What role did Jackson's financial policies play in the economic boom and financial panic of 1837?"
President Andrew Jackson' financial policies played an essential part in the economic boom and financial panic of 1837. Andrew Jackson did not approve of the idea of a National Bank because he thought it was unconstitutional so when the Bank needed to renew their charter President Jackson refused. Jackson's refusal to renew the charter with the National Bank caused the retraction of funds that were abetting the Bank. The funds were instead given to state banks and private banks because they spent the money less conservatively and also posed less of a threat to Jackson's policies. This lead to bank failures whenever there was economic trouble. When President Andrew Jackson "killed" the National Bank, it prevented the ability to moderate the economic booms and busts that a country naturally goes through.
Sources: http://www.wisegeek.com/what-is-the-panic-of-1837.htm Class notes Class Discussions
As a self-made man from west of the Appalachian Mountain, President Andrew Jackson distrusted and hated the Second National Bank and paper money. His financial policies, aimed to kill the National Bank, to control paper money and to enrich poor people from the west, were major causes of both the economic boom and financial crisis in 1837. In 1832, Nicholas Biddle, the president of the National Bank, applied for a new charter for the Bank. Not only did President Jackson veto the recharter bill, but he officially announced his war against the Bank as well. According to him, the Bank and its stockholders were creating monetary aristocracy. Most people supported the President’s claim. Though the charter of the Bank ran till 1836, Jackson planned to eliminate the national Bank before the charter ended. Jackson decided to drain money from the National Bank to pay the national bill and to stop depositing new funds in the National Bank. To regulate the economy, he set up “pet banks” around the country. The Deposit and Distribution Act of 1836 stipulated that the surplus funds in the Treasury should be distributed to the states, that is, the “pet banks”. By 1833, there were already 23 pet banks, most of which were in the western territory. In this way, Jackson removed the governmental money from the national Bank to many unstable small banks. At first, these policies worked well. Spurred by the distributed wealth, the small banks lent money wildly. As the economy grew rapidly, so did many infrastructure programs and land-selling in the west. From 1830 to 1836, sales of land rose from $2 million to $24 million. However, the over-speculation of the pet banks foreshadowed the ensuing financial crisis. Lacking proper regulation and restriction, these pet banks lent great amount of money without careful consideration. Paper money was not backed up by gold and silver, and the prices were soaring. To deal with the inflation and excessive land speculation, Jackson issued the Specie Circular, which stated that public land trade with the Treasury could only be done in gold or silver. Because there was not enough gold and silver in circulation, the land boom quickly stopped. But soon, small banks began to feel pressure to pay hard currency, and they suspended hard currency payment to everyone. Many pet banks went broke because they did not have enough money to support themselves. Since no National Bank could regulate economy and solve the problems now, the financial crisis of 1837 came.
Jackson’s ill-advised financial policies caused a false economic boom which, when retracted, created a financial panic. Jackson wanted small western farmers who had bad credit to get loans. Jackson accomplished this by crediting economic boom was caused by “pet banks”, the 23 of local banks west of the Appalachian mountains, who Jackson gave money to that recklessly gave out loans to individuals who could not afford to pay them back. This was a short-term benefit but in the long-term detrimental: people with these loans spent their money into the economy, which put more money into circulation, but this falsely floated the economy. The money that was being leant was not backed up in gold and silver, because of the vast amount of loans being given out, which set up the economy for disaster. Next, Jackson executed the “Specie Circular” which declared that public lands had to be bought with gold or silver currency, which put an end to the land boom. This caused a rush of individuals wanting to trade their paper money for gold, which the banks did not have. The influx of paper money in circulation not backed up by gold forced a rush on the banks. Individuals rushed to turn in their paper money for gold, which was not there. Jackson—known as “the people’s President”— hurt all of his beloved supporters individually through his reckless financial policies.
President Andrew Jackson’s financial policies did indeed play a vital role in the economic boom and financial panic of 1837. Jackson introduced democratic principles that appealed to the people such as a two party system, conventions instead of caucus’, paper ballots, end of land requirement for voting, and the elections of many more office holders. All of which still stand in today’s American society in terms of politics. These ideas were innovative and turned over a new leaf in US government. But, Jackson didn’t make the smartest of decisions. During the War of 1812, the National Bank dies. Soon after the people knew it was needed. In 1836, the charter for the second National Bank was going to expire. Jackson vetoes the bill to re-charter the National Bank and the bank dies again. Newly appointed Sec. of State Roger B. Taney than takes all the money out of the National Bank and put it into the local smaller “Pet Banks”, and most of them having been in the west where Jackson is from. Since these smaller banks were able to give out more loans to people who probably couldn’t pay them back, it created inflation. There was a surplus of money in the US. Andrew Jackson did good things as a president, but his bad decisions carried on to dominate Van Buren’s presidency and eventually lead to the Depression of 1837.
Andrew Jackson’s resume, at first glance, is much less impressing then previous presidents, so maybe that was a forewarning that he wasn’t exactly well equipped to be our seventh president. The economic boom and the financial panic of 1837 would be the result of our inexperienced seventh president. Before elected into office, Andrew Jackson heard word from the peoples of the west. The banks in the west demanded that they be given more money so that the poor and hardworking citizens could receive loans more easily and get them up and running. The banks pleaded that the national bank be less conservative so that the citizens in the west could have a better chance at achieving their financial goals. Jackson saw this cry for help as a perfect opportunity to win some votes on election day. With the win of presidency, Mr. Jackson, would not hesitate to spread the wealth of the national bank with the rest of the nation. In order to do this he would need to fire the greatest president of the treasure, Nicholas Biddle. His ways with the national money avoided inflation, confusion, and depression. Had Nicholas Biddle remained as president of the treasury during the time of Jackson, it might be safe to say that the panic would have never happened. However, when Jackson came into power, he replaced Biddle with a much more westernized and generous man, Roger B. Taney, who would do exactly what the people to the west wanted. Before Jackson could take the step he needed to diminish the national bank he would have to pass his ideas through the Supreme Court. When the case was brought up in the court they ruled his decision to be unsatisfying and rejected his request. Because Jackson believed that the executive branch was the most powerful branch of the government and because of his stubborn attitude, he completely ignored the court’s ruling and went through with his plan. The National banks money would be distributed to many banks in the west. Loans would be now easier to receive for the civilians and collateral would not be an issue. This might have seemed like a generous thing for the president to do, however now that more money was in circulation then there actually was, inflation became an issue. When the panic occurred, the government required all banks to pay up, and they could only pay with gold or silver. Due to the fact that most of these banks had given out more money than they had, many of them went bankrupt. The whole country and the rest of the world’s economy might have crashed if it were not for some very large conservative banks in the east that helped the national bank to get back on its feet. Jackson would be the first president from the west of the Appalachian Mountains, and he would be the first president not from the original thirteen colonies. This would prove to be a weakness of his, for the outcome of his presidency was deliberating. His lack of economic knowledge and his involvement in areas which did not need him would lead to the panic of 1837. Quite frankly if he had left our treasury alone and had just sat in a chair all day, he would have done better for the country then what he decided to do. Credits : Notes From Class Mr. Gulotta. Katie Soper
President Jackson was a person who strongly hated the Bank of the United States. He believed that it was a symbol of special privileges, and he distrusted paper money, preferring to rely on gold and silver. Jackson wanted to get rid of the Bank, and in order to do so, he deposited no new funds there, and instead paid the bills of the country using the funds that were already on deposit. He hired Attorney General, Roger B. Taney, who deposited funds of the government in local banks around the country. Those banks started lending their funds so uncontrollably, that it caused the economic boom. The more money they issued, the more speculators were using it to buy lands. Jackson, with his hatred for printed money, issued “Specie Circular”, which said that only gold and silver could be used to pay for public lands. The economic growth stopped at once. Congress then decided to give the states the surplus funds that were in the Treasury. The banks began to restrict their loans and stopped using gold and silver instead of bank notes. This, along with the coincidental crisis in Britain and the bad year of crops for farmers brought the financial panic to the country in 1837. Jackson’s unreasonable and ruthless behavior led the United States into the financial crisis.
Sources:
A History of the United States by Daniel J. Boorstin, Brooks Mather Kelley
Jackson’s poor financial policies lead to the economic boom and then the financial crisis of 1837. Jackson disliked the National Bank, because it would only give loans if the person requesting one truly deserved one, and was eager to destroy it. The National Bank would establish a strong line of credit and collateral before loaning to anyone. The western settlers who were strong supporters of Jackson did not have any collateral or a strong line of credit making it very hard for them to receive a loan. Jackson believed that the National Bank was favoring the established easterners. Jackson took all of the money in the National Bank, which conservatively handed out loans, and put it into twenty-three smaller pet banks around the country. These pet banks gave out loans much more than the National Bank had, not establishing a line of credit or collateral before handing a loan out. The over speculation by the pet banks lead to the financial crisis. When people could not pay the loans the banks needed more money and the treasury printed more disrupting the balance between citizens and currency. To deal with inflation Jackson made Specie Circular, which made it so you could only buy land with gold and silver. This caused a rush to buy up gold and silver. The banks did not have gold to back up the inflation of paper money making it worthless, which hurt the entire country in a major economic depression.
Andrew Jackson’s presidency will always have a dark shadow shrouding it because of the way he handled his politics. Jackson ruined his presidency because of his actions will financial policy. When Jackson was elected president, his votes mostly came from states west of the Appalachian Mountains, where Jackson is from. These states do not have that much money, and couldn’t get loans from the national bank. During Jackson’s second term, he fired the President of National Bank, Nicholas Biddle. Biddle’s ways of banking kept the United States in good financial standing but he wouldn’t let Jackson move all the money to many different banks, so Jackson found someone who would. Roger B. Taney was appointed Jackson’s Secretary of Treasury and did what Jackson asked. Taney removed all the money from the national bank and spread it around 23 “Pet Banks” west of the Appalachian Mountains. Jackson then made it easier for farmers in the west to get loans without collateral. This started the downfall for the banks because they had to lend to borrowers who couldn’t pay the money back. These actions by Jackson led to the downfall of the U.S economy and the start of the financial panic of 1837.
Many of Jacksons decisions and ideas led to the economic boom and later the panic of 1837. Jackson hated the bank. He believed that it was unconstitutional and did not trust the paper money of the United States. Jackson also believed that the stockholders of the bank were becoming corrupt and forming somewhat of an aristocracy. When Henry Clay teamed up with Nicholas Biddle, the head of the national bank, they though that they would be able to make the people turn against Jackson and make him look foolish. Nicholas Biddle decided to apply for a new charter for the Bank in 1832, four years before the old charter was up, so that the anti-bank Jackson would veto the bill and go against congress and loose supporters. Clay, Biddle and the whig party then thought that when Jackson would veto the bill then congress would over-ride the bill and the bank would be saved, but Jackson would look foolish. However, when the bill got to Jackson he chose to veto the bill and send it back through congress, but congress did not over-ride the bill and the national bank was gone. Clay and Biddle's plan had failed and backfired, the people supported Jackson and his decision to veto. The bank was making the rich richer and Jackson wanted to stop this, "He proved that he did understand what the people wanted." Jackson had stopped the bank in its tracks and he openly announced that he was prepared to destroy the bank before its charter ended in 1836. Jackson chose to deposit no new funds into the bank and to use the money already in the bank to pay the nations bills. This rapidly destroyed the bank and took the nations money out of its hands. Jackson then turned to Roger B. Taney to put the government funds into new "pet banks" that were to be established west of the Appalachian mountains. With Nicholas Biddle out of a job and the "pet banks" in place, the economic boom was about to occur. Jackson's appointed assistant Taney, proceeded to deposit government funds into these new banks. These new banks then began lending out money carelessly and loaned money to people who would not be able to pay the bank back and caused an economic boom. At this point debt of the government was paid off and land sales skyrocketed. The sales rose from $2 million to $24 million in 6 years. These new "pet banks continued to loan money and contribute to this huge economic boom. Jackson's hate towards paper money would eventually lead to the end of the economic boom and would lead to a stoppage in economic growth. Jackson decided to input "Specie Circular," "which forbade the Treasury to receive anything but gold or silver in payment for public lands." These costly mistakes would lead to a big problem in the United States economy. Unfortunately, Martin Van Buren was in office when the panic of 1837 hit and had to deal with Jackson's mistakes. The Banks then began to restrict their loans and it became more an more difficult for people to get money from the bank. By 1837 there was an economic panic and in 1839 there was an intense depression all because of Jacksons careless financial policies. And at this point in time there was no National Bank to save the country from this economic hardship.
