Who led the opposition to the Second Bank of the United States?
Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the bank in the 1830s. The bank was in general disrepute among most Americans when Nicholas Biddle, the third and last president of the bank, was appointed by President James Monroe in 1823.
Jackson's dislike of the Bank may have been fueled by rumors that Henry Clay, a congressman from Kentucky, was manipulating the Bank to help Jackson's opponent, John Quincy Adams, but it did not rise to a major campaign issue.
The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its replacement by state banks.
On July 10, 1832, President Andrew Jackson vetoed a bill that would have renewed the corporate charter for the Second Bank of the United States.
Jackson and Distrust of the National Bank
As president, Jackson made no secret of the fact that he opposed the Bank's upcoming recharter in 1836.
The Bank's most powerful enemy was President Andrew Jackson. In 1832 Senator Henry Clay, Jackson's opponent in the Presidential election of that year, proposed rechartering the Bank early.
Explanation: The anti-federalists in America (mostly the southern, agrarian workers) believed that the bank was a show of big federal government, and so they were against it.
The fate of the U.S. economy weighed heavily on President Andrew Jackson's mind in 1832 as he debated signing the renewal of the charter of the Second Bank of the United States.
Jacksonian Democrats opposed the Second National Bank for many reasons. To begin with, they believed a centralized, federal bank was unconstitutional and a violation of state sovereignty. They also believed a national bank favored wealthy investors and industrialists at the expense of farmers.
The bank's charter was unfair, Jackson argued in his veto message, because it gave the bank considerable, almost monopolistic, market power, specifically in the markets that moved financial resources around the country and into and out of other nations.
Which president opposed the Second Bank of the United States because he thought it was unconstitutional and favored the?
President Andrew Jackson announces that the government will no longer use the Second Bank of the United States, the country's national bank, on September 10, 1833. He then used his executive power to remove all federal funds from the bank, in the final salvo of what is referred to as the “Bank War."
The Bank War in which Jackson and his supporters killed the Second Bank was a reprise of the bitter fight 20 years earlier over the recharter of the First Bank of the United States (see the September 2007 Region).
Secretary of State Thomas Jefferson expressed his opposition to the Bank. Attorney General Edmund Randolph also pronounced the measure to be unconstitutional. Washington passed the arguments on to Secretary of the Treasury Alexander Hamilton, asking him for his opinion.
The Second Bank of the U.S. was chartered in 1816 with the same responsibilities and powers as the First Bank. However, the Second Bank would not even enjoy the limited success of the First Bank.
Madison based his argument against the bill on constitutional grounds, but he also apparently believed that the bank would prove inexpedient and would benefit a small number of individuals at the expense of the public (Notes on Banks, c. 1 Feb.
The bank was also opposed on constitutional grounds. Adopting a position known as "strict constructionism," Thomas Jefferson and James Madison charged that a national bank was unconstitutional since the Constitution did not specifically give Congress the power to create a bank.
The Bank was unconstitutional, because Congress had no power to charter corporations and withdraw them from the regulatory and taxing power of the states. (This was the Jeffersonian position, which the Supreme Court under Chief Justice John Marshall had rejected in the landmark case of McCulloch v. Maryland in 1819.)
Jackson—like Jefferson and Madison before him—thought that the Bank of the United States was unconstitutional. When Congress voted to extend the Second Bank's charter in 1832, Jackson vetoed the bill. To explain his decision to the nation, Jackson issued this veto message on July 10, 1832.
The Second Bank was similar in structure to the First Bank, but bigger; it had capital of $35 million, with the government again holding one-fifth of the shares. Like the First Bank, it was headquartered in Philadelphia; over the time it operated, it had offices in 29 major cities around the country.
Not everyone agreed with Hamilton's plan. Thomas Jefferson was afraid that a national bank would create a financial monopoly that might undermine state banks and adopt policies that favored financiers and merchants, who tended to be creditors, over plantation owners and family farmers, who tended to be debtors.
What was the Second Bank to fail in the US?
While the latter two were small regional banks, First Republic Bank was another major bank based in California's Bay Area, and its failure overtook SVB's to become the second-largest bank failure in U.S. history.
SVB's collapse marked the second largest bank failure in U.S. history after Washington Mutual's in 2008. While bank failures aren't uncommon, it's rare to see banks of SVB's size become insolvent.
By 1833 there were 23 "pet banks" or state banks with US Treasury funds. The institution of these pet banks led to a huge increase in land speculation, mainly due to the managers' inability to effectively handle and control the nation's money.
| Nicholas Biddle | |
|---|---|
| Portrait by William Inman, c. 1830s | |
| President of the Second Bank of the United States | |
| In office January 6, 1823 – March 3, 1836 | |
| President | James Monroe John Quincy Adams Andrew Jackson |
At first Jackson and Calhoun seemed to work together more smoothly than Calhoun had with Adams, but that situation was short lived. They disagreed over policy, especially the policy of nullification.
