President Jackson Battle the Bank
Part 1: Read the section on Jackson and his battle with the National Bank and answer the questions
below
The system of banking and currency was not well established in the early United States when President
Jackson came into office.
Banks were privately owned and had state charters instead of following federal rules. Currency, or
printed money, also was created by banks, not the federal government. And the printed money, could
be traded for gold and silver. In the Republic’s first 50 years nothing led to bigger debate at the kitchen
table than when banking was brought up.
By January of 1815, the United States had been without a national bank for 4 years. The first bank’s
charter or contract had expired by 1811 and President Madison refused to renew it. However, the
American Revolution and the War of 1812 had left the United States with a lot of debt. Many bankers
and wealthy businessmen believed that a national bank would help to restore the currency and limit
inflation, which would stabilize the economy and help businesses.
President James Madison was not a supporter of the first national bank, created by Hamilton. However,
he did believe it was a necessary evil that would stabilize the economy. The Second Bank of the United
States was a private organization that functioned as the central bank for the United States and helped to
regulate its money supply. The United States government controlled 20% of the bank.
Andrew Jackson had always distrusted banks and he really did not like the 2nd Bank of the United States.
To Jackson, banks represented how the privileged business class was oppressing the common man. He
made it clear that he planned to challenge the Constitutionality of the bank. In reaction to Jackson
challenging if the bank was legal or not, the director of the bank, Nicholas Biddle, sought help from bank
supporter, Henry Clay. Jackson presented his arguments against the bank in front of Congress.
Unfortunately, he did not receive much support. The issue continued to be controversial for the next
three years. Congress attempted to pass a bill to draw up a charter for the bank. Jackson vetoed it.
On September 10th, 1833, Jackson removed all federal funds from the Second National Bank and
distributed them around to various state banks, which later became known as “pet banks.” The bank’s
charter expired in 1836. Jackson had won. However, it was believed that Jackson had overstepped his
powers. It would be another 75 years before another attempt would be made to create a national bank.
Due to there no longer being a national bank, the country’s economy began to struggle. Many pet banks
could not keep up with the demand of money from the citizens leading to them closing. Inflation also
sky rocketed, making usually cheap goods become more expensive. Although Jackson thought he may
have been helping the lower classes, the closing of the national bank actually drastically hurt the people
he was trying to help.
Directions: Complete the following questions based on the reading above:
1) Define the following
a. Currency – Printed Money
b. Pet Banks – State Banks
2) Why was the discussion about banking so controversial?
a. They had very few rules and regulation from the government
3) Why did bankers believe the national bank was needed?
a. They believed it was the only way to recover debt from previous
4) Why did Jackson not trust the banks?
a. He felt it represented how the privileged business class was hurting the common
man
5) How did Jackson finally destroy the national bank?
a. He vetoed the bank and removed all federal funds
6) What effect did the end of the national bank have on the United States?
a. Economy began to struggle pet banks could not keep up with demand. Inflation
skyrocketed
Part 2: Analyze the political cartoon and complete the questions below
List the details you see
What are some inferences you can make?
What conclusions can you make about the message from the artist?
Part 3: Write a claim and support with two pieces of evidence on the following prompt.
Did Andrew Jackson do the right thing by ending the National Bank?
Claim:


Evidence: