U.S. History I-CP
Ms. Horn
Jackson 4: Jackson and the Bank
The Second Bank of the United States
Before the 20th Century, paper money was like an IOU for silver or gold. If you had
paper money, a bank should give you gold in exchange. If a bank failed, the paper
money became worthless. This is what happened during the Panic of 1819.
Jackson didn’t like banks. He thought they were tools for the rich. He especially hated
the Second Bank of the United States.
The charter for the Second Bank of the United States will expire in 1836. In 1832, Henry
Clay put a ‘recharter bill’ through Congress. If passed, it will extend the bank’s charter
until 1856.
1. Knowing that Jackson hated banks, why do you think Clay put the re-charter bill
through Congress 4 years earlier than he had to?
The re-charter bill passed Congress, but Jackson vetoed it. In his veto message, he
explained why he hates banks.
See Document 4 in your packet.
2. Why does Jackson vetoed the re-charter bill?
3. How does he think the bank affects the rich and the poor?
Jackson also stated that:
It is to be regretted that the rich and powerful too often bend the acts of
government to their selfish purposes. Distinctions in society will always exist
under every just government. Equality of talents, of education, or of wealth
can not be produced by human institutions. In the full enjoyment of the gifts
of Heaven and the fruits of superior industry, economy, and virtue, every
man is equally entitled to protection by law; but when the laws undertake to
add to these natural and just advantages artificial distinctions, to grant titles,
gratuities, and exclusive privileges, to make the rich richer and the potent
more powerful, the humble members of society-the farmers, mechanics, and
laborers-who have neither the time nor the means of securing like favors to
themselves, have a right to complain of the injustice of their Government.
4. What does this mean?
5. Who is Jackson ‘talking to’ in his speech? Why would they like what he says?
6. Do you think Jackson was correct in vetoing the bank bill?
Not everyone agreed with Jackson. At this point in history, presidents were only
expected to veto laws they thought violated the Constitution. It was seen as inappropriate
for a president to veto laws simply because he disagreed with them. Also, many people
thought that vetoing the banking bill was just a BAD IDEA and showed Jackson did not
understand banking or the economy.
Read Document 5
7. Summarize Webster’s argument.
8. Do you agree with him?
The Bank War
The Bank still has 4 years left in its charter. Jackson wants to ‘kill’ the bank
immediately.
He fires and hires new Secretaries of the Treasury until he finds one, Roger B. Taney,
who agrees to remove federal money from the Second Bank of the United States.
This forces the Second Bank of the United States to fail.
Jackson also issues the Specie Circular which forces people to pay for land with gold or
silver, not paper money. This makes people distrust paper money even more. Fewer
people can buy land now.
As a result of the Bank War and other economic conditions, the U.S. enters a depression
in 1837. (Jackson’s presidency is over in 1837; his successor, Martin Van Buren, must
deal with the problem.)
Analyze Document 3