SOURCES: Textbook Notes from class Christine Qi Mr. Gulotta
President Andrew Jackson played an impactful role in the economic boom and financial panic of 1837. Jackson, the first president to come from a state other than the original thirteen, wanted to expand and explore the west. In order to help push people into the west, Jackson got Nicholas Biddle, the Secretary of the Treasury, to give money to the 23 banks that resided west of the Appalachian Mountains. These “Pet Banks” were capable of giving money to these frontiersmen who had bad credit unlike banks in the east who would not loan money. Because these banks were giving out money, an economic boom was created and more and more people began move to the west. Unfortunately, after these frontiersmen had settled in the west, many of them could not pay back their loans. Therefore, the National Bank had no money and was killed after it was not renewed. Overall, Jackson’s careless economic policies and hatred towards the national bank led to the economic boom and financial panic of 1837.
Credit:
Notes from Mr. Gulotta's F period Class, Colin Fuss, Brooks Kiley
President Andrew Jackson, who grew up in the Western United States, did not trust the National Bank or paper money. Jackson was the victorious commander at the Battle of New Orleans during the War of 1812, which gained him his fame. In 1828 Andrew Jackson, also known as “Old Hickory”, became president of the United States. Jackson believed that the he held all power and must surround himself with people who support his ideas only. Despite Nicholas Biddle’s sound Banking that avoided inflation, confusion, and depression, because Biddle’s system favored Eastern Business Men over Western farmers, Jackson did not support Biddle’s ideas. Jackson wanted the small farmers of the west to get loans from the bank without any collateral and claimed that the bank is unconstitutional. As the Whig Party failed in hope to win the next election, Jackson ensures that the National Bank is dead. Jackson appoints Roger Taney as his new Secretary of Treasury and removes all money from the National Bank, putting it into his 23 “Pet Banks”. Putting all of the money in these banks and eliminating the national bank leads to the Depression of 1837. These banks, mostly located in the West were not dependable banks but Jackson wished to build up the Western economy. The banks did work for some period of time, they lent out money to whoever needed a loan and people were becoming wealthier. However, this economic boom did not last, the “Pet Banks” were not stable and gave loans they could not back, creating inflation. In other words, the over-speculation put the country in a tough position and the surplus money of the National Government is returned to the states. Jackson’s lack of knowledge and careless economic decisions led to the Financial Panic of 1837 under the new president, Martin Van Buren. Yet we must not forget his policies did play a role in the economic boom by growing the United States economy in the West.
President Andrew Jackson made his opinions about the second Bank of the United States public. He believed the primary goal of the bank was only to help the rich who lived in the east gain more. Jackson wanted his supporters, those who were small farmers in the west to receive the same benefits as the rich in the east. The President claimed the National Bank was unconstitutional and ignored the Supreme Court’s decision in McCulloch v. Maryland. Unfortunately, Jackson’s opinions about the bank caused him to make some changes in his financial policy that ultimately spurred the Panic of 1837. Early in 1832, Nicholas Biddle, the president of the National Bank applied for new charter. Jackson immediately vetoed the proposed bill. His primary motive was to kill the Bank in order to please his voters. Therefore, Jackson decided to make a rash decision. He would deposit no new funds in the Bank and pay the nation’s debt with funds already deposited. Jackson had some trouble finding a Secretary of Treasure who would carry out his actions, in fact Biddle was fired because of this issue. Jackson did however; find the perfect man for the job, Attorney General, Roger B. Taney. Taney deposited government funds in various “pet banks” throughout the United States, mainly the west. Jackson’s pet banks, lent funds out carelessly and recklessly, ignoring any future consequences. Short term, there was economic growth, but long term these effects were disastrous. In 1836, Jackson issued the “Specie Circular” which only permitted public lands to be paid for with gold or silver. The short economic boom was suddenly halted. Around the same time, Congress also voted to distribute to the states the excess funds in the Treasury. The United States was about to face the consequences of Jackson’s rash decision-making and financial policies. The banks responded by tightening their loans and putting a stop to redeeming bank notes in gold or silver. It didn’t help that while all of this was going on in the United States, Britain was suffering a financial crisis, Britain playing a key role in the short-term boom. All of these factors spurred the financial panic of 1837, Jackson’s rapid financial policies being the main factor.
Jackson’s financial policies played a direct role in the economic boom and financial panic of 1837. President Jackson strongly distrusted the National Bank and felt it was unconstitutional. In 1832, Henry Clay persuaded Nicholas Biddle, president of the National Bank, to apply to renew its charter early in order to make Jackson look like a fool. The plan was to have Jackson veto the bill and then have Congress override the veto. After Jackson vetoed the bill there were not enough votes in Congress to override the veto, and Jackson killed the National Bank. When Jackson killed the bank he decided not to wait four more years until the charter expired. First, he chose not to deposit any new funds and to pay all the national bills with what was already in the bank. Next, he gave large government deposits to “pet banks”, most of whom were located west of the Appalachian Mountains. These pet banks loaned money wildly to people who had bad credit and would not be able to repay the loans. At the beginning this was the economic boom. During this time land purchases grew immensely, from less than $2 million in 1830 to $24 million in 1836. In addition, Jackson also had a deep distrust of paper currency, which in addition to the high inflation of paper currency; led to him executing the “Specie Circular”. The “Specie Circular” stated that public lands could only be bought using gold or silver. Due to the fact there was not enough gold and silver circulating and that many of the local “pet banks” failed caused the financial panic of 1837 during his successor, Martin Van Buren’s presidency.
Morgan Handwerker
Sources: Notes from Class Mr.Gulotta A History of the United States textbook
As Martin Van Buren gained presidency of the United States, the country was rapidly falling into a financial panic. During Andrew Jackson’s presidency new economic laws and policies in the United States were created, this led to a brief economic boom for individuals, while the American economy as a whole was badly structured and was falling apart. Jackson’s lack of economic knowledge caused a financial crisis in the United States in 1837. Nicholas Biddle, the president of the Bank of the United States, ran a sound banking system that avoided economic inflation, confusion, and depression (slide #18); his sound banking gave no opportunity for people with low economic stability. Jackson, known as the “people’s president,” disagreed with Biddle’s methods and looked for a new Secretary of Treasury who would help him abolish the National Bank. In 1833, Roger B. Taney was appointed as Secretary of Treasury. In order to endure Jackson’s demands of helping small western farmers receive loans without collateral, Taney began depositing government funds into “pet banks,” state banks or local banks, ultimately removing all the capital from the National Bank thus eliminating the National Bank itself. Then the government lost all its economic power when congress chose to allot all surplus government funds to the states. Meanwhile, the “pet banks” began giving out numerous impulsive loans; this led to reckless spending and an uncontrolled economic growth as over speculated land was being purchased (Pg. 241). This economic growth and land boom would suddenly reach a stop, quickly, followed by an economic crisis. In 1836, Jackson issued his “Specie Circulator,” which, “forbade the treasury to accept as payment for public land anything except gold & silver or National Bank Notes.” Immediately, the land boom stopped. As England entered a financial crisis, the flow of gold and silver from the British into the United States, from trade, that had helped finance the American economic boom, disappeared. Since the “pet banks had loaned more specie than it could pay back, the government did not receive enough bank notes because the “pet banks” did not have them, making the banks be in debt. (Pg. 242) When Martin Van Buren assumed presidency, it was too late for him to remedy the economic problems Jackson had caused. Thus the mayor reasons for the economic crisis of 1837 were all caused from Jackson’s lack of economic knowledge (Slide #25): putting the National Bank funds in “pet banks,” eliminating the national bank, and irresponsible bank loans. After this, the economy was about to collapse, and Jackson’s “Specie Circulator” finished the job causing “pet banks” to become indebt: triggering the American economic panic of 1837.
Andrew Jackson was a practical, self-made man with strong prejudices He was especially bitter against the Bank of United States, which was also known as the “monster”. He hated paper money in part because he suffered earlier in life from a devalued paper notes. Akin to Thomas Jefferson’s ideals, Jackson envisioned an economy of small farmers and artisans, believing that these were the proper economic pursuits that promoted virtue and independence. Jackson opposed the dominant economic trends in the East. He was worried about the new manufacturing centers and the increase in corporations in America. Moreover, he was worried that the rise of corporation would lead to a shift in power and wealth away from workers and landowners into the hands of bankers and capitalists. Jackson went into a bitter war with Nicholas Biddle, the president of the Bank. Henry Claw saw that the Bank was an issue that might defeat Jackson in the 1832 election. Clay induced Biddle to apply for a new charter for the Bank early in 1832, though the charter was not due to expire until 1836. Hoping that the President would veto the charter bill, Clay predicted that the President would lose enough votes in the East to cost him an election. The re-charter bill went to the President’s table, and he returned the bill bearing his veto. Instead of sending a brief message, Jackson sent a long message designed to garner votes. Henry Clay and Nicholas Biddle thought that Jackson’s demagogic appeal would have the opposite effect from that he intended. However, Jackson proved that he understood what the people wanted, and he won the 1832 presidential elect by a large margin. Jackson was impatient and wanted to destroy the Bank at once. He was determined not to wait four years until the charter expired in 1836. Jackson decided to not deposit new funds in the Bank and to pay the nations bill with the funds already on deposit. These actions rapidly removed the government’s money from the bank. Jackson could not find a Secretary of Treasury who was willing to help him destroy the bank. Eventually, he appointed Roger B. Taney, who began depositing government funds into “pet banks” around the country. Jackson successfully destroyed “the monster”, but the destruction of the Bank did not achieve what he had hoped for. Not only did Jackson want to eliminate the Bank, he wanted to restore the old type of economy. He didn’t like the credit-drive, speculation driven practices and the infamous economy practices that associated with the banking-based economic system. The death of the Bank encouraged the proliferation of new state banks that engaged in practices Jackson opposed. Rather than making sound loans, the “pet banks” lent their funds wildly and without counting the consequences. They were more anxious to stimulate growth and less concerned with protecting the nation’s money supply. Reckless spending lent to an uncontrolled economic growth. The government debt was paid off, and the surplus money that piled up into the “pet banks” spurred more economic growth. The overflow of cash into the economy led to inflation and over-speculation, as seen in the outrageous rise in prices of public land. Jackson later introduced the “Specie Circular”, which forbade the treasury to receive anything but gold or silver in payment for public lands. At once, the land boom stopped. Congress vetoed to distribute to the states the surplus funds in the treasury. Jackson’s financial policy would lead to the Panic of 1837. The dramatic inflation in Jackson’s era raised the price of cotton and food dramatically. People also blamed Jackson’s Specie Circular. In response to the Specie Circular issued in 1836, the local banks immediately called in their loans. New York Banks later suspended the specie payment. Lacking sufficient hard money, banks failed, leading to depreciation in currency, skyrocketing unemployment and food prices still on the rise. Jackson continued to influence Van Buren, which eventually cost him the 1840 election.
Andrew Jackson became president because he was a “People’s President.” All of the westerners voted for him, therefore they were the people he was most concerned to look after. The bank of the United States was a well run bank thanks to Nicholas Biddle, the banks president. The bank did not give loans out to anyone that asked for them. They did not loan money to banks that couldn't pay them back. The western banks could not get loans from the National bank because they were not qualified to pay the bank back. The Westerners were mad about this and because they were mad Jackson was Mad as well. Jackson had to keep his people happy even though it wasn't the best thing for the country. Jackson hated the National back and all that it stood for. He even went as far to call it unconstitutional. The Whig party saw Jackson as a tyrant and wanted him out of office. When the 1832 election came along, they saw it as the perfect opportunity to take Jackson out of office. They wanted to make Jackson look stupid in front of the whole nation. With the help of ambitious Henry Clay and Nicholas Biddle, they applied for a new charter to keep the national back still running after 1836. They knew that Jackson would veto this because of his feelings toward the national bank. They believed that congress would override his veto and make him look stupid. However, that is not how it went. Jackson did veto the bill, but congress did not have enough votes to override the veto. The national bank no longer existed as of 1836. When Jackson was re-elected in 1832 his first order of business was to take down the national bank. He did this by emptying the bank of all its money. He then distributed the money in his 23 “Pet Banks. “ These banks started to give out loans to anyone and everyone who applied for one. This wild spending was followed by extreme economic growth. This is how Jackson’s policies played a role in the economic boom, they caused the whole boom to happen. Financial panic in 1837 was after Jackson was out of office, but his policies were still the reason for it. He issued his “Specie Circular” in 1836, which forbade the treasury to accept anything but gold and silver for the payment of public lands. As a result of this obscured law people stopped buying land from the government. At the same time America was having a financial crisis, so was England. England was were a lot of american imports came from and exports went to so they made us go further into depression. They were another loss of american support. The president at this time was Martin Van Buren, but he was not the reason for the economic crisis, Jackson and his policies were.
sources: Mr.G's slide show and notes from class; Us history book -Mackenzie Lancaster
Andrew Jackson was the seventh president of the United States, however he was very different from his predecessors. Jackson, or Old Hickory, was born and raised in Tennessee. This made him the first president to be born west of the Appalachians, and the first president to be from outside the original 13 states. Jackson was also different because he was not born an aristocrat unlike the previous presidents. This appealed to most of the citizens of the United States. He was a common man, and supported the hardworking lower class as opposed to the Eastern aristocrats. This bias would end up creating an economic boom, and later a financial panic in 1837.
