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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.
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.
In 1833, Jackson had federal deposits withdrawn from the bank, causing great political controversy. [8] [7] In order to do this, on September 23, 1833, Jackson had dismissed Secretary of the Treasury William J. Duane, who had refused orders to do this, and in his place made the recess appointment of Roger Taney as secretary of the treasury. [9]
Jackson mobilized his political base [76] by vetoing the recharter bill [73] and, the veto sustained, [77] easily won reelection on his anti-bank platform. [78] Jackson proceeded to destroy the bank as a financial and political force by removing its federal deposits, [79] [80] [81] and in 1833, federal revenue was diverted into selected private ...
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 ...
Jackson faced heavy criticism for his actions in the Bank War, but remained popular among the general public. He won a majority of the popular vote and 219 of the 288 electoral votes, carrying most states outside New England.
Biddle's application set off the "Bank War"; Congress passed a bill to renew the national bank's charter, but Jackson vetoed it, holding the bank to be unconstitutional. [141] Clay had initially hoped that the national bank re-charter would work to his advantage, but Jackson's allies seized on the issue, redefining the 1832 election as a choice ...
The Bank War became the key issue of the 1832 presidential election, which saw Jackson defeat a challenge from national bank supporter Henry Clay. Taney's unyielding opposition to the bank, combined with Jackson's decisive victory in the election, made the attorney general one of the most prominent members of Jackson's cabinet. [24]