Why did Andrew Jackson want to destroy the Bank of the United States
Andrew Jackson fundamentally believed that the 2nd Bank of the United States was unconstitutional because it maintained monopoly power over the United States. He also believed that the Bank violated the idea that the role of a government that should stand for honesty, equality, and fairness. Jackson also argued that the bank's abuses of power made it unfit to store the nations public deposits. With help from his cabinet members and supporters in Congress, Jackson successfully removed federal government funds from the bank in 1833.
Jackson had been influenced by the experiences of Philadelphia banker William Duer, who had gone bankrupt during the Panic of 1792 and argued that a central bank was necessary for economic stability. Jackson believed that state banks should be given more control over the nation’s money supply and that it should not be concentrated in a single institution. He also resented Bank president Nicholas Biddle, who he saw as an elitist power broker in cahoots with Treasury Secretary William Crawford and banker Stephen Girard. Jackson also opposed the fact that many private stockholders like Jacob Astor and John Jacob Astor owned large percentages of Biddle’s bank and profited off of nations public deposits. Jackson saw this as a threat to America’s democracy because these private interests would have too much influence over American monetary policy and the national economy if they were left unchecked. He believed that only state banks could be trusted to act in America’s best interests rather than their own personal gain.
However, Biddle turned to members of Congress and businesspeople sympathetic to the bank to fight President Jackson, Biddle's action led to a split in Jackson's cabinet and eventual showdown over the bank's charter. The bank became a political issue in 1832 when Congress passed a bill to recharter it. Andrew Jackson vetoed the recharter bill and thus doomed central banking in America for almost one hundred years. His critics argued that his economic ignorance and political motives outweighed his constitutional principles. The creation of a new national bank was delayed until the early twentieth century when another President, Teddy Roosevelt, finally signed legislation creating the Federal Reserve System.
Andrew Jackson wanted to end the Bank of the United States due to his belief that it was unconstitutional and corrupt. He wanted to remove federal government funds from the Bank of the United States and place them in select state banks instead. This was a move that favored state banks, allowing them to control more money, while also giving Andrew Jackson more power over regulating the national economy. Jackson worked with his Treasury Secretary, Roger Taney, to remove public deposits from the Bank of the United States and transferring these deposits into state banks. This would take away some of the power from a central bank and store nations public deposits in different locations instead. The Bank of the United States had violated its 20-year charter when Congress failed to renew it so Jackson seized this opportunity for his own gain. He began moving federal governments deposits out of this institution which eventually led to its failure as it ceased operations in 1836.
Andrew Jackson was driven to his mission to destroy the Bank of the United States by the banks abuses he had witnessed and news of a new bank chartering. He saw it as a monopoly that would raise the cost of borrowing and hurt small farmers, which eventually led to him vetoing its re-chartering in 1832. There were also constitutional questions surrounding stockholding and Congress' power over banking. Andrew Jackson received his severest censure for this decision, but he did not waver in his stance. His Vice President, Martin Van Buren, filed a protest against its re-charter with Congress arguing that it went too far in its favoritism of wealthy stockholders. Andrew Jackson then began an intense fight against the Bank of the United States in an effort to prove its unconstitutionality and corruptness. He bought favorable press coverage about himself and political allies as well as spreading false rumors about powerful enemies who opposed him.
President Andrew Jackson and his cabinet, led by powerful Kentucky Senator Henry Clay, were determined to destroy the Bank of the United States. He was motivated by a desire to increase his own political power as well as economic power. The bank had been created in 1816 with leading businessmen, including Clay, as its directors. The bank was very powerful and Jackson wanted to flex his own muscle. He vetoed the attempt by Congress to renew its charter despite pleas from Clay and other supporters. He also wanted to end congressional oversight of its business dealings which he believed would lead to more corruption.
Andrew Jackson resented the Bank's power and its ability to control the United States economy. He believed that it was too powerful and was destabilizing the United States economy. He also accused it of bankrolling his Republican opposition in elections. Jackson saw the bank as a form of central banking, which he opposed on principle. He was also under electoral pressures from his supporters in Kentucky who wanted him to veto the bank bill proposed by Senator Henry Clay. Believing that Clay's younger board member, Henry Clay, had overstepped one man's power with his bill, Jackson warned younger board members that if they continued with their agenda they would face vetoes from him. Jackson vetoed the Bank Bill and Congress failed to override his veto due to opposition from Kentucky supporters. This made Andrew Jackson very powerful and caused much unease among settlers in unsettled western territories who felt nervous about having only one man in power over them.
Jackson was also angered that the recharter of the bank would have made Henry Clay a board member of Bank of the United States. This veto had been expected by Jackson loyalists who were in opposition to Clay's candidacy for president and hoped it would lead to their candidate's victory in the election. The veto caused a fatal confrontation between Jackson and Daniel Webster, who had been making decisions in favor of renewing the charter for the Bank of The United States since he was its last President. Webster argued that killing this veto would be bad for banks and citizens alike, but Jackson was determined to restore a younger board member and kill his veto. Jackson's opposition went beyond Daniel Webster, as Kentucky also opposed him and his decision to kill his veto. The state had supported Clay during the election, so they were looking for an opportunity to oppose Jackson's decision and arouse their own veto against him. This caused tension between Kentucky and Jackson that lasted until after he was no longer president.
Andrew Jackson's destruction of the bank was ultimately calamitous. The elimination of the Bank in 1836 lead to the Panic of 1837 and a broad based economic crisis. Since Jackson's term ended in 1836, President Martin Van Buren was left to pick of the pieces of the US economy after the collapsed in 1837.
- Brinkley, Alan - American History - A Survey, McGraw Hill, (2003)