Having one goal in mind, to eliminate the national bank, Jackson replaced Nicholas Biddle with Roger B Taney. Nicholas Biddle had been managing the national bank very sufficiently, but Jackson hated the bank. When Jackson made Taney the secretary of treasury, he did this knowing that Taney would take all of the money out of the national bank and deposit it into Jackson’s “pet banks.” By doing this Jackson would make the national bank irrelevant, therefore somewhat accomplishing his goal of eliminating it. Jackson’s “pet banks” were almost all west of the Appalachians. He supported them in hoping that they would give loans to the small farmers west of the Appalachians. This was in large part due to his personal bias as he was a commoner from Tennessee. By putting all the national money in these pet banks, Jefferson was putting more money in circulation, creating a large economic boom. These banks would lend out money very recklessly however, and often found that the people that they lent their money to could not pay their loans back.
In 1836, Jackson issued the Specie Circular, which required the national treasury to only accept in payments for governmental land gold or silver. This curbed the over-speculation in land, and halted the economic boom. With the bad loans that the banks had started to lend out, and nobody being able to pay them back, the banks started to fail. This caused the financial panic of 1837. Of course by this time, Jackson’s presidency was over, and it was the next president (Martin Van Buren’s) mess to clean up. Jackson’s economic policies created a national boom by putting more money into the economy. However, it also created a recession because the banks would lend out more money than they really had. When Jackson passed the Specie Circular, the panic of 1837 hit. Overall Jackson’s lack of economic knowledge created a large economic boom, which was inevitably followed by a financial panic due to over inflation.
-Chris Bower
Sources: Class notes based off of slides Book Dan Ives Jimmy McKee Reilly Kennedy William Pang
Andrew Jackson's financial policies played a crucial role in the economic boom and panic of 1837. President Jackson's hatred for the bank was indescribable. Because he didn't trust paper money and stockholders who were placing money in the wrong hands, he wanted to put an end the National Bank. On the other end of the spectrum, leader of the National Bank, Nicholas Biddle, made a plan with Henry Clay to turn the public against Jackson. There plan was to propose a bill to re-charter the national bank before the 1832 election. They believed that Jackson would veto the bill, considering his strong disliking for the bank. After, they hoped that Congress would then over-ride Jackson's veto; leaving the President looking foolish (essentially leading to the whigs to the executive branch). There plan ended up failing. The congress didn't receive enough votes to over-ride Jackson's veto. As Jackson's had hoped, the bank was dead. Jackson finished off the national bank by not placing any new funds in the bank and effectively paying the nations bills. Jackson stood for the public opinion. Meaning that the way the bank operated by making the rich even more rich, needed to be changed. Jackson established "pet bank" with the help of Roger B. Taney which took the governmental funds to loan to people who couldn't repay the bank. This caused an economic boom. The pet banks contributed to paying off of the national debt which allowed the country to experience economic growth. Soon enough, this economic growth came to an end with the pet banks failing and Jackson's poor decision to do something about his hatred for paper money. He placed the "Specie Circular" which disallowed the treasury to accept anything that wasn't gold and silver. This ended up as a mistake and left our 8th President, Martin Van Buren, to try to mend Jackson's mistakes. The financial panic of 1837 took place as a cause of Jackson's lack of economic knowledge, the eventual failing of the pet banks, eliminating the national bank, and input of the specie circular.
PJ Webb
Citations: -History Text Book -Mr. Gulotta's slideshow -Jimmy Mckee
The financial panic of 1837 was a crisis in the United States that lasted until the mid 1840s. Andrew Jackson was president during the panic. The people of the United States liked him, due to his military victory in the Battle of New Orleans during the war of 1812. Jackson rarely doubted himself, and viewed the opinions of others with contempt One of Jackson’s main adversaries, Nicholas Biddle, served as the President of the Second Bank of the United States, and was operating a very well organized bank. As Reilly Kennedy stated, “Nicholas Biddle’s sound Banking that avoided inflation, confusion, and depression.” Jackson and Nicholas Biddle did not agree on just about everything. Biddle supported eastern businessmen over western farmers. Jackson opposed this idea entirely. He fired Biddle and appointed Roger Taney as the new Secretary of Treasury. With the National Bank not existing anymore, Taney took out all of the money and put them in a “Pet Banks.” Taney’s “Pet Banks,” worked temporarily for the western market of the United States, but would eventually cause the Panic of 1837. The “Pet Banks” were not stable and increased inflation throughout the United States. Jackson’s ideas sparked the financial crisis, but he did improve the western economy of the United States.
Max Way
Sources: Reilly Kennedy Mr. Gulotta's knowledge Textbook
In 1837, the United States underwent an economic boom that ended up turning into a financial panic. Andrew Jackson was the President during this era; his financial policies, derived from his strong prejudices, were the main causes of this crisis called “The Panic of 1837”. Andrew Jackson hated paper money and strongly opposed the Bank of the United States since he thought the bank was making the rich richer and the poor poorer, creating unfair privileges for the powerful. It was when Henry Clay convinced Nicholas Biddle, the president of the National Bank, to apply for a new charter for the bank in 1832 that Jackson’s hatred towards the bank rose even higher. Claiming that the bank gave rise to its stockholders aristocratic privileges in a democratic society, Jackson was determined to get rid of the National Bank and its cheap, even worthless, paper money. He wrote a long message that expressed his understanding not for economics but for the common people, thus earning him a convincing victory in the election of 1832. He then stopped depositing new funds in the National Bunk and started spending the funds that were already in the Bank, which removed the government’s money from the Bank of the United States. Furthermore, Roger Tany agreed to become the new Secretary of Treasury and to help Jackson “kill the Bank”. Tany distributed the governmental funds to small banks, mostly in the west. These “pet banks”, possessing huge amounts of federal money, impulsively lent money to landowners and businessmen, which seemingly encouraged economic growth. However, once these “pet banks” saw how much money they could make from lending the government’s money, they started spending money that they didn’t even have and issued more money. The excess of currency, as a result, led to the loss in its value. In other words, the economic boom suddenly became a crisis when tremendous amounts of money were spent and distributed uncontrollably. Jackson, unsatisfied with the disappearance of the National bank, also wanted to replace the cheap and sometimes worthless paper money. In 1836, he issued the “Specie Circular”, which meant that the Treasury only accepted gold or silver for the payment of public lands. Paper money was in excess at the time and it took more and more bank notes to trade for gold or silver. The banks started to lose their money. Moreover, England, which traded gold and silver to the United States, was also suffering from a financial problem, which decreases the amount of gold and silver in circulation. As a result, the “pet banks” didn’t have enough hard money to pay the Treasury; they went broke. Debts were left unpaid; people didn’t get their money; businesses failed to carry on. The country went into the financial panic of 1837. Son Nguyen Sources: Textbook and Mr. Gulotta’s notes
Andrew Jackson’s financial policies and actions were the causes of the economic boom and the Depression of 1837. Jackson wanted people to expand westward. However, people who were moving west did not have the money, or credit, to receive loans from eastern banks. So, Jackson took all of the money from the National Bank and deposited it into 23 “Pet Banks”, which would then loan out money to these people wishing to buy land in the west. Yet, Jackson did not think this through. Why would the banks in the west loan out money if they knew that they wouldn’t get paid fully back, like the banks in the east had realized? Although the “Pet Banks”, all located west of the Appalachian Mountains, caused a land and economic boom, it was only short-lasting. Once Jackson passed the “Species Circular”, which stated that all new land bought must be paid for with gold or silver, paper money became almost worthless. As people rushed to trade in their now worthless paper money, they realized that the banks didn’t have enough gold to provide to all of their clients who wanted to buy land. This caused the “Pet Banks” to not get fully paid back, and therefore lost the money of the National Bank. Finally, to make matters worse, all of the surplus money from the “Pet Banks” had already been distributed to the states, and therefore lost to the National Government. Jackson’s financial policies were not thought through before being passed, and despite causing a short economic boom, caused a long-term depression.
President Andrew Jackson did not like the national bank. He thought that it was unjust, since it was making rich people richer. Most wealthy people lived in the East, but he wanted to help the people in the West, since they were hard-working, he was from the West and he got most of his support from there. When a bill to re-charter the national bank was passed in 1832, although the original charter didn’t expire until 1836, Jackson vetoed it. He furthermore wanted to get rid of the national bank before 1836. However his views of the national bank did not affect his image to the citizens, so he was reelected in 1832. Now since the elections were over, he wanted to take all of the money out of the national bank, in order to ‘kill’ the national bank. He fired Nicholas Biddle—who was an excellent secretary of treasury, since he avoided inflation and depression—and employed Roger B. Taney as his secretary of treasury. Now, government bills were to be paid by the national bank, but any new funds were now going to be deposited in so called ‘pet banks.’ Resulting from that policy, the national money was now in 23 different banks, which were all very small and on the west side of the Appalachian Mountains. This decision led to the short-lasting economic boom. Banks were now loaning western farmers a lot of money, and they were spending this money on more land in the west. The economic boom was a product of this policy, since more money was in circulation. But some banks loaned out more money than they had, so inflation resulted. The amount of paper money was exceeding the amount of silver and gold in the US, so Jackson had to react. He issued the ‘Specie Circular’, which was a law stating that only silver and gold were accepted payments for public lands. He passed this law, because he wanted to increase the governments gold, to decrease the inflation. But now the banks that had been lending too much money were going bankrupt, and couldn’t loan any silver or gold. Hence, farmers could not buy more land and the economy was falling. This led to the financial panic in 1837. Jackson’s lack of economical knowledge, and his decisions to fire one of the best secretary’s of treasury, Nicholas Biddle; to transfer the money from the national bank to ‘pet banks’; and to pass the ‘Specie Circular’ all resulted in the financial panic of 1837.
Credits: Dan Ives Mr. Gulotta’s Advanced US History class A History of the United States
Jackson’s financial policies led to the decline in the economic boom and eventually the financial panic of 1837. President Andrew Jackson was strongly opposed to the National Bank in place because it did not serve to balance the wealth distribution between the classes. Wanting the farmers to be able to have the same opportunities to take loans without collateral and claims the bank unconstitutional. When there were not enough votes to override the president’s veto to Bill to renew the bank, the bank is no more. Treasury of State, Roger B. Taney removed all the money from the national bank and transferred it to Jackson’s “Pet Banks” which consisted of smaller scale banks spread throughout different states. Due to bad credit, these small local banks could not meet the needs of their market. Over-speculation led to excessive and unstable investments in land, goods, and stocks. Against the paper money, Jackson’s use of gold money, caused America problems of having to drain the United State’s gold supply by banks having to pay loans in gold, which led to the banks going out of business and moorages foreclosed. Today, it is quite ironic how Andrew Jackson stands on the present-day American twenty-dollar bill as he did not believe at all in paper currency and was strongly against the national bank. His face is paired today to something he didn’t believe just like how he stood for “Democratic Reform” which went against the backbone of our democratic-federal government’s economic ideals.
Alyssa Cass
Sources: http://www.history.com/topics/andrew-jackson Mr. Gulotta’s class presentation
President Jackson strongly opposed the National Bank. The banks made the rich, bankers on the East Coast, richer, and the poor, farmers in the West, poorer. With Jackson coming from the West, he took offense to this. Nicholas Biddle, president of the bank at the time, ran the national bank very efficiently, only giving loans to those who had collateral so that the bank would not lose money. Nicholas Biddle also made the prime rate very high so that loans were given to people very carefully by banks. Biddle’s way of banking avoided inflation, confusion, and depression. Biddle’s brilliance made President Jackson seem as though he knew what he was doing, but a few ill-advised financial decisions would say otherwise. The Whig party strongly opposed President Jackson and wanted him out of office. The party set up a plan that would make him look foolish as well as aid the country. Their plan was to pass a bill to renew the national banks charter, then have President Jackson veto said bill. Once President Jackson vetoed the, congress would over-ride the bill. All of this was supposed to make Jackson look foolish and the Whigs would gain control of the White House. Unfortunately, after the veto, congress did not get enough votes to over-ride the bill and the National Bank died. President Jackson then went onto win the election. He appoints Roger B. Taney to be the new Secretary of Treasury. Taney takes all the money from the National Bank and deposits it into Jackson’s 23 “pet banks.” From there it was all downhill. The ‘Specie Circular’ stated that land had to be purchase with gold or silver, something the US did not have enough of. Jackson, who opposed paper money, supported the use of gold and silver, which today is ironic because he is on the twenty dollar bill.
