him a re-election.
Pet bank- type of government funded banks that get money from the government due to the bank veto.
Brings down the bank of the United States.