The Bank War

The Bank War

President Jackson vetoed the renewal of "Second Bank of United States" charter in 1832, kicking off the so-called Bank War. President Jackson vetoed the bank's charter because he believed that the bank constituted a monopoly and exerted to much control over the nation's financial system. President Jackson believed the second bank was a monopoly because it was the only nationwide bank at the time and a private institution governed by board of directors. This veto enraged members of the upper class. As a result of the veto, an motion to impeach was brought forth, instead Jackson was censored by the senate. Jackson was not in favor of the use of paper currency, and thought that its use was dishonest. In an effort to finally break the Second Bank of the United States, Jackson order all federal money to be removed from the bank. In retaliation, the bank's president began calling in loans, creating a financial crisis. The actions of the bank backfired when public support for the bank was lost. This war between Jackson and the bank ultimately led to the two-party system. Jackson formed what would become the Democratic Republicans, and Senator Clay, who opposed President Jackson, formed the Whigs out of the National Republicans. The Bank war was significant because it resulted in fundamental changes to the American political system, making politics, and not just social class, important to the growing numbers of voters. The two party system allowed the interests of small towns and people on the frontier to be represented along with the cities and centers of commerce.

References:

Mintz, S. (2007). Digital History. Retrieved October 22, 2010 from

http://www.digitalhistory.uh.edu

Bank War. (2010). The History Channel website. Retrieved 2:17, October 22, 2010, from http://www.history.com/encyclopedia/topics/bank-war