Andrew Jackson’s policies and hatred towards the national bank played a major role in the economic boom as well as the financial panic of 1837. Jackson was a strong opponent of the national bank, he felt it was unconstitutional and favored rich Easterners over other citizens of the nation. Having come from the West, where most of his voter pool lay, Jackson wasn’t keen on the idea of having his fellow frontiersmen rejected on loan applications while rich Easterners received the necessary loans. However, a lot of the issues regarding the banks and money started as a political stunt stemming from the Whig Party making a push for office. Nicholas Biddle and Henry Clay, knowing Jackson’s hatred for the bank, made an attempt to renew the banks’ charter in 1832. They expected Jackson to veto the charter, but they also expected that congress would overturn the veto, making Jackson look foolish in the process. When they proposed the charter, Jackson vetoed it as expected, however Congress didn’t approve of overturning the veto, which would eventually lead to the death of the national bank. With the veto against the national bank, and Jackson’s re-election his policies really began to negatively affect the future of the American economy. Jackson, determined to finish off the national bank once and for all and not wanting to wait until the end of its charter in 1836, decided to drain the money from the banks and placed them in “pet banks” around the country. These “pet banks,” leant wildly, while the national bank had been more conservative. The massive loans being dished out lead to massive land sales and economic growth. The government was able to pay off its debt with money left to spare in the “pet banks,” and Jackson the loyal frontiersmen was giving out loans to whoever had plans to go West or who was already out West. The sale of public land went from two million dollars to twenty four million dollars, however this overgrowth of US spending was not Jackson’s only fault. Jackson was also against paper money, and this lead him to issue his Specie Circular, which made paper money useless, and only gold and silver could be used to pay for public lands. This crushed the land boom and later that year, Congress voted to distribute the species funds to the states from the Treasury. The loss of paper money really created the financial panic of 1837 because banks began to restrict loans and stop giving away gold and silver for their notes. With the British banks refusing to assist the United States with a shortage of gold and silver due to their own economic struggles, and with a bad year of crops for farmers the financial panic of 1837 emerged. Therefore, it can be concluded that both the economic boom as well as the financial panic of 1837 were both caused by the impulsive and emotionally driven policies of President Andrew Jackson.
Vaughan Kavanaugh
Sources: Mr. Gulotta's classroom discussions "A History of the United States"
The decisions conveyed by President Andrew Jackson led to the economic boom and later the panic of 1837. Born in poverty, Andrew Jackson had become a wealthy Tennessee lawyer and rising politician by 1812. In 1829, Jackson was voted the seventh president of the United States; however, his policies differed than previous leaders. He was the first president that did not originate from one of the 13 states, and was raised west of the Appalachian Mountains; therefore, he was concerned with the prosperity of his western supporters. Since Jackson grew up in humble circumstances, he believed in the common man; thus, he gained the encouragement of the hard-working lower class. This idea of the common man was countered by the corrupt formation of an aristocracy within the National Bank. Jackson wanted the small farmers of the west to get loans even without collateral; however, the national bank, with its President, Nicholas Biddle, would not grant loans to anyone that asked, especially western banks that could not pay the loans back; thus, Jackson despised what the National Bank stood for and wanted to get rid of it. This created a tension between Biddle and Jackson, which caused Nicholas Biddle to apply for a new charter for the National Bank in 1832. Biddle knew Jackson would veto the bill, which would go against congress, and result in a loss of supporters. It was intended by Biddle that congress would overrule the bill, and the Bank would still exist; however this was not the case and congress did not veto the bill. Jackson then had the power to use the money from the National Bank in ways he pleased, such as paying off the national bill and having his newly elected secretary of treasury, Roger B Taney, place funds into “pet banks”, most west of the Appalachians; therefore, his hopes of give loans to the small farmers west of the Appalachians, and eliminating the national bank were in progress. With all the national money in these pet banks, the circulation of money was rapid, generating an economic boom; however people that they lent their money to could not pay their loans back. The only thing that Jackson hated more than the National Bank was paper money. In 1836, Jackson input "Specie Circular," "which forbade the Treasury to receive anything but gold or silver in payment for public lands." This caused the economic boom to come to a quick close. The banks replied to this by calling in their loans and because there was not enough hard money circulating, the banks failed which resulted in the Panic of 1837. It was Jackson’s lack of financial knowledge that led to the fallouts of these banks.
Molly Crabtree
sources: Class power points text book Chris Bower Jimmy McKee Mackenzie Lancaster
Andrew Jackson became the 7th president of the United States after the 1828 election. His fame originated from winning the battle of New Orleans, The United States’ only win in the War of 1812. After this, he was considered a hero and his fame would take him through many ups and downs during his presidency. Jackson easily took the election of 1828, but even though he was able to become the president of the United States, which is no easy feat, he made some very poor and ill-advised presidential decisions. First, his belief in the national bank was non-existent; actually, he was strongly against the idea of the whole banking system. This is why he fought with Nicholas Biddle, the president of the bank of the United States. Biddle was doing a striking job when it came to both keeping the US out of financial troubles and even leading it into a more wealthy state. President Jackson however disagreed with him. Biddle’s financial system favored eastern businessmen while Jackson wanted to help out western farmers. Since Jackson strongly disliked the national bank, he decided to get rid of his pesky problem. From there, he decided to move the nations wealth from the national bank into “pet banks” to the west. People could then on go to the banks and receive loans without collateral. The banks would give out loans but without collateral, but no one paid the bank back. This whole situation led to two separate things. On one side, the there was mass economic growth during this time, but on the other side, with all this money in circulation, inflation quickly set it. This financial policy was what led to the economic panic of 1837. Jackson was the 7th president of the United States, following some of the greatest presidents of all time like Washington and Jefferson. Although these were tough acts to follow, Jackson could have made some better decisions when it came to the economy of the US. On one hand, his policy led to a huge economic boom in the west, but on the other hand, it also led to the financial panic of 1837.
Martin Van Buren won the 1936 against Daniel Webster largely because he was backed by President Andrew Jackson. Shortly after his election, the Unite States fell into a depression which dominates Van Buren’s presidency. However, the fault of the depression lies not with Van Buren but the beloved president before him, Jackson. It was Jackson’s ignorant economic policies that gave the economy its instability and eventually led the its collapse. From the beginning Jackson favored the states west of the Appalachian Mountains, mainly because they were the ones who elected him, and many of the policies he instated reflected this. Jackson didn’t care much about who worked under him. One such person was Nicolas Biddle, who was the president of the national bank. Biddle, at the time, was using new, sound banking techniques to avoid Inflation, depression, and confusion in the general populace, and was generally doing a very good job running the country’s economics. But Jackson wasn’t concerned with the good banking policies, he was concerned that Biddle was limiting national loans given to western banks, as these banks were less reliable then the eastern ones. Jackson gets rid of Biddle because of this, and proceeds to give loans to the smaller banks in the west. These banks would start what mainly caused the depression, which was loaning without collateral. In the west, the small farmers still wanted loans but did not have sufficient credit. The banks, once they had the money under Jackson’s policy, gave them loans nonetheless. The second thing Jackson did to instigate the depression was completely destroy the national bank. He ignored the Supreme Court’s ruling, which he had done before, and moved all the money from the national banks into “pet” banks. These banks are called such because they are the banks, in the west, which Jackson favored. These banks proceeded to keep handing out loans and eventually the economy could not take the debt accumulated. In 1836, the Deposit and Distribution Act had all the surplus money placed into these banks as well, which essentially served to drain the economy further. Although the policies, as described above, eventually failed, in the short term they worked very well. The monetary stimulation boosted infrastructure and economic development, and thus painted Jackson in a good light. Luckily for Jackson, the policies didn’t completely fail until the next president was in office, meaning he didn’t have to take as much of the blame.
Even though Andrew Jackson was not the president of the United States anymore, his financial policies played a drastic role in the economic boom and financial crisis of 1837. The start of such policies began back in 1832 when Mr. Jackson was re-elected president. Better known as the “People’s President”, Jackson’s supporters were mainly found in in the West of the United States. While being president, Jackson’s standpoint on the Second National Bank was of disapproval he thought it was unconstitutional. For him, the monetary aristocracy – the National Bank preferred to lend loans to the East than to the West – was something unacceptable. Therefore, westerners did not like the national bank. While the people in the west were the greatest support and the reason why Jackson became president, he decided to do something against this situation. In 1832, the Whig party, Nicolas Biddle and Henry Clay believed that Andrew Jackson was a tyrant. Not only he did not respect the constitution, but also he made clear that the most powerful branch was the executive one. Due to Jackson’s behavior, Nicolas Biddle passed a charter that will keep the national bank up and running. Clay, Biddle and the Whig party believed that Jackson would veto the charter. Then, Congress would override his veto making him look foolish. However, such thing did not happen. The Congress did not get enough votes to override the veto, and the National bank was now in the hand of the president. After this event, Jackson decided to take out all the money of the National bank and place it in his “Pet banks”. The Pet banks are 23 small and unreliable banks spread all over the States, but mainly found in the west territory. In the beginning, these banks would lend the money wisely, but eventually excessive circulation of money brought inflation in the US economy. Since “paper money was not backed up by gold and silver, the prices were soaring” (Christine Qi). The placement of the money in these Pet banks showed a fantastic increase in the economy of the USA. However, by lending money to people that could not pay back to the Pet banks a financial crisis occurred. To deal with the crisis, a species circular was established. Banks would have to pay the government back in gold and silver. Due to this law, the banks stopped giving an excessive amount of loans and most of them shut down. Because of the rapid decrease in the banks, the United States went into an economic depression in 1837. - clementina sources: -Mr.Gulotta's notes -Christine Qi's Comment -Mackenzie Lancasters comment
Both the economic boom and the financial panic of 1837 were directly influenced by President Jackson’s financial policies. Andrew Jackson was a new type of president. He did not come from the traditional wealthy Virginian family, and was the first president from West of the Appalachian Mountains. Everything that Jackson was at the time of his presidency he had worked hard to obtain. He was a fighter, and a courageous one at that. He was a fierce man, who always believed himself to be right. All of these qualities shaped him into a man who greatly distrusted the powerful National Bank. From the beginning of his Presidency, one is able to tell that Jackson is a man for the people. This can most likely be traced back to his humble beginnings. Jackson puts more power in the hands of the people by way of creating paper ballots, a two party system, and presidential conventions that were open to anyone who wished to attend. Jackson also disposed of the requirement that one must own land in order to vote, and created more positions in office. Jackson, with a set of morals molded by his beginnings, deemed the National Bank to be unconstitutional, as it favored the wealthy easterner over the humble, hardworking common man. Money influenced the banks, so those who didn’t come from it found the process of acquiring loans very tedious, if not impossible. In 1832, the Whig Party, long time opposers of Jackson, made a push for office. Their party, led by Nicholas Biddle and Henry Clay, thought that they could gain political favoritism over the people by requesting a recharter for the National Bank. The Whigs knew that Jackson would veto the recharter, which he ended up doing. However, the Whigs believed that congress would overturn Jackson’s veto, making Jackson look like a fool. This situation did not occur, and the congress went along with Jackson’s veto. Without a recharter, the National Bank would cease to exist, which would directly cause the financial panic of 1837. While the Banks existence would continue until the end of its charter in 1836, Jackson, wanting its death to come as soon as possible, had his treasurer Roger B. Taney drain all of the money from the National Bank and put them in twenty three small “Pet Banks” that favored Jacksons supporters and the everyday man. The handouts of loans from these banks were much more lenient than those of the National Bank. Thus, more loans were given out, and more land was being bought. This caused a temporary economic boom in the States. Jackson then issued his specie circular, which required that land be paid for in either gold or silver, making paper money useless. The U.S. however did not have enough gold and silver to back the paper money. Therefore, the loans which had been used to purchase the land could not be backed, and the land was not purchased. The results of this caused the financial panic of 1837. With this information, it becomes evident that President Jackson and his financial policies were indeed the primary causes of both the short-lived economic boom, and its subsequent financial panic of 1837.
- Evan Liddy
Sources: Class Slides “A History of the United States” Classroom Discussions
What role did Jackson's financial policies play in the economic boom and financial panic of 1837?"
ReplyDeletePresident Andrew Jackson' financial policies played an essential part in the economic boom and financial panic of 1837. Andrew Jackson did not approve of the idea of a National Bank because he thought it was unconstitutional so when the Bank needed to renew their charter President Jackson refused. Jackson's refusal to renew the charter with the National Bank caused the retraction of funds that were abetting the Bank. The funds were instead given to state banks and private banks because they spent the money less conservatively and also posed less of a threat to Jackson's policies. This lead to bank failures whenever there was economic trouble. When President Andrew Jackson "killed" the National Bank, it prevented the ability to moderate the economic booms and busts that a country naturally goes through.
