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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.
[1] [2] The lack of a central bank to regulate fiscal matters, which President Andrew Jackson had ensured by not extending the charter of the Second Bank of the United States, was also key. The ailing economy of early 1837 led investors to panic, and a bank run ensued, giving the crisis its name. The bank run came to a head on May 10, 1837 ...
Jackson, who expressed deep hostility to most banks, vetoed the measure, ratcheting up tensions in a major political controversy known as the Bank War. [5] When Jackson transferred the federal government's deposits from the Second Bank to several state banks, Biddle raised interest rates, causing a mild economic recession.
An eight-decade stretch of American finance without central-banking oversight began on Sept. 10, 1833, when President Andrew Jackson withdrew the federal government's funds and support from.
In 1829, in his first annual message to the United States Congress, Jackson criticized the bank. Jackson believed that the bank was unconstitutional and worried about its centralization of financial influence. [7] He believed it favored the elites over farmers and laborers. In 1832, he successfully vetoed a bill to recharter the bank. [8]
The charter for the Second Bank of the United States, which was headed by Nicholas Biddle, was for a period of twenty years beginning in 1816, but Jackson's distrust of the national banking system (which he claimed to be unconstitutional) led to Biddle's proposal to recharter early, and the beginning of the Bank War. Jackson cited four reasons ...
The Second Bank was chartered by many of the same congressmen who in 1811 had refused to renew the charter of the original Bank of the United States. The predominant reason that the Second Bank of the United States was chartered was that in the War of 1812, the U.S. experienced severe inflation and
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