Jackson The Economy & Banks • I. Tariff of 1828 • A. Protective tariff- tax placed on imported goods to support sale of American good –1. Protective tariffs: 1816, 1824, 1828, & 1832. –2. Tariff of 1828 •a. South was suffering from depressed cotton market •b. Injured Southern economy –c. Duties were as high as 45% –d. Actually passed by Jackson supporters to unseat JQA –e. New Englanders- wise to plan & accepted tariff • II. Tariff 0f 1832 –A. Amended tariff of 1828 to appease South •1. Did not go far enough •2. Lowered from 45 to 35% •3. South- tariffs appeared permanent • B. Nullifiers (Nullies) & Unionists Clash • C. Almost caused a civil war –1. Jackson threatens to hang Nullifiers –2. Ex-Senator Robert Hayne –If a civil war was to be avoided one side had to compromise • D. Compromise- Tariff 1833 –1. Passed to appease South –2. Gradually lowered tariffs • E. Force Bill –1. Jacksonians save face –2. Authorized President to use army & navy to collect tariff duties • “The Bank is trying to kill me, but I will kill it.” • I.Bank of the United States(BUS) –A. McCulloch v. Maryland (1816) – Upheld constitutionality of national bank • B. Jackson –1. Against recharter of B.U.S. •a. Henry Clay behind it •b. Hurt West financially •c. Felt it was a tool of Northeastern elite (Nicholas Biddle) • C. Jackson Vetoes Recharter Bill of 1832 –1. Unconstitutional –2. Abuse of executive power –3. Argued that he found Bill personally harmful –4. In effect- presidential power equal to 2/3 of Congress • 5. Jackson won the election of 1832 based on the issue; the common people agreed with him. • D. Jackson’s Reaction & B.U.S. –1. Vowed to kill Bank –2. Withdrew found from B.U.S. & put them into state banksPet Banks –3. Forced B.U.S. to reverse policy and extend easy credit to state banks – –5. Nicholas Biddle- tried to force the state banks to convert to gold which led to an inflationary spiral –6. Panic of 1837- economic depression