Sources:
http://www.wisegeek.com/what-is-the-panic-of-1837.htm
Class notes
Class Discussions
~ Katie Soper
As a self-made man from west of the Appalachian Mountain, President Andrew Jackson distrusted and hated the Second National Bank and paper money. His financial policies, aimed to kill the National Bank, to control paper money and to enrich poor people from the west, were major causes of both the economic boom and financial crisis in 1837.
ReplyDeleteIn 1832, Nicholas Biddle, the president of the National Bank, applied for a new charter for the Bank. Not only did President Jackson veto the recharter bill, but he officially announced his war against the Bank as well. According to him, the Bank and its stockholders were creating monetary aristocracy. Most people supported the President’s claim. Though the charter of the Bank ran till 1836, Jackson planned to eliminate the national Bank before the charter ended.
Jackson decided to drain money from the National Bank to pay the national bill and to stop depositing new funds in the National Bank. To regulate the economy, he set up “pet banks” around the country. The Deposit and Distribution Act of 1836 stipulated that the surplus funds in the Treasury should be distributed to the states, that is, the “pet banks”. By 1833, there were already 23 pet banks, most of which were in the western territory. In this way, Jackson removed the governmental money from the national Bank to many unstable small banks.
At first, these policies worked well. Spurred by the distributed wealth, the small banks lent money wildly. As the economy grew rapidly, so did many infrastructure programs and land-selling in the west. From 1830 to 1836, sales of land rose from $2 million to $24 million.
However, the over-speculation of the pet banks foreshadowed the ensuing financial crisis. Lacking proper regulation and restriction, these pet banks lent great amount of money without careful consideration. Paper money was not backed up by gold and silver, and the prices were soaring.
To deal with the inflation and excessive land speculation, Jackson issued the Specie Circular, which stated that public land trade with the Treasury could only be done in gold or silver. Because there was not enough gold and silver in circulation, the land boom quickly stopped. But soon, small banks began to feel pressure to pay hard currency, and they suspended hard currency payment to everyone. Many pet banks went broke because they did not have enough money to support themselves. Since no National Bank could regulate economy and solve the problems now, the financial crisis of 1837 came.
Jackson’s ill-advised financial policies caused a false economic boom which, when retracted, created a financial panic. Jackson wanted small western farmers who had bad credit to get loans. Jackson accomplished this by crediting economic boom was caused by “pet banks”, the 23 of local banks west of the Appalachian mountains, who Jackson gave money to that recklessly gave out loans to individuals who could not afford to pay them back. This was a short-term benefit but in the long-term detrimental: people with these loans spent their money into the economy, which put more money into circulation, but this falsely floated the economy. The money that was being leant was not backed up in gold and silver, because of the vast amount of loans being given out, which set up the economy for disaster. Next, Jackson executed the “Specie Circular” which declared that public lands had to be bought with gold or silver currency, which put an end to the land boom. This caused a rush of individuals wanting to trade their paper money for gold, which the banks did not have. The influx of paper money in circulation not backed up by gold forced a rush on the banks. Individuals rushed to turn in their paper money for gold, which was not there. Jackson—known as “the people’s President”— hurt all of his beloved supporters individually through his reckless financial policies.
ReplyDeleteColin Fuss
President Andrew Jackson’s financial policies did indeed play a vital role in the economic boom and financial panic of 1837. Jackson introduced democratic principles that appealed to the people such as a two party system, conventions instead of caucus’, paper ballots, end of land requirement for voting, and the elections of many more office holders. All of which still stand in today’s American society in terms of politics. These ideas were innovative and turned over a new leaf in US government. But, Jackson didn’t make the smartest of decisions. During the War of 1812, the National Bank dies. Soon after the people knew it was needed. In 1836, the charter for the second National Bank was going to expire. Jackson vetoes the bill to re-charter the National Bank and the bank dies again. Newly appointed Sec. of State Roger B. Taney than takes all the money out of the National Bank and put it into the local smaller “Pet Banks”, and most of them having been in the west where Jackson is from. Since these smaller banks were able to give out more loans to people who probably couldn’t pay them back, it created inflation. There was a surplus of money in the US. Andrew Jackson did good things as a president, but his bad decisions carried on to dominate Van Buren’s presidency and eventually lead to the Depression of 1837.
ReplyDeleteJustin Donawa
Andrew Jackson’s resume, at first glance, is much less impressing then previous presidents, so maybe that was a forewarning that he wasn’t exactly well equipped to be our seventh president. The economic boom and the financial panic of 1837 would be the result of our inexperienced seventh president.
ReplyDeleteBefore elected into office, Andrew Jackson heard word from the peoples of the west. The banks in the west demanded that they be given more money so that the poor and hardworking citizens could receive loans more easily and get them up and running. The banks pleaded that the national bank be less conservative so that the citizens in the west could have a better chance at achieving their financial goals. Jackson saw this cry for help as a perfect opportunity to win some votes on election day.
With the win of presidency, Mr. Jackson, would not hesitate to spread the wealth of the national bank with the rest of the nation. In order to do this he would need to fire the greatest president of the treasure, Nicholas Biddle. His ways with the national money avoided inflation, confusion, and depression. Had Nicholas Biddle remained as president of the treasury during the time of Jackson, it might be safe to say that the panic would have never happened. However, when Jackson came into power, he replaced Biddle with a much more westernized and generous man, Roger B. Taney, who would do exactly what the people to the west wanted.
Before Jackson could take the step he needed to diminish the national bank he would have to pass his ideas through the Supreme Court. When the case was brought up in the court they ruled his decision to be unsatisfying and rejected his request. Because Jackson believed that the executive branch was the most powerful branch of the government and because of his stubborn attitude, he completely ignored the court’s ruling and went through with his plan.
The National banks money would be distributed to many banks in the west. Loans would be now easier to receive for the civilians and collateral would not be an issue. This might have seemed like a generous thing for the president to do, however now that more money was in circulation then there actually was, inflation became an issue. When the panic occurred, the government required all banks to pay up, and they could only pay with gold or silver. Due to the fact that most of these banks had given out more money than they had, many of them went bankrupt. The whole country and the rest of the world’s economy might have crashed if it were not for some very large conservative banks in the east that helped the national bank to get back on its feet.
Jackson would be the first president from the west of the Appalachian Mountains, and he would be the first president not from the original thirteen colonies. This would prove to be a weakness of his, for the outcome of his presidency was deliberating. His lack of economic knowledge and his involvement in areas which did not need him would lead to the panic of 1837. Quite frankly if he had left our treasury alone and had just sat in a chair all day, he would have done better for the country then what he decided to do.
Credits :
Notes From Class
Mr. Gulotta.
Katie Soper
By,
Dan Ives
President Jackson was a person who strongly hated the Bank of the United States. He believed that it was a symbol of special privileges, and he distrusted paper money, preferring to rely on gold and silver. Jackson wanted to get rid of the Bank, and in order to do so, he deposited no new funds there, and instead paid the bills of the country using the funds that were already on deposit. He hired Attorney General, Roger B. Taney, who deposited funds of the government in local banks around the country. Those banks started lending their funds so uncontrollably, that it caused the economic boom. The more money they issued, the more speculators were using it to buy lands. Jackson, with his hatred for printed money, issued “Specie Circular”, which said that only gold and silver could be used to pay for public lands. The economic growth stopped at once. Congress then decided to give the states the surplus funds that were in the Treasury. The banks began to restrict their loans and stopped using gold and silver instead of bank notes. This, along with the coincidental crisis in Britain and the bad year of crops for farmers brought the financial panic to the country in 1837. Jackson’s unreasonable and ruthless behavior led the United States into the financial crisis.
ReplyDeleteSources:
A History of the United States by Daniel J. Boorstin, Brooks Mather Kelley
Anna Kravtsova
Jackson’s poor financial policies lead to the economic boom and then the financial crisis of 1837. Jackson disliked the National Bank, because it would only give loans if the person requesting one truly deserved one, and was eager to destroy it. The National Bank would establish a strong line of credit and collateral before loaning to anyone. The western settlers who were strong supporters of Jackson did not have any collateral or a strong line of credit making it very hard for them to receive a loan. Jackson believed that the National Bank was favoring the established easterners. Jackson took all of the money in the National Bank, which conservatively handed out loans, and put it into twenty-three smaller pet banks around the country. These pet banks gave out loans much more than the National Bank had, not establishing a line of credit or collateral before handing a loan out. The over speculation by the pet banks lead to the financial crisis. When people could not pay the loans the banks needed more money and the treasury printed more disrupting the balance between citizens and currency. To deal with inflation Jackson made Specie Circular, which made it so you could only buy land with gold and silver. This caused a rush to buy up gold and silver. The banks did not have gold to back up the inflation of paper money making it worthless, which hurt the entire country in a major economic depression.
ReplyDelete-- Will MacClarence
ReplyDeleteAndrew Jackson’s presidency will always have a dark shadow shrouding it because of the way he handled his politics. Jackson ruined his presidency because of his actions will financial policy. When Jackson was elected president, his votes mostly came from states west of the Appalachian Mountains, where Jackson is from. These states do not have that much money, and couldn’t get loans from the national bank. During Jackson’s second term, he fired the President of National Bank, Nicholas Biddle. Biddle’s ways of banking kept the United States in good financial standing but he wouldn’t let Jackson move all the money to many different banks, so Jackson found someone who would. Roger B. Taney was appointed Jackson’s Secretary of Treasury and did what Jackson asked. Taney removed all the money from the national bank and spread it around 23 “Pet Banks” west of the Appalachian Mountains. Jackson then made it easier for farmers in the west to get loans without collateral. This started the downfall for the banks because they had to lend to borrowers who couldn’t pay the money back. These actions by Jackson led to the downfall of the U.S economy and the start of the financial panic of 1837.
ReplyDeleteCredit:
Notes from Mr. Gulotta's F period Class
Brooks Kiley
Many of Jacksons decisions and ideas led to the economic boom and later the panic of 1837. Jackson hated the bank. He believed that it was unconstitutional and did not trust the paper money of the United States. Jackson also believed that the stockholders of the bank were becoming corrupt and forming somewhat of an aristocracy. When Henry Clay teamed up with Nicholas Biddle, the head of the national bank, they though that they would be able to make the people turn against Jackson and make him look foolish. Nicholas Biddle decided to apply for a new charter for the Bank in 1832, four years before the old charter was up, so that the anti-bank Jackson would veto the bill and go against congress and loose supporters. Clay, Biddle and the whig party then thought that when Jackson would veto the bill then congress would over-ride the bill and the bank would be saved, but Jackson would look foolish. However, when the bill got to Jackson he chose to veto the bill and send it back through congress, but congress did not over-ride the bill and the national bank was gone. Clay and Biddle's plan had failed and backfired, the people supported Jackson and his decision to veto. The bank was making the rich richer and Jackson wanted to stop this, "He proved that he did understand what the people wanted." Jackson had stopped the bank in its tracks and he openly announced that he was prepared to destroy the bank before its charter ended in 1836. Jackson chose to deposit no new funds into the bank and to use the money already in the bank to pay the nations bills. This rapidly destroyed the bank and took the nations money out of its hands. Jackson then turned to Roger B. Taney to put the government funds into new "pet banks" that were to be established west of the Appalachian mountains.
ReplyDeleteWith Nicholas Biddle out of a job and the "pet banks" in place, the economic boom was about to occur. Jackson's appointed assistant Taney, proceeded to deposit government funds into these new banks. These new banks then began lending out money carelessly and loaned money to people who would not be able to pay the bank back and caused an economic boom. At this point debt of the government was paid off and land sales skyrocketed. The sales rose from $2 million to $24 million in 6 years. These new "pet banks continued to loan money and contribute to this huge economic boom.
Jackson's hate towards paper money would eventually lead to the end of the economic boom and would lead to a stoppage in economic growth. Jackson decided to input "Specie Circular," "which forbade the Treasury to receive anything but gold or silver in payment for public lands." These costly mistakes would lead to a big problem in the United States economy. Unfortunately, Martin Van Buren was in office when the panic of 1837 hit and had to deal with Jackson's mistakes. The Banks then began to restrict their loans and it became more an more difficult for people to get money from the bank. By 1837 there was an economic panic and in 1839 there was an intense depression all because of Jacksons careless financial policies. And at this point in time there was no National Bank to save the country from this economic hardship.
