Ch.12, Sec.4 – Prosperity & Panic

Mr. Biddle’s Bank

- the Second Bank of the United States was the most powerful bank in the country because it held government funds & issued money

- its president, Nicholas Biddle, set policies that controlled the nation’s money supply

Nicholas Biddle

- Andrew Jackson disliked the bank because of the loans Biddle gave to members of Congress to influence their decisions & the lending policies favored wealthy clients and hurt the average citizen

Ch.12, Sec.4 – Prosperity & Panic

- Jackson took an enormous risk in 1832 when Biddle asked the federal government to renew the bank’s charter…

- even though it was an election year for Jackson, he vetoed Congress’ passage of the bank’s charter because he felt the bank acted unconstitutionally!

- he felt the bank favored the few at the expense of the many “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…But when the laws undertake to make the rich richer and the potent more powerful, the humble members of society have a right to complain of the injustice of their government”…Andrew Jackson, 1832

Jackson’s War on the Bank

Ch.12, Sec.4 – Prosperity & Panic

- Jackson’s war on the bank became the main issue in the presidential campaign of 1832

- Jackson won re-election in 1832 & set out to destroy the bank by the end of his 2nd term in 1836

- eventually, the bank went out of business and Jackson had won, but the economy would suffer terribly

Andrew Jackson

Ch.12, Sec.4 – Prosperity & Panic

Prosperity and Panic

- the small banks had issued too much paper money, which made the dollar worth less and created inflation

- to fight the effects of inflation, Jackson ordered all people to pay for future lands with gold or silver

Ch.12, Sec.4 – Prosperity & Panic

- Jackson left office in 1836 and his vice-president, Martin Van Buren was elected as president to replace him

- unfortunately for Van Buren, a few months after he took office the Panic of 1837 happened

Martin Van Buren

- people took all their paper money to banks & demanded gold/silver for them

- therefore, the banks could not pay the federal government for their debts & the country sank into a deep depression

Ch.12, Sec.4 – Prosperity & Panic

- the Panic of 1837 & its depression left the country with terrible hardships

- 90% of factories in the Eastern states closed, people went hungry & homeless, and cities were hit the hardest

Ch.12, Sec.4 – Prosperity & Panic

The Rise of the Whig Party

- many politicians wanted Van Buren & the government to help the economy, but they refused

- Van Buren felt that the less government interferes with private pursuits the better for general growth

- unfortunately for Van Buren, many Americans blamed him for the depression, which made it almost impossible for him to get re-elected in 1840!

- Van Buren also had to face a new political party, the Whigs, in the election of 1840

Ch.12, Sec.4 – Prosperity & Panic

- the Whig Party opposed the concentration of power in the chief executive & the mockingly called Andrew Jackson, “King Andrew”

- in 1840, the Whigs chose Ohioan William Henry Harrison to run for president & John Tyler to run for vice-president

- the Whigs used the phrase “Tippecanoe and Tyler too” for their election slogan

William H. Harrison

Ch.12, Sec.4 – Prosperity & Panic

The Election of 1840

- Harrison was represented by the Whigs as an Ohio farmer, War of 1812 hero, westerner, and common man

- Harrison won the close election of 1840 over Van Buren, but died of a cold only one month into his presidency!

- Harrison was the 1st president to die in office & John Tyler took over where Harrison left off, especially with the role concerning westward expansion

John Tyler