CHAPTER 12: THE AGE OF JACKSON
Section 4: Prosperity and Panic
Today’s Essential Question: What were the
causes and effects of President Jackson’s war
on the Bank of the United States?
What We Already Know
Jefferson and Hamilton fought over
the Bank of the United States when
Washington was president.
What We Already Know
When he became
president,
Jefferson allowed
the Bank’s charter
to expire.
What We Already Know
After the War of
1812, the need for
a national bank led
to its re-charter in
1816.
The Bank of the United States was
very powerful.
• Held all federal revenue
• Printed the national currency
• Controlled small banks
through loans and by limiting
the nation’s money supply
• Privately controlled by a
handful of powerful men
• Nicholas Biddle controlled
the Bank; very powerful man
The Bank had always been controversial.
• Jefferson had opposed its
creation, and had not
renewed its charter.
• The Bank had been rechartered in 1816, and was
not due for renewal until
1836.
• But Andrew Jackson was
known to be unfriendly to
the bank.
Jackson was very suspicious
of all banks.
• Banks could issue
paper money that
sometimes was not
backed by gold.
• He had lost money
earlier through bank
failures.
• A financial panic in
1819 had hurt many
Westerners.
Check for Understanding
• Who was Nicholas Biddle?
• What made the bank so powerful?
• Why was Jackson so suspicious of
banks?
Jackson was even more suspicious
of the national bank.
• To Jackson, the national bank was
a tool of the wealthy, who cared
little for the common people.
• He saw it as a monopoly that gave
a few wealthy men too much
influence on the economy.
• The bank might even become a
threat to American democracy,
since it might bribe officials or
even buy elections.
15. Why did Jackson oppose the Second
Bank of the United States?
• He saw it as a monopoly controlled by
a few powerful men.
• He also believed it favored the wealthy
over the common people.
• Banks could issue paper money, which
Jackson distrusted.
• The bank might threaten American
democracy by bribing officials or
influencing elections.
Clay and Webster wanted to use the
Bank as a campaign issue in 1832.
They were confident that Jackson would
veto any attempt to re-charter the bank
Webster
Clay
Clay and Webster wanted to use the
Bank as a campaign issue in 1832.
• They believed that
most American voters
supported the Bank,
and that a Jackson veto
of the new charter
would anger voters.
• They hoped this anger
would result in Clay’s
election over Jackson
in the presidential
election of 1832.
Nicholas Biddle also wanted to use the
Bank as a campaign issue in 1832.
• Biddle thought Jackson
would agree to renewal
rather than risk
angering voters.
• A re-charter bill was
introduced in Congress
four years ahead of
schedule.
Check for Understanding
• Why did Henry Clay want
Andrew Jackson to veto
the national bank before
the 1832 election?
• Henry Clay wanted
Andrew Jackson to veto
the national bank so that
Clay could defeat Jackson
in the 1832 election.
Be sure to re-state the question in your answer!
16. Why did Nicholas Biddle ask
Congress to renew the Bank’s
charter ahead of schedule?
A. He wanted to stand up to Henry Clay and
Daniel Webster.
B. He thought Jackson would agree to renewal
rather than risk angering voters in the 1832
election.
C. It would help him win votes when he ran for
president the next year.
D. He wanted to help Martin Van Buren look
more like one of the common people.
Jackson vetoed the Bank’s recharter for several reasons.
• It was a privileged institution that served
the rich.
• Federal deposits gave the Bank an unfair
advantage over other banks.
• Average American taxpayers did not earn
the interest from these deposits.
• Nicholas Biddle used loans to congressmen
at very low interest rates to win their
support.
Jackson slaying the
“monster” bank
Jackson’s veto was the main
issue in the election of 1832.
• Henry Clay’s National
Republicans called
Jackson a tyrant.
• Jackson’s Democrats
described Jackson as a
defender of the people.
• Jackson saw his victory
on election day as a sign
that the people approved
his war on the bank.
Jackson decided to kill the bank.
• Even before 1836, all government
deposits withdrawn from the bank's
branches
• Federal funds re-deposited in
selected state banks ("pet banks")
17. How did Jackson kill the Bank?
A. He persuaded the Supreme
Court to declare it
unconstitutional.