SOURCES:
Textbook
Notes from class
Christine Qi
Mr. Gulotta
-Jimmy McKee
President Andrew Jackson played an impactful role in the economic boom and financial panic of 1837. Jackson, the first president to come from a state other than the original thirteen, wanted to expand and explore the west. In order to help push people into the west, Jackson got Nicholas Biddle, the Secretary of the Treasury, to give money to the 23 banks that resided west of the Appalachian Mountains. These “Pet Banks” were capable of giving money to these frontiersmen who had bad credit unlike banks in the east who would not loan money. Because these banks were giving out money, an economic boom was created and more and more people began move to the west. Unfortunately, after these frontiersmen had settled in the west, many of them could not pay back their loans. Therefore, the National Bank had no money and was killed after it was not renewed. Overall, Jackson’s careless economic policies and hatred towards the national bank led to the economic boom and financial panic of 1837.
ReplyDeleteCredit:
Notes from Mr. Gulotta's F period Class, Colin Fuss, Brooks Kiley
John Leasure
President Andrew Jackson, who grew up in the Western United States, did not trust the National Bank or paper money. Jackson was the victorious commander at the Battle of New Orleans during the War of 1812, which gained him his fame. In 1828 Andrew Jackson, also known as “Old Hickory”, became president of the United States. Jackson believed that the he held all power and must surround himself with people who support his ideas only. Despite Nicholas Biddle’s sound Banking that avoided inflation, confusion, and depression, because Biddle’s system favored Eastern Business Men over Western farmers, Jackson did not support Biddle’s ideas. Jackson wanted the small farmers of the west to get loans from the bank without any collateral and claimed that the bank is unconstitutional. As the Whig Party failed in hope to win the next election, Jackson ensures that the National Bank is dead. Jackson appoints Roger Taney as his new Secretary of Treasury and removes all money from the National Bank, putting it into his 23 “Pet Banks”. Putting all of the money in these banks and eliminating the national bank leads to the Depression of 1837. These banks, mostly located in the West were not dependable banks but Jackson wished to build up the Western economy. The banks did work for some period of time, they lent out money to whoever needed a loan and people were becoming wealthier. However, this economic boom did not last, the “Pet Banks” were not stable and gave loans they could not back, creating inflation. In other words, the over-speculation put the country in a tough position and the surplus money of the National Government is returned to the states. Jackson’s lack of knowledge and careless economic decisions led to the Financial Panic of 1837 under the new president, Martin Van Buren. Yet we must not forget his policies did play a role in the economic boom by growing the United States economy in the West.
ReplyDeleteSources:
Christine Qi
Slides
Reilly Kennedy
President Andrew Jackson made his opinions about the second Bank of the United States public. He believed the primary goal of the bank was only to help the rich who lived in the east gain more. Jackson wanted his supporters, those who were small farmers in the west to receive the same benefits as the rich in the east. The President claimed the National Bank was unconstitutional and ignored the Supreme Court’s decision in McCulloch v. Maryland. Unfortunately, Jackson’s opinions about the bank caused him to make some changes in his financial policy that ultimately spurred the Panic of 1837. Early in 1832, Nicholas Biddle, the president of the National Bank applied for new charter. Jackson immediately vetoed the proposed bill. His primary motive was to kill the Bank in order to please his voters. Therefore, Jackson decided to make a rash decision. He would deposit no new funds in the Bank and pay the nation’s debt with funds already deposited. Jackson had some trouble finding a Secretary of Treasure who would carry out his actions, in fact Biddle was fired because of this issue. Jackson did however; find the perfect man for the job, Attorney General, Roger B. Taney. Taney deposited government funds in various “pet banks” throughout the United States, mainly the west. Jackson’s pet banks, lent funds out carelessly and recklessly, ignoring any future consequences. Short term, there was economic growth, but long term these effects were disastrous. In 1836, Jackson issued the “Specie Circular” which only permitted public lands to be paid for with gold or silver. The short economic boom was suddenly halted. Around the same time, Congress also voted to distribute to the states the excess funds in the Treasury. The United States was about to face the consequences of Jackson’s rash decision-making and financial policies. The banks responded by tightening their loans and putting a stop to redeeming bank notes in gold or silver. It didn’t help that while all of this was going on in the United States, Britain was suffering a financial crisis, Britain playing a key role in the short-term boom. All of these factors spurred the financial panic of 1837, Jackson’s rapid financial policies being the main factor.
ReplyDeleteAly Hall
Sources: the textbook and notes from class
Jackson’s financial policies played a direct role in the economic boom and financial panic of 1837. President Jackson strongly distrusted the National Bank and felt it was unconstitutional. In 1832, Henry Clay persuaded Nicholas Biddle, president of the National Bank, to apply to renew its charter early in order to make Jackson look like a fool. The plan was to have Jackson veto the bill and then have Congress override the veto. After Jackson vetoed the bill there were not enough votes in Congress to override the veto, and Jackson killed the National Bank. When Jackson killed the bank he decided not to wait four more years until the charter expired. First, he chose not to deposit any new funds and to pay all the national bills with what was already in the bank. Next, he gave large government deposits to “pet banks”, most of whom were located west of the Appalachian Mountains. These pet banks loaned money wildly to people who had bad credit and would not be able to repay the loans. At the beginning this was the economic boom. During this time land purchases grew immensely, from less than $2 million in 1830 to $24 million in 1836. In addition, Jackson also had a deep distrust of paper currency, which in addition to the high inflation of paper currency; led to him executing the “Specie Circular”. The “Specie Circular” stated that public lands could only be bought using gold or silver. Due to the fact there was not enough gold and silver circulating and that many of the local “pet banks” failed caused the financial panic of 1837 during his successor, Martin Van Buren’s presidency.
ReplyDeleteMorgan Handwerker
Sources:
Notes from Class
Mr.Gulotta
A History of the United States textbook
As Martin Van Buren gained presidency of the United States, the country was rapidly falling into a financial panic. During Andrew Jackson’s presidency new economic laws and policies in the United States were created, this led to a brief economic boom for individuals, while the American economy as a whole was badly structured and was falling apart. Jackson’s lack of economic knowledge caused a financial crisis in the United States in 1837.
ReplyDeleteNicholas Biddle, the president of the Bank of the United States, ran a sound banking system that avoided economic inflation, confusion, and depression (slide #18); his sound banking gave no opportunity for people with low economic stability. Jackson, known as the “people’s president,” disagreed with Biddle’s methods and looked for a new Secretary of Treasury who would help him abolish the National Bank. In 1833, Roger B. Taney was appointed as Secretary of Treasury. In order to endure Jackson’s demands of helping small western farmers receive loans without collateral, Taney began depositing government funds into “pet banks,” state banks or local banks, ultimately removing all the capital from the National Bank thus eliminating the National Bank itself. Then the government lost all its economic power when congress chose to allot all surplus government funds to the states. Meanwhile, the “pet banks” began giving out numerous impulsive loans; this led to reckless spending and an uncontrolled economic growth as over speculated land was being purchased (Pg. 241).
This economic growth and land boom would suddenly reach a stop, quickly, followed by an economic crisis. In 1836, Jackson issued his “Specie Circulator,” which, “forbade the treasury to accept as payment for public land anything except gold & silver or National Bank Notes.” Immediately, the land boom stopped. As England entered a financial crisis, the flow of gold and silver from the British into the United States, from trade, that had helped finance the American economic boom, disappeared. Since the “pet banks had loaned more specie than it could pay back, the government did not receive enough bank notes because the “pet banks” did not have them, making the banks be in debt. (Pg. 242)
When Martin Van Buren assumed presidency, it was too late for him to remedy the economic problems Jackson had caused. Thus the mayor reasons for the economic crisis of 1837 were all caused from Jackson’s lack of economic knowledge (Slide #25): putting the National Bank funds in “pet banks,” eliminating the national bank, and irresponsible bank loans. After this, the economy was about to collapse, and Jackson’s “Specie Circulator” finished the job causing “pet banks” to become indebt: triggering the American economic panic of 1837.
-Milton Martinez
Sources:
Textbook
SlideShow
Andrew Jackson was a practical, self-made man with strong prejudices He was especially bitter against the Bank of United States, which was also known as the “monster”. He hated paper money in part because he suffered earlier in life from a devalued paper notes. Akin to Thomas Jefferson’s ideals, Jackson envisioned an economy of small farmers and artisans, believing that these were the proper economic pursuits that promoted virtue and independence. Jackson opposed the dominant economic trends in the East. He was worried about the new manufacturing centers and the increase in corporations in America. Moreover, he was worried that the rise of corporation would lead to a shift in power and wealth away from workers and landowners into the hands of bankers and capitalists.
ReplyDeleteJackson went into a bitter war with Nicholas Biddle, the president of the Bank. Henry Claw saw that the Bank was an issue that might defeat Jackson in the 1832 election. Clay induced Biddle to apply for a new charter for the Bank early in 1832, though the charter was not due to expire until 1836. Hoping that the President would veto the charter bill, Clay predicted that the President would lose enough votes in the East to cost him an election. The re-charter bill went to the President’s table, and he returned the bill bearing his veto. Instead of sending a brief message, Jackson sent a long message designed to garner votes. Henry Clay and Nicholas Biddle thought that Jackson’s demagogic appeal would have the opposite effect from that he intended. However, Jackson proved that he understood what the people wanted, and he won the 1832 presidential elect by a large margin.
Jackson was impatient and wanted to destroy the Bank at once. He was determined not to wait four years until the charter expired in 1836. Jackson decided to not deposit new funds in the Bank and to pay the nations bill with the funds already on deposit. These actions rapidly removed the government’s money from the bank. Jackson could not find a Secretary of Treasury who was willing to help him destroy the bank. Eventually, he appointed Roger B. Taney, who began depositing government funds into “pet banks” around the country.
Jackson successfully destroyed “the monster”, but the destruction of the Bank did not achieve what he had hoped for. Not only did Jackson want to eliminate the Bank, he wanted to restore the old type of economy. He didn’t like the credit-drive, speculation driven practices and the infamous economy practices that associated with the banking-based economic system. The death of the Bank encouraged the proliferation of new state banks that engaged in practices Jackson opposed. Rather than making sound loans, the “pet banks” lent their funds wildly and without counting the consequences. They were more anxious to stimulate growth and less concerned with protecting the nation’s money supply. Reckless spending lent to an uncontrolled economic growth. The government debt was paid off, and the surplus money that piled up into the “pet banks” spurred more economic growth. The overflow of cash into the economy led to inflation and over-speculation, as seen in the outrageous rise in prices of public land. Jackson later introduced the “Specie Circular”, which forbade the treasury to receive anything but gold or silver in payment for public lands. At once, the land boom stopped. Congress vetoed to distribute to the states the surplus funds in the treasury.
Jackson’s financial policy would lead to the Panic of 1837. The dramatic inflation in Jackson’s era raised the price of cotton and food dramatically. People also blamed Jackson’s Specie Circular. In response to the Specie Circular issued in 1836, the local banks immediately called in their loans. New York Banks later suspended the specie payment. Lacking sufficient hard money, banks failed, leading to depreciation in currency, skyrocketing unemployment and food prices still on the rise. Jackson continued to influence Van Buren, which eventually cost him the 1840 election.
William Pang
Andrew Jackson became president because he was a “People’s President.” All of the westerners voted for him, therefore they were the people he was most concerned to look after. The bank of the United States was a well run bank thanks to Nicholas Biddle, the banks president. The bank did not give loans out to anyone that asked for them. They did not loan money to banks that couldn't pay them back. The western banks could not get loans from the National bank because they were not qualified to pay the bank back. The Westerners were mad about this and because they were mad Jackson was Mad as well. Jackson had to keep his people happy even though it wasn't the best thing for the country. Jackson hated the National back and all that it stood for. He even went as far to call it unconstitutional.
ReplyDeleteThe Whig party saw Jackson as a tyrant and wanted him out of office. When the 1832 election came along, they saw it as the perfect opportunity to take Jackson out of office. They wanted to make Jackson look stupid in front of the whole nation. With the help of ambitious Henry Clay and Nicholas Biddle, they applied for a new charter to keep the national back still running after 1836. They knew that Jackson would veto this because of his feelings toward the national bank. They believed that congress would override his veto and make him look stupid. However, that is not how it went. Jackson did veto the bill, but congress did not have enough votes to override the veto. The national bank no longer existed as of 1836.
When Jackson was re-elected in 1832 his first order of business was to take down the national bank. He did this by emptying the bank of all its money. He then distributed the money in his 23 “Pet Banks. “ These banks started to give out loans to anyone and everyone who applied for one. This wild spending was followed by extreme economic growth. This is how Jackson’s policies played a role in the economic boom, they caused the whole boom to happen.
