Andrew Jackson shuts down Second Bank of the U.S.

Andrew Jackson announced in 1833 that the government would no longer use Second Bank of the United States. He then removed all federal funds from the bank in what was called the final blast of the “bank wars.”

The Second Bank of the United States was founded in 1816; five years after first national bank’s (created by George Washington) charter had expired. Traditionally, the bank was biased toward the urban and industrial northern states. Jackson resented the bank’s lack of funding for expansion into the unsettled Western territories and objected to the bank’s unusual political and economic power.

Jackson called for an investigation into the bank’s policies and political agenda as soon as he settled in to the White House. He planned to challenge the constitutionality of the bank, much to the horror of its supporters. In response, the director of the bank, Nicholas Biddle, turned to members of Congress like Kentucky Senator Henry Clay to fight Jackson.

Jackson presented his case against the bank in a speech to Congress; they decided the bank was indeed constitutional. Controversy continued for the next three years. In 1932, the divisiveness led to a split in Jackson’s cabinet and Jackson vetoed an attempt by Congress to draw up a new charter for the bank. All of this took place during Jackson’s bid for re-election; the bank’s future was the focal point of a bitter political campaign between the Democratic incumbent Jackson and his opponent Henry Clay. Jackson’s promises to empower the “common man” of America appealed to the voters and paved the way for his victory. He felt he had received a mandate from the public to close the bank once and for all.

In 1833, Jackson removed all the federal funds from the second Bank and redistributed them to various state banks. Jackson had succeeded in destroying the bank; its charter officially expired in 1836.

Source: Andrew Jackson shuts down Second Bank of the U.S.
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