B. He removed all government
deposits from it and placed
the money in state banks.
C. He sent federal troops to
force all bank employees to
leave their offices.
D. He refused to support its recharter in 1840.
Nicholas Biddle tried to put public
pressure on Jackson.
• Called in loans and
refused to make
new loans
• Claimed he was
forced to do this
because the bank
needed funds
• Thought economic
troubles would
cause the public to
demand the return
of the federal
deposits
Instead, the people rallied to Jackson.
• Eventually, the bank went out of business.
• Jackson had won the war, but the economy
would be the victim.
And new
president Martin
Van Buren,
elected in 1836,
would get all the
blame.
Check for Understanding
• A ask B: How did Biddle try to put
public pressure on Jackson?
• Biddle tried to put public pressure
on Jackson by calling in old loans
and refusing to issue new loans.
Be sure to re-state the question in your answer!
Check for Understanding
• B ask A: When the bank closed and
economic troubles came, who got all
the blame?
• When the bank closed and economic
troubles came, new president Martin
Van Buren got all the blame.
Be sure to re-state the question in your answer!
Jackson’s ‘pet banks’ created
economic problems.
• Banks made it easy for people to borrow
money, and the economy boomed.
• Some ‘wildcat’ banks issued too much paper
money, making each dollar worth less.
Inflation is an economic condition caused
by too much money in circulation.
• Inflation causes
prices to rise, since
each dollar is worth
less.
• These high prices
hurt Americans all
across the country.
Check for Understanding
• A ask B: What are pet banks?
• Pet banks were the state banks chosen
by Jackson to hold the nation’s money
instead of using the Bank of the United
States.
Be sure to re–state the question in your answer!
Check for Understanding
• B ask A: What is inflation?
• Inflation is an economic condition
caused by too much money in
circulation, leading to higher prices.
•Be sure to re–state the question in your
answer!
To fight inflation, Jackson issued
the Specie Circular.
• Payments for public land to
be made only in gold and
silver (i.e., specie)
To fight inflation, Jackson issued
the Specie Circular.
• Payments for public land to
be made only in gold and
silver (i.e., specie)
• If people used money
printed by wildcat banks to
purchase public land, the
government would be left
holding the bag if those
banks failed.
The Specie Circular only made
things worse.
• People rushed to banks to trade paper bills
for gold and silver.
• By May 1837, many banks were running out
of specie and stopped accepting all paper
currency.
•The demand for specie
caused banks to fail.
• When the government tried to get its money
from the state banks, the banks could not pay.
• The banks defaulted, and went out of business.
Check for Understanding
• A ask B: What did the specie circular
require?
• The specie circular required that all public
land payments be made in gold or silver.
•Be sure to re–state the question in your
answer!
Check for Understanding
• B ask A: How did the specie circular lead to
bank failures?
• The specie circular led to bank failures
because banks couldn’t exchange paper
money for specie, and they defaulted.
•Be sure to re–state the question in your
answer!
Failure of the banks led to a severe
economic slump called a depression.
This depression became known
as the Panic of 1837.
The Panic of 1837 brought
economic fear and ruin.
• Widespread hunger and homelessness
• Hundreds of businesses bankrupted
• More than a third of the population out
of work
Check for Understanding
•
•
•
•
•
B ask A: What was the Panic of 1837?
The Panic of 1837 was a severe depression.
A ask B: What is a depression?
A depression is a bad economic slump.
B ask A: How did the Panic of 1837 affect
people?
• The Panic of 1837 resulted in factories being
closed, bank collapse, unemployment,
hunger and homelessness.
Be sure to re–state the question in your answer!
Get your whiteboards
and markers ready!
18. How did Jackson’s actions cause
economic problems during Van
Buren’s presidency?
A. Van Buren’s government couldn't afford to
repay the money Jackson had borrowed from
other countries.
B. His war against the bank had consumed all
the money in the government's treasury.
C. The state banks he favored issued too much
paper money, causing severe inflation.
D. He had spent all the Democrats’ campaign
funds supporting Harrison in the 1840
election.
