Read more about Jackson and the Second Bank of the United States.
Why was Jackson’s battle with the Second Bank of the United States so important? The United States financial system was much different in the early 1800s than it is today.
Banks, not the federal government, issued paper money called currency. Banks were supposed to be able to exchange the paper bills they issued for gold and silver coins.
Often banks issued more paper money than they had in gold and silver. Then, the value of their paper money would drop. Suddenly, people would find that their bank’s dollars were no longer worth what they were supposed to be. Banks also had a tendency to loan out too much money, making them unstable.
Jackson opposed the Bank of the U.S. for two main reasons. He thought gold and silver money was better for working people because it had real value. They would not wake up one day to find that their paper money was worthless because the bank that issued it had failed. Coins were always valuable because they were made from precious metals.
The second reason he was against the national bank was because it was a private institution that had a lot of control over the nation’s economy. The national bank was the place where the federal government deposited the tax revenues it received.
This put the power to regulate the country’s economic well-being into the hands of a few rich men like the bank’s director, Nicholas Biddle. Jackson did not trust these men, who were not elected to their office by voters. Biddle also gave loans and donations to political figures.
Jackson thought these loans showed that the bank officials would use their positions to help themselves and their friends get richer. Jackson did not think they had the interests of the American people as their first priority.
When Congress passed a bill to recharter the bank, Jackson vetoed it. Jackson’s opponents could not come up with enough votes to override his veto. Jackson also moved federal deposits to other banks.
However, this caused many problems with the economy. One of the biggest problems was that people disagreed about what kind of institution or government structure was needed to regulate the nation’s economy.
For a while, banks in different states were given the job of holding the federal government’s money. Eventually, the independent treasury system we have today was created after years of economic troubles.
Picture Credits:
- Photograph of the Second Bank of the United States. It was built in Philadelphia between 1819 and 1824 by architect William Strickland. Independence National Historical Park Collection.
- Political cartoon entitled, “Symptoms of a locked jaw. Plain sewing done here.” This drawing was made in 1834 by David Claypoole Johnston. It depicts the conflict between Andrew Jackson and Henry Clay over the Bank of the United States. Clay is shown pinning down Jackson and attempting to sew his mouth shut.
Age of Jackson >> Tennessee's Presidents >> Andrew Jackson >> President Jackson
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