THE BANK CONTROVERSY

The Bank Controversy Of 1832

The Bank Controversy Of 1832

Introduction

The Second Bank of United States was chartered in 1816 with same powers and responsibilities as its predecessor. This bank, however, would not enjoy same success as first. Designed to control and stabilize national currency, Second Bank of United States grew into the powerful political force before its eventual demise. As Bank's success grew, so did its criticism and disapproval by populace. Ultimately, National Bank's ruin was brought upon itself by its own successes. The Bank grew so big that it became the source of conflict in national government; the conflict which set President of National Bank against President of United States. Marked by one of most prominent vetoes ever declared, Bank of United States' demise had dramatic effects on future of United States government. The battle for Second Bank altered relationship between electorate and President, and reinforced Jacksonian concepts of President being an all-powerful force. The Second Bank of United States' demise led country into "free banking era", the time when only banks were those chartered by states. The Second Bank of United States led the short yet influential existence, whose failure was result of its own success.

Discussion

All was going well for Second Bank of United States; so well that Second Bank decided to proposes its charter four years early in 1832. Langston Cheves and Nicholas Biddle, son of the rich merchant and attendee of University of Pennsylvania at age of 10 (The Executive Veto, 1994), had turned the distantly branched bank into the genuine central Bank. It was now that demise of Second Bank of United States began. President Jackson disliked Bank of United States because he hated speculation of paper monies (The Executive Veto, 1994). He had previously almost gone to debtors' prison (The Executive Veto, 1994), and stated that Bank of United States threatened individual liberty. Jackson believed that Bank of United States' money had been used to hurt him in his election (Whig Party Emerges, 1832-1840), and claimed Bank helped rich at expense of poor (The Executive Veto, 1994). "It is inconceivable how present stockholders can have any claim to special favor of Government," (Jacksonian Ideology, 2001: 34) Jackson declared to public. The fact that interest was given to those who owned stock and not to those who paid taxes bothered Jackson. In 1832, now prospering Bank of United States introduced the bill for the recharter four years early. At that point in time, majority of public still backed National Bank. This was not so with Jackson, however. The proposition enraged Jackson, who was faced with the difficult decision. Jackson's reelection was coming up, and if he passed bill, he would win reelection, but would allow Bank of United States to continue. On other hand, Jackson could veto bill in order to end Bank of United States, but risk losing following election to Clay (Whig Party Emerges, 1832-1840). Jackson's final decision was to veto bill in one of most controversial vetoes of all ...