Because of Jackson’s
popularity, his vicepresident, Martin Van
Buren, had been elected
president in 1836.
• Many Americans
blamed Van Buren for
the Panic, though he
had taken office only
weeks before it started.
• The depression made it
almost impossible for
him to win re-election in
1840.
The Rise of the Whig Party
• Senators Daniel Webster and Henry Clay
argued that the government needed to
help the economy.
• Van Buren believed that the economy
would improve if left alone.
The Rise of the Whig Party
• During Jackson’s war on the national bank, Clay,
Webster, and other opponents of Jackson had
formed the Whig Party.
• They took the name ‘Whigs’ from a political party
in Britain that had opposed the power of the king.
Check for Understanding
• B ask A: Who was Martin Van Buren?
• Martin Van Buren was Jackson's vicepresident, and then was elected president
himself in 1836.
• A ask B: Who formed the Whig party?
• The Whig party was formed by Clay,
Webster, and other opponents of Jackson.
Be sure to re-state the question in your answer!
The Rise of the Whig Party
• The Whigs believed
that the president’s
power had grown too
much under Jackson.
• They mockingly
referred to Jackson
as ‘King Andrew.’
The Rise of the Whig Party
In 1840, the Whigs chose William Henry
Harrison of Ohio to run for president and John
Tyler of Virginia to run for vice-president.
Get your whiteboards
and markers ready!
20. What was the Whig Party?
A. The Whigs were opposed Jackson
because he had concentrated too much
power in the presidency.
B. It was a party founded by Jackson's
supporters during his third run for the
presidency.
C. It was founded by men who were
opposed to Clay's American System.
D. The Whigs were men who supported
Martin Van Buren instead of Jackson for
president in 1836.
Harrison had a good military record
and lacked strong political views.
• Harrison had defeated the
Shawnees at the Battle of
Tippecanoe and had been a
hero during the War of 1812.
• The Whigs made the most of
Harrison’s military record
and his nickname, “Old
Tippecanoe.”
• The phrase “Tippecanoe and
Tyler too” became the Whig
election slogan.
The Election of 1840
• During the 1840 election campaign, the
Whigs tried to appeal to the common
people, as Andrew Jackson had done.
• Though Harrison was the son of a Virginia
plantation owner, he had settled on a farm
in Ohio.
The Election of 1840
The Whigs said Harrison was a true Westerner,
and they used symbols of the frontier to present
him as a common man, like Jackson had been.
The Election of 1840
• The Whigs contrasted Harrison
with the wealthy
New Yorker,
Martin Van Buren.
• They hoped voters
would see him as
someone who
couldn’t relate to
the problems of
the common man.
Check for Understanding
• A ask B: How did the Whigs portray their
candidate in the 1840 election?
• The Whigs portrayed their candidate as
Westerner and a common man, like
Jackson had been.
• B ask A: How did the Whigs portray Martin
Van Buren?
• The Whigs portrayed him as a wealthy
New Yorker who didn’t care about
common people.
Be sure to re-state the question in your answer!
Harrison won in a close election.
• At his inauguration, the 68-year-old president
spoke for nearly two hours in cold, rainy March
weather with no hat or coat.
• He came down with a
cold that developed
into pneumonia.
Harrison won in a close election.
• April 4, 1841, one month
after being inaugurated,
Harrison became the first
president to die in office.
• Vice-President John Tyler
became president.
Check for Understanding
• B ask A: Who were the Whig candidates
in 1840?
• The Whig candidates in 1840 were
William Henry Harrison and John Tyler.
• A ask B: How did John Tyler become
president?
• John Tyler became president after
President Harrison got sick and died.
Be sure to re-state the question in your answer!
Get your whiteboards
and markers ready!
19. What role did Jackson’s
popularity play in the elections
of 1836 and 1840?
A. Harrison won in 1840 because he had been
Jackson’s vice president in 1836.
B. Jackson’s support for Martin Van Buren
helped him win the presidency in 1836.
C. The Whigs portrayed their candidate as a
common man like Jackson.
D. In both elections, each candidate claimed to
be another common man just like Jackson.
Choose all that are true!