Financial panic in 1837 was after Jackson was out of office, but his policies were still the reason for it. He issued his “Specie Circular” in 1836, which forbade the treasury to accept anything but gold and silver for the payment of public lands. As a result of this obscured law people stopped buying land from the government. At the same time America was having a financial crisis, so was England. England was were a lot of american imports came from and exports went to so they made us go further into depression. They were another loss of american support. The president at this time was Martin Van Buren, but he was not the reason for the economic crisis, Jackson and his policies were.
sources: Mr.G's slide show and notes from class; Us history book
-Mackenzie Lancaster
Andrew Jackson was the seventh president of the United States, however he was very different from his predecessors. Jackson, or Old Hickory, was born and raised in Tennessee. This made him the first president to be born west of the Appalachians, and the first president to be from outside the original 13 states. Jackson was also different because he was not born an aristocrat unlike the previous presidents. This appealed to most of the citizens of the United States. He was a common man, and supported the hardworking lower class as opposed to the Eastern aristocrats. This bias would end up creating an economic boom, and later a financial panic in 1837.
ReplyDeleteHaving one goal in mind, to eliminate the national bank, Jackson replaced Nicholas Biddle with Roger B Taney. Nicholas Biddle had been managing the national bank very sufficiently, but Jackson hated the bank. When Jackson made Taney the secretary of treasury, he did this knowing that Taney would take all of the money out of the national bank and deposit it into Jackson’s “pet banks.” By doing this Jackson would make the national bank irrelevant, therefore somewhat accomplishing his goal of eliminating it. Jackson’s “pet banks” were almost all west of the Appalachians. He supported them in hoping that they would give loans to the small farmers west of the Appalachians. This was in large part due to his personal bias as he was a commoner from Tennessee. By putting all the national money in these pet banks, Jefferson was putting more money in circulation, creating a large economic boom. These banks would lend out money very recklessly however, and often found that the people that they lent their money to could not pay their loans back.
In 1836, Jackson issued the Specie Circular, which required the national treasury to only accept in payments for governmental land gold or silver. This curbed the over-speculation in land, and halted the economic boom. With the bad loans that the banks had started to lend out, and nobody being able to pay them back, the banks started to fail. This caused the financial panic of 1837. Of course by this time, Jackson’s presidency was over, and it was the next president (Martin Van Buren’s) mess to clean up. Jackson’s economic policies created a national boom by putting more money into the economy. However, it also created a recession because the banks would lend out more money than they really had. When Jackson passed the Specie Circular, the panic of 1837 hit. Overall Jackson’s lack of economic knowledge created a large economic boom, which was inevitably followed by a financial panic due to over inflation.
-Chris Bower
Sources:
Class notes based off of slides
Book
Dan Ives
Jimmy McKee
Reilly Kennedy
William Pang
Andrew Jackson's financial policies played a crucial role in the economic boom and panic of 1837. President Jackson's hatred for the bank was indescribable. Because he didn't trust paper money and stockholders who were placing money in the wrong hands, he wanted to put an end the National Bank. On the other end of the spectrum, leader of the National Bank, Nicholas Biddle, made a plan with Henry Clay to turn the public against Jackson. There plan was to propose a bill to re-charter the national bank before the 1832 election. They believed that Jackson would veto the bill, considering his strong disliking for the bank. After, they hoped that Congress would then over-ride Jackson's veto; leaving the President looking foolish (essentially leading to the whigs to the executive branch). There plan ended up failing. The congress didn't receive enough votes to over-ride Jackson's veto. As Jackson's had hoped, the bank was dead. Jackson finished off the national bank by not placing any new funds in the bank and effectively paying the nations bills. Jackson stood for the public opinion. Meaning that the way the bank operated by making the rich even more rich, needed to be changed.
ReplyDeleteJackson established "pet bank" with the help of Roger B. Taney which took the governmental funds to loan to people who couldn't repay the bank. This caused an economic boom. The pet banks contributed to paying off of the national debt which allowed the country to experience economic growth.
Soon enough, this economic growth came to an end with the pet banks failing and Jackson's poor decision to do something about his hatred for paper money. He placed the "Specie Circular" which disallowed the treasury to accept anything that wasn't gold and silver. This ended up as a mistake and left our 8th President, Martin Van Buren, to try to mend Jackson's mistakes. The financial panic of 1837 took place as a cause of Jackson's lack of economic knowledge, the eventual failing of the pet banks, eliminating the national bank, and input of the specie circular.
PJ Webb
Citations:
-History Text Book
-Mr. Gulotta's slideshow
-Jimmy Mckee
The financial panic of 1837 was a crisis in the United States that lasted until the mid 1840s. Andrew Jackson was president during the panic. The people of the United States liked him, due to his military victory in the Battle of New Orleans during the war of 1812. Jackson rarely doubted himself, and viewed the opinions of others with contempt One of Jackson’s main adversaries, Nicholas Biddle, served as the President of the Second Bank of the United States, and was operating a very well organized bank. As Reilly Kennedy stated, “Nicholas Biddle’s sound Banking that avoided inflation, confusion, and depression.” Jackson and Nicholas Biddle did not agree on just about everything. Biddle supported eastern businessmen over western farmers. Jackson opposed this idea entirely. He fired Biddle and appointed Roger Taney as the new Secretary of Treasury. With the National Bank not existing anymore, Taney took out all of the money and put them in a “Pet Banks.” Taney’s “Pet Banks,” worked temporarily for the western market of the United States, but would eventually cause the Panic of 1837. The “Pet Banks” were not stable and increased inflation throughout the United States. Jackson’s ideas sparked the financial crisis, but he did improve the western economy of the United States.
ReplyDeleteMax Way
Sources:
Reilly Kennedy
Mr. Gulotta's knowledge
Textbook
In 1837, the United States underwent an economic boom that ended up turning into a financial panic. Andrew Jackson was the President during this era; his financial policies, derived from his strong prejudices, were the main causes of this crisis called “The Panic of 1837”.
ReplyDeleteAndrew Jackson hated paper money and strongly opposed the Bank of the United States since he thought the bank was making the rich richer and the poor poorer, creating unfair privileges for the powerful. It was when Henry Clay convinced Nicholas Biddle, the president of the National Bank, to apply for a new charter for the bank in 1832 that Jackson’s hatred towards the bank rose even higher. Claiming that the bank gave rise to its stockholders aristocratic privileges in a democratic society, Jackson was determined to get rid of the National Bank and its cheap, even worthless, paper money. He wrote a long message that expressed his understanding not for economics but for the common people, thus earning him a convincing victory in the election of 1832. He then stopped depositing new funds in the National Bunk and started spending the funds that were already in the Bank, which removed the government’s money from the Bank of the United States. Furthermore, Roger Tany agreed to become the new Secretary of Treasury and to help Jackson “kill the Bank”. Tany distributed the governmental funds to small banks, mostly in the west. These “pet banks”, possessing huge amounts of federal money, impulsively lent money to landowners and businessmen, which seemingly encouraged economic growth. However, once these “pet banks” saw how much money they could make from lending the government’s money, they started spending money that they didn’t even have and issued more money. The excess of currency, as a result, led to the loss in its value. In other words, the economic boom suddenly became a crisis when tremendous amounts of money were spent and distributed uncontrollably.
Jackson, unsatisfied with the disappearance of the National bank, also wanted to replace the cheap and sometimes worthless paper money. In 1836, he issued the “Specie Circular”, which meant that the Treasury only accepted gold or silver for the payment of public lands. Paper money was in excess at the time and it took more and more bank notes to trade for gold or silver. The banks started to lose their money. Moreover, England, which traded gold and silver to the United States, was also suffering from a financial problem, which decreases the amount of gold and silver in circulation. As a result, the “pet banks” didn’t have enough hard money to pay the Treasury; they went broke. Debts were left unpaid; people didn’t get their money; businesses failed to carry on. The country went into the financial panic of 1837.
Son Nguyen
Sources: Textbook and Mr. Gulotta’s notes
Andrew Jackson’s financial policies and actions were the causes of the economic boom and the Depression of 1837. Jackson wanted people to expand westward. However, people who were moving west did not have the money, or credit, to receive loans from eastern banks. So, Jackson took all of the money from the National Bank and deposited it into 23 “Pet Banks”, which would then loan out money to these people wishing to buy land in the west. Yet, Jackson did not think this through. Why would the banks in the west loan out money if they knew that they wouldn’t get paid fully back, like the banks in the east had realized? Although the “Pet Banks”, all located west of the Appalachian Mountains, caused a land and economic boom, it was only short-lasting. Once Jackson passed the “Species Circular”, which stated that all new land bought must be paid for with gold or silver, paper money became almost worthless. As people rushed to trade in their now worthless paper money, they realized that the banks didn’t have enough gold to provide to all of their clients who wanted to buy land. This caused the “Pet Banks” to not get fully paid back, and therefore lost the money of the National Bank. Finally, to make matters worse, all of the surplus money from the “Pet Banks” had already been distributed to the states, and therefore lost to the National Government. Jackson’s financial policies were not thought through before being passed, and despite causing a short economic boom, caused a long-term depression.
ReplyDelete--Sam Rusoff
Credit: Notes and Colin Fuss
President Andrew Jackson did not like the national bank. He thought that it was unjust, since it was making rich people richer. Most wealthy people lived in the East, but he wanted to help the people in the West, since they were hard-working, he was from the West and he got most of his support from there. When a bill to re-charter the national bank was passed in 1832, although the original charter didn’t expire until 1836, Jackson vetoed it. He furthermore wanted to get rid of the national bank before 1836. However his views of the national bank did not affect his image to the citizens, so he was reelected in 1832. Now since the elections were over, he wanted to take all of the money out of the national bank, in order to ‘kill’ the national bank. He fired Nicholas Biddle—who was an excellent secretary of treasury, since he avoided inflation and depression—and employed Roger B. Taney as his secretary of treasury. Now, government bills were to be paid by the national bank, but any new funds were now going to be deposited in so called ‘pet banks.’ Resulting from that policy, the national money was now in 23 different banks, which were all very small and on the west side of the Appalachian Mountains. This decision led to the short-lasting economic boom. Banks were now loaning western farmers a lot of money, and they were spending this money on more land in the west. The economic boom was a product of this policy, since more money was in circulation. But some banks loaned out more money than they had, so inflation resulted. The amount of paper money was exceeding the amount of silver and gold in the US, so Jackson had to react. He issued the ‘Specie Circular’, which was a law stating that only silver and gold were accepted payments for public lands. He passed this law, because he wanted to increase the governments gold, to decrease the inflation. But now the banks that had been lending too much money were going bankrupt, and couldn’t loan any silver or gold. Hence, farmers could not buy more land and the economy was falling. This led to the financial panic in 1837.
ReplyDeleteJackson’s lack of economical knowledge, and his decisions to fire one of the best secretary’s of treasury, Nicholas Biddle; to transfer the money from the national bank to ‘pet banks’; and to pass the ‘Specie Circular’ all resulted in the financial panic of 1837.
Credits:
Dan Ives
Mr. Gulotta’s Advanced US History class
A History of the United States
Christopher Kreke
Jackson’s financial policies led to the decline in the economic boom and eventually the financial panic of 1837. President Andrew Jackson was strongly opposed to the National Bank in place because it did not serve to balance the wealth distribution between the classes. Wanting the farmers to be able to have the same opportunities to take loans without collateral and claims the bank unconstitutional. When there were not enough votes to override the president’s veto to Bill to renew the bank, the bank is no more. Treasury of State, Roger B. Taney removed all the money from the national bank and transferred it to Jackson’s “Pet Banks” which consisted of smaller scale banks spread throughout different states. Due to bad credit, these small local banks could not meet the needs of their market. Over-speculation led to excessive and unstable investments in land, goods, and stocks. Against the paper money, Jackson’s use of gold money, caused America problems of having to drain the United State’s gold supply by banks having to pay loans in gold, which led to the banks going out of business and moorages foreclosed. Today, it is quite ironic how Andrew Jackson stands on the present-day American twenty-dollar bill as he did not believe at all in paper currency and was strongly against the national bank. His face is paired today to something he didn’t believe just like how he stood for “Democratic Reform” which went against the backbone of our democratic-federal government’s economic ideals.
ReplyDeleteAlyssa Cass
Sources: http://www.history.com/topics/andrew-jackson
Mr. Gulotta’s class presentation
President Jackson strongly opposed the National Bank. The banks made the rich, bankers on the East Coast, richer, and the poor, farmers in the West, poorer. With Jackson coming from the West, he took offense to this. Nicholas Biddle, president of the bank at the time, ran the national bank very efficiently, only giving loans to those who had collateral so that the bank would not lose money. Nicholas Biddle also made the prime rate very high so that loans were given to people very carefully by banks. Biddle’s way of banking avoided inflation, confusion, and depression. Biddle’s brilliance made President Jackson seem as though he knew what he was doing, but a few ill-advised financial decisions would say otherwise.
ReplyDeleteThe Whig party strongly opposed President Jackson and wanted him out of office. The party set up a plan that would make him look foolish as well as aid the country. Their plan was to pass a bill to renew the national banks charter, then have President Jackson veto said bill. Once President Jackson vetoed the, congress would over-ride the bill. All of this was supposed to make Jackson look foolish and the Whigs would gain control of the White House. Unfortunately, after the veto, congress did not get enough votes to over-ride the bill and the National Bank died. President Jackson then went onto win the election. He appoints Roger B. Taney to be the new Secretary of Treasury. Taney takes all the money from the National Bank and deposits it into Jackson’s 23 “pet banks.” From there it was all downhill. The ‘Specie Circular’ stated that land had to be purchase with gold or silver, something the US did not have enough of. Jackson, who opposed paper money, supported the use of gold and silver, which today is ironic because he is on the twenty dollar bill.
Sam Mogul
Sources: Class Notes
Textbook
Christopher Kreke
Andrew Jackson’s policies and hatred towards the national bank played a major role in the economic boom as well as the financial panic of 1837. Jackson was a strong opponent of the national bank, he felt it was unconstitutional and favored rich Easterners over other citizens of the nation. Having come from the West, where most of his voter pool lay, Jackson wasn’t keen on the idea of having his fellow frontiersmen rejected on loan applications while rich Easterners received the necessary loans. However, a lot of the issues regarding the banks and money started as a political stunt stemming from the Whig Party making a push for office. Nicholas Biddle and Henry Clay, knowing Jackson’s hatred for the bank, made an attempt to renew the banks’ charter in 1832. They expected Jackson to veto the charter, but they also expected that congress would overturn the veto, making Jackson look foolish in the process. When they proposed the charter, Jackson vetoed it as expected, however Congress didn’t approve of overturning the veto, which would eventually lead to the death of the national bank. With the veto against the national bank, and Jackson’s re-election his policies really began to negatively affect the future of the American economy. Jackson, determined to finish off the national bank once and for all and not wanting to wait until the end of its charter in 1836, decided to drain the money from the banks and placed them in “pet banks” around the country. These “pet banks,” leant wildly, while the national bank had been more conservative. The massive loans being dished out lead to massive land sales and economic growth. The government was able to pay off its debt with money left to spare in the “pet banks,” and Jackson the loyal frontiersmen was giving out loans to whoever had plans to go West or who was already out West. The sale of public land went from two million dollars to twenty four million dollars, however this overgrowth of US spending was not Jackson’s only fault. Jackson was also against paper money, and this lead him to issue his Specie Circular, which made paper money useless, and only gold and silver could be used to pay for public lands. This crushed the land boom and later that year, Congress voted to distribute the species funds to the states from the Treasury. The loss of paper money really created the financial panic of 1837 because banks began to restrict loans and stop giving away gold and silver for their notes. With the British banks refusing to assist the United States with a shortage of gold and silver due to their own economic struggles, and with a bad year of crops for farmers the financial panic of 1837 emerged. Therefore, it can be concluded that both the economic boom as well as the financial panic of 1837 were both caused by the impulsive and emotionally driven policies of President Andrew Jackson.
ReplyDeleteVaughan Kavanaugh
Sources:
Mr. Gulotta's classroom discussions
"A History of the United States"
The decisions conveyed by President Andrew Jackson led to the economic boom and later the panic of 1837. Born in poverty, Andrew Jackson had become a wealthy Tennessee lawyer and rising politician by 1812. In 1829, Jackson was voted the seventh president of the United States; however, his policies differed than previous leaders. He was the first president that did not originate from one of the 13 states, and was raised west of the Appalachian Mountains; therefore, he was concerned with the prosperity of his western supporters. Since Jackson grew up in humble circumstances, he believed in the common man; thus, he gained the encouragement of the hard-working lower class. This idea of the common man was countered by the corrupt formation of an aristocracy within the National Bank.
ReplyDeleteJackson wanted the small farmers of the west to get loans even without collateral; however, the national bank, with its President, Nicholas Biddle, would not grant loans to anyone that asked, especially western banks that could not pay the loans back; thus, Jackson despised what the National Bank stood for and wanted to get rid of it. This created a tension between Biddle and Jackson, which caused Nicholas Biddle to apply for a new charter for the National Bank in 1832. Biddle knew Jackson would veto the bill, which would go against congress, and result in a loss of supporters. It was intended by Biddle that congress would overrule the bill, and the Bank would still exist; however this was not the case and congress did not veto the bill. Jackson then had the power to use the money from the National Bank in ways he pleased, such as paying off the national bill and having his newly elected secretary of treasury, Roger B Taney, place funds into “pet banks”, most west of the Appalachians; therefore, his hopes of give loans to the small farmers west of the Appalachians, and eliminating the national bank were in progress. With all the national money in these pet banks, the circulation of money was rapid, generating an economic boom; however people that they lent their money to could not pay their loans back.
The only thing that Jackson hated more than the National Bank was paper money. In 1836, Jackson input "Specie Circular," "which forbade the Treasury to receive anything but gold or silver in payment for public lands." This caused the economic boom to come to a quick close. The banks replied to this by calling in their loans and because there was not enough hard money circulating, the banks failed which resulted in the Panic of 1837. It was Jackson’s lack of financial knowledge that led to the fallouts of these banks.
Molly Crabtree
sources:
Class power points
text book
Chris Bower
Jimmy McKee
Mackenzie Lancaster
Andrew Jackson became the 7th president of the United States after the 1828 election. His fame originated from winning the battle of New Orleans, The United States’ only win in the War of 1812. After this, he was considered a hero and his fame would take him through many ups and downs during his presidency.
ReplyDeleteJackson easily took the election of 1828, but even though he was able to become the president of the United States, which is no easy feat, he made some very poor and ill-advised presidential decisions. First, his belief in the national bank was non-existent; actually, he was strongly against the idea of the whole banking system. This is why he fought with Nicholas Biddle, the president of the bank of the United States. Biddle was doing a striking job when it came to both keeping the US out of financial troubles and even leading it into a more wealthy state. President Jackson however disagreed with him. Biddle’s financial system favored eastern businessmen while Jackson wanted to help out western farmers. Since Jackson strongly disliked the national bank, he decided to get rid of his pesky problem. From there, he decided to move the nations wealth from the national bank into “pet banks” to the west. People could then on go to the banks and receive loans without collateral. The banks would give out loans but without collateral, but no one paid the bank back. This whole situation led to two separate things. On one side, the there was mass economic growth during this time, but on the other side, with all this money in circulation, inflation quickly set it. This financial policy was what led to the economic panic of 1837.
Jackson was the 7th president of the United States, following some of the greatest presidents of all time like Washington and Jefferson. Although these were tough acts to follow, Jackson could have made some better decisions when it came to the economy of the US. On one hand, his policy led to a huge economic boom in the west, but on the other hand, it also led to the financial panic of 1837.
- Patrick Frey
Sources:
Class Slides
Dan Ives
William Pang
Martin Van Buren won the 1936 against Daniel Webster largely because he was backed by President Andrew Jackson. Shortly after his election, the Unite States fell into a depression which dominates Van Buren’s presidency. However, the fault of the depression lies not with Van Buren but the beloved president before him, Jackson. It was Jackson’s ignorant economic policies that gave the economy its instability and eventually led the its collapse. From the beginning Jackson favored the states west of the Appalachian Mountains, mainly because they were the ones who elected him, and many of the policies he instated reflected this.
ReplyDeleteJackson didn’t care much about who worked under him. One such person was Nicolas Biddle, who was the president of the national bank. Biddle, at the time, was using new, sound banking techniques to avoid Inflation, depression, and confusion in the general populace, and was generally doing a very good job running the country’s economics. But Jackson wasn’t concerned with the good banking policies, he was concerned that Biddle was limiting national loans given to western banks, as these banks were less reliable then the eastern ones. Jackson gets rid of Biddle because of this, and proceeds to give loans to the smaller banks in the west. These banks would start what mainly caused the depression, which was loaning without collateral. In the west, the small farmers still wanted loans but did not have sufficient credit. The banks, once they had the money under Jackson’s policy, gave them loans nonetheless. The second thing Jackson did to instigate the depression was completely destroy the national bank. He ignored the Supreme Court’s ruling, which he had done before, and moved all the money from the national banks into “pet” banks. These banks are called such because they are the banks, in the west, which Jackson favored. These banks proceeded to keep handing out loans and eventually the economy could not take the debt accumulated. In 1836, the Deposit and Distribution Act had all the surplus money placed into these banks as well, which essentially served to drain the economy further.
Although the policies, as described above, eventually failed, in the short term they worked very well. The monetary stimulation boosted infrastructure and economic development, and thus painted Jackson in a good light. Luckily for Jackson, the policies didn’t completely fail until the next president was in office, meaning he didn’t have to take as much of the blame.
-Jake Diamond
Sources:
~Mr. Gulotta's slideshows
~Christine Qi's Comment
Even though Andrew Jackson was not the president of the United States anymore, his financial policies played a drastic role in the economic boom and financial crisis of 1837.
ReplyDeleteThe start of such policies began back in 1832 when Mr. Jackson was re-elected president. Better known as the “People’s President”, Jackson’s supporters were mainly found in in the West of the United States. While being president, Jackson’s standpoint on the Second National Bank was of disapproval he thought it was unconstitutional. For him, the monetary aristocracy – the National Bank preferred to lend loans to the East than to the West – was something unacceptable. Therefore, westerners did not like the national bank. While the people in the west were the greatest support and the reason why Jackson became president, he decided to do something against this situation.
In 1832, the Whig party, Nicolas Biddle and Henry Clay believed that Andrew Jackson was a tyrant. Not only he did not respect the constitution, but also he made clear that the most powerful branch was the executive one. Due to Jackson’s behavior, Nicolas Biddle passed a charter that will keep the national bank up and running. Clay, Biddle and the Whig party believed that Jackson would veto the charter. Then, Congress would override his veto making him look foolish. However, such thing did not happen. The Congress did not get enough votes to override the veto, and the National bank was now in the hand of the president.
After this event, Jackson decided to take out all the money of the National bank and place it in his “Pet banks”. The Pet banks are 23 small and unreliable banks spread all over the States, but mainly found in the west territory. In the beginning, these banks would lend the money wisely, but eventually excessive circulation of money brought inflation in the US economy. Since “paper money was not backed up by gold and silver, the prices were soaring” (Christine Qi). The placement of the money in these Pet banks showed a fantastic increase in the economy of the USA. However, by lending money to people that could not pay back to the Pet banks a financial crisis occurred.
To deal with the crisis, a species circular was established. Banks would have to pay the government back in gold and silver. Due to this law, the banks stopped giving an excessive amount of loans and most of them shut down. Because of the rapid decrease in the banks, the United States went into an economic depression in 1837.
- clementina
sources:
-Mr.Gulotta's notes
-Christine Qi's Comment
-Mackenzie Lancasters comment
Both the economic boom and the financial panic of 1837 were directly influenced by President Jackson’s financial policies. Andrew Jackson was a new type of president. He did not come from the traditional wealthy Virginian family, and was the first president from West of the Appalachian Mountains. Everything that Jackson was at the time of his presidency he had worked hard to obtain. He was a fighter, and a courageous one at that. He was a fierce man, who always believed himself to be right. All of these qualities shaped him into a man who greatly distrusted the powerful National Bank.
ReplyDeleteFrom the beginning of his Presidency, one is able to tell that Jackson is a man for the people. This can most likely be traced back to his humble beginnings. Jackson puts more power in the hands of the people by way of creating paper ballots, a two party system, and presidential conventions that were open to anyone who wished to attend. Jackson also disposed of the requirement that one must own land in order to vote, and created more positions in office. Jackson, with a set of morals molded by his beginnings, deemed the National Bank to be unconstitutional, as it favored the wealthy easterner over the humble, hardworking common man. Money influenced the banks, so those who didn’t come from it found the process of acquiring loans very tedious, if not impossible.
In 1832, the Whig Party, long time opposers of Jackson, made a push for office. Their party, led by Nicholas Biddle and Henry Clay, thought that they could gain political favoritism over the people by requesting a recharter for the National Bank. The Whigs knew that Jackson would veto the recharter, which he ended up doing. However, the Whigs believed that congress would overturn Jackson’s veto, making Jackson look like a fool. This situation did not occur, and the congress went along with Jackson’s veto. Without a recharter, the National Bank would cease to exist, which would directly cause the financial panic of 1837. While the Banks existence would continue until the end of its charter in 1836, Jackson, wanting its death to come as soