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How Did The Bank War Lead To The Panic Of 1837

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Economic issues are not uncommon in America. The panic of 1837, Depression during the 1920’s, stock market crash in 1929, $17 trillion debt America is in today, and a multitude of other issues are all proof that America is perhaps less financially stable than it seems to be. The Bank War is one of the many puzzle pieces that fit together in the intricate financial history of the United States. Linking Jackson’s role in the Bank War directly to the Panic of 1837 would not only be inaccurate, but would deny the complexity of other causes that were contributing factors. A further analysis of the sequence of events revolving around the Bank War depict that Jackson is only one of many other causes that led to the Panic of 1837. Jackson’s opposition …show more content…

Some historians question whether or not this was a victory. Despite Jackson winning the Bank War, there were still many currency issues in America that remained unresolved. Some of these issues included 40% of money circulating in America was foreign currency, debates about gold over silver, and issues of hard money versus paper money. (Markham 54) As America struggled with financial issues, it only worsened when the Coinage Act of 1834 passed. The change from gold to silver created new problems, including the over-value of gold, almost wiping out silver from circulation, and the weight of the dollar going down by 6%. (Markham 54) Since only Jackson focused on taking power away from people who would monopolize the bank, it distracted him fixing the escalating economic issues in America prior to the Panic of …show more content…

Markham states that “a speculative fever had seized the nation and the growth of the state banks after the deposits were removed from the Second Bank led to the expansion of credit and inflation of prices”. (55) The speculative fever had many people buying land even though there was a high financial risk in doing so. To combat this, Jackson passed the Specie Circular in 1836 which required payment for public lands to be coins rather than banknotes also known as specie. As a result, the Specie Circular decreased the amount of money and a big portion of specie was removed from private holders. Although Jackson was successful on combating speculative investments, people were unable to pay off their debt which caused a financial crisis for banks. Risky investments in property and the Specie Circular intertwine as a new contributing factor the panic that would come in

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During his second term, in the spring of 1833 after being distracted by the Nullification Crisis did he again focused on destroying the Bank. He withdraws the government’s money from the bank and was places in the state banks on September 25, 1833 by the ordered of the Treasury in the beginning of October. Biddle, in effort, countered that the Bank will ceases the offering loans nationwide which cause the nation to a near-panic since the state banks were unable to meet the demands of their loans. Despite that, Jackson becomes even more determine to stop the Bank. He pushes toward the use of “hard” currency in 1834.

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Jackson thought that if charters were favored towards one area of society instead of another, then some people would view it as favoritism towards an elite society. Jackson believed that that was a direct violation of equal liberty of republicanism so he didn’t re-charter the Bank of the United States. The market revolution involved the creation of canals, roadways and railways, foreign investment, new technology, and industrialization. The fact that Jackson didn’t re-charter the Bank of the United States led to the Panics of 1837 and 1839, both of which occurred after he left office. Watson argued that Jackson was extremely self-confident.

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In the era of 1837, was the starting point for the new establishment for banks all over the United State. In the beginning, banks were in the center of importing and exporting and funding paper bills (Foner 365). The banks funded businesses and other industry to trade, buy or sell opening the pathways to overseas. Thus, to a wider range of people who flavored western goods and in return helped western prospered. However, without a proper regulation and restriction of issuing out bills put a downfall in the economy, unbalance system that cause the Panic of 1837 (Foner 366).

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Andrew Jackson vetoed the bill re-chartering the Second Bank in July 1832 by arguing that in the form presented to him it was incompatible with “justice,” “sound policy” and the Constitution. 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. That market power increased the bank’s profits and thus its stock price, “which operated as a gratuity of many millions [of dollars] to the stockholders,” who, Jackson claimed, were mostly “foreigners” and “our own opulent citizens.” He then suggested that it would be fairer to most Americans to create a wholly government-owned bank instead, or at least to auction the Second Bank of the US’s monopoly privileges to the highest bidder.

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Speculation and the decrease in price of different products caused the stock market to become unstable. Historical context during the 1830s could have impacted the banking crisis. Different governmental movements and acts like the Religious Revival Movement spread across the country in hopes to bring back religiousness

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435 Words | 2 Pages

The Panic of 1837 starts in New York when banks first suspend installments of specie. Taking after the breakdown of credit office, banks can no more recover coin notes in gold and silver. Alongside the issue, a gloom in England causes the cost of cotton to drop and finishes British advances to the United States. An officially insecure economy now experiences more obligations and unemployment. 09/05/1837: in light of the financial emergency, Van Buren requires an uncommon

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The government was running a surplus, Jackson killed off the national bank so

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Duane, and Roger B. Taney, until he found a secretary willing to distribute the money from the National Bank to smaller banks, Levi Woodbury. With this, local state banks had all the responsibilities and power of banking; only they could give out loans and invest. But, after irresponsible investments, the banks quickly lost the funds and began the process of the U.S. falling into the Panic of 1837. On top of the bank’s misjudgments, the value of the paper currency was falling due to Jackson’s Specie Circular, an act that made only gold and silver an acceptable currency for land. Such economic instability undermined the people’s faith in the economy and eventually lead to the Panic of 1837, a major financial

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1424 Words | 6 Pages

This cartoon emphasizes Jackson’s populist appeal and his commitment to democracy; in a way, he is depicted as a defender of the constitution and the people's right to governance and self-governance. He believed that the president should have the power to prevent Congress from passing laws that he deemed unconstitutional or harmful to the interests of the American people. While Jackson's use of the veto power was controversial at the time, this cartoon reflects the view that his actions were motivated by a deep commitment to democratic principles and a desire to empower ordinary

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As a result due to bank power, the Commercial Law was established to help charter businesses and create limited liability for investor’s. Developers were legally allowed to buy land from the unwilling. It also didn’t allow employees who were hurt in the workplace to lay blame onto their employers. These things enabled investors who were close to banks to succeed and increase their wealthy. There were many people who believed that this would lead to a collapse in the economy for those with unequal privileges, and despite the large boom in the economy the first few years, there was the panic of 1819.

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141 Words | 1 Pages

The Panic of 1837 was a financial crisis, or market correction, driven by tentative fever. Inflation became uncontrolled after federal deposits to the Second Bank of the United States were withdrawn, based on the assumption that the government was selling land for state bank notes of questionable value. The Panic of 1837 involved Andrew Jackson administration issuing the Specie Circular, declaring that it would accept only gold and silver as payment for public land. Prices fell about 25 percent and many businesses began to fail and farmers were unable to pay their mortgages because of their decline in income and because they were losing their jobs. Martin Van Buren, who became president in March 1837, was largely blamed for the panic.

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468 Words | 2 Pages

Throughout the early 19th century, changing politics and an evolving society in America impacted all classes of people, specifically the white working class. Jacksonian Democratic ideals was influenced by the working class, and the white working class benefited from President Jackson’s decisions. During the year of Jackson’s presidential election, the Workies, which consisted of working men, wanted to protect individuals who earned money from arduous labor, but failed to make payments punctually. Jacksonian Democrats realized the Workies language was valuable in the fact that beliefs of the Workies group echoed through Jackson’s party.

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852 Words | 4 Pages

There it became an Indian powerful removal policy in support of western land prices to be cheaper mirrored his self-government's provision in the southwestern frontier “(class notes/recorded notes, chapter 11)”. Then there were The Second Bank of the United States was a corporation chartered by Congress to provide a national paper currency and manage the government's finances: soft money was against the National Bank- They wanted things fast. The hard money was done with control. Jackson was pro-hard money but both were against the National Bank.

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1077 Words | 5 Pages

Before becoming the seventh President of the United States, and before the Trail of Tears and the conquering of the National Bank, Andrew Jackson was a war hero and a man tough enough to earn the reverent nickname of Old Hickory. On January 8, 1815, Major General Andrew Jackson led the American forces to victory against the British at the Battle of New Orleans, the battle that is considered the last of the War of 1812, even though the Treaty of Ghent had already been signed. As Mike Scott (2017) put it, it was a battle that was “an unlikely American victory that changed the course of the city’s, and the country’s, history.” The Battle of New Orleans is a great piece of history that occurred within our own state that is always worth

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In this attack, he moved about 20% of United States’ money into private banks. These banks were known as ‘’pet’’ banks because they politically supported Andrew Jackson. This causes what we know as The Bank War. Andrew Jackson enlarged credit by doing away with the bank. Andrew Jackson then moved the money from those banks into the private ones that only supported him.

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