Jackson and the Bank
ESSENTIAL QUESTIONHow do governments change?-Short Video
Jackson's War Against the Bank
Guiding Question:Whatevents occurred when President Jackson forced the National Bank to close?Andrew Jackson disliked the Second Bank of the United States long before he became president.Congresshad set up the bank in 1816 to hold the federal government's money and to control the nation's money supply.Privatebankers rather than elected officials ran the bank.theBank's assigned duties made it a powerfulinstitution.Manywestern settlers depended on being able to borrow money to run their farms.TheBank's strict policies made such loans difficult to obtain.Likemany other westerners, Jackson viewed the Bank as a monopoly that favored wealthy Easterners and limited western growth.
The Bank and the Election of 1832
Jackson's opponents planned to use the Bank to defeat him in the 1832 presidential campaign.SenatorsHenry Clay and Daniel Webster were friends ofBiddle (who ran the bank).Theypersuaded Biddle to apply early for a new charter—a government permit to run the Bank—even though the Bank's charter did not expire until 1836.Theythought this would force Jackson to take action against thebank.Clayand Webster believed the Bank had the support of the American people.Theythought that if Jackson tried toveto, or reject, the renewal of the Bank's charter, he would lose support.HenryClay wanted to run for president.Heand Webster believed that Jackson's veto would help Clay defeat the president in the 1832 election.Jacksonwas sick in bed when the bill to renew the Bank's charter came to him to sign.Hetold Secretary of State Martin Van Buren, "The bank is trying to kill me. But I will kill it."Jacksonvetoed the bill.
Webster and Clay were right about one thing.TheBank did play a large part in the election of 1832.Insteadof gaining support for Clay as president, however, their planbackfired & mostpeople supported Jackson's veto, andJackson was reelected.Jacksonthen decided to "kill" the Bank even before its current charter ended.Heordered all government deposits withdrawn from the Bank and placed in smaller state banks.In1836 he refused to sign a new charter for the Bank, and it closed.
The Panic of 1837
Jackson decided not to run for a third term in 1836.TheDemocrats chose Van Buren, Jackson's vice president during his second term.TheWhigs, a new party that included former National Republicans and other anti-Jackson forces, were the opposition. The Whigs nominated three candidates.Eachhad support in a different part of the nation.TheWhigs hoped this tactic would keep Van Buren from getting a majority of the electoral votes.Thenthe election would be decided by the House of Representatives, which the Whigs controlled.TheWhigs' plan failed.Jackson'spopularity and support helped Van Buren win both the popular and the electoral vote.Remember– Van Buren was the President who ran and won after Jackson – he finished off Jackson’s plan to remove the Native Americans using the Trail of Tears.
Van Buren had barely taken office when a financial panic hit the nation.Thepanic was in part an effect of Jackson's victory over the Bank of the United States.Whenthe Bank ceased operations in 1836, control over state banks vanished.Someof these banks began issuing huge amounts of banknotes.Concernedthat these notes had little value, the government stopped accepting them as payment for purchasing public land.Peoplebegan to question the value of their banknotes, leading to economic panic.ThePanic of 1837 led to a depression, a severe economic downturn.Landvalues dropped and banks failed.Thousandsof businesses closed.Manyworkers lost their jobs, and farmers lost their land.Incities across the nation, many people could not afford food or rent.
President Van Buren did little to ease the crisis.He believed in the principle oflaissez-faire—that government should interfere as little as possible in the nation's economy.However, Van Buren did persuade Congress to create an independent federal treasury in 1840.This meant that the government no longer had to deposit its money in private banks as it had been doing.It would keep its money in the federal treasury instead.This new system prevented state and private banks from using government money to back their banknotes.It helped prevent further bank crises.
Calling it a "second declaration of independence," Van Buren and his supporters hailed the passing of the federal treasury law.Still, members of Van Buren's own Democratic Party joined the Whigs in criticizing the act.Thesplit in the Democratic Party gave the Whigs a chance to win the presidency in 1840.
The Whigs in Power
Guiding Question:Whatevents occurred during the 1840s that led to the weakening of the Whig party?When Van Buren ran for reelection in 1840, Democrats had held the White House for 12 years.Now, with the country still in the depths of depression, the Whigs thought they had a chance to win the presidency.
The Log Cabin Campaign
To run against Van Buren, the Whigs united behind one of their 1836 candidates, William Henry Harrison.LikeAndrew Jackson, Harrison was a hero of the War of 1812.JohnTyler, a planter from Virginia, was Harrison's running mate.Harrisonhad first gained fame with his victory over Tecumseh's followers in the Battle of Tippecanoe in 1811.TheWhigs made reference to this event in the campaign slogan: "Tippecanoe and Tyler Too."Harrisonneeded the support of the workers and farmers who had voted for Jackson in order to win the election.TheWhigs portrayed Harrison, who in reality was a wealthy Ohioan, as a simple frontiersman likeJackson.TheDemocrats attacked this image.Theysaid that all Harrison was good for was sitting in front of a log cabin and collecting his military pension.Theseattacks played right into the hands of the Whigs, who adopted the log cabin as thesymbolof their campaign.
While presenting Harrison as a "man of the people," the Whigs portrayed Van Buren as a wealthy snob with perfume- scented whiskers.Theyblamed him for the depression and accused him of spending the people's money on expensive furniture for the White House.TheWhigs' tactics and the effects of the depression seemed to work.Arecord number of voters turned out to elect Harrison by a wide margin, making him the first Whig president.Inaugurationday, 1841, was bitterly cold. Harrison insisted on delivering his long speech without a hat or coat.Hedied of pneumonia 32 days later.Heserved the shortest term of any president, and John Tyler became the first vice president to gain the presidency because of the death of a president.Atage 50, Tyler was also the nation's youngest president up to that time.
John Tyler's Presidency
PresidentTyler vetoed several bills sponsored by Whigs in Congress.Hislack of party loyalty outraged many Whigs.Whenhe twice vetoed a bill to renew the charter of the Bank of the United States, all but one of his cabinet members resigned.OnlyDaniel Webster remained as secretary of state.Whigleaders actually expelled Tyler from the Whig Party.Thebiggest success of the Tyler presidencycame in the area of foreign relations.In1842 the United States and Great Britain signed theWebster-AshburtonTreaty.Thisagreement settled a long dispute over the border between Maine and Canada and set a firm U.S.- Canadian boundary from Maine to Minnesota.
Except for opposing Tyler, the Whigs could not agree on their party's goals.Increasingly, they voted by region—North, South, and West—not party.Afteronly four years, the Whigs were out of power.TheWhigs elected just one more president, Zachary Taylor, in 1848.Tayloralso died in office.Bythen, the Whig Party had become badly divided over the issue of slavery.Bythe early 1850s the party had nearly disappeared.ManyNorthern Whigs left the party and helped to form a new political party—the Republican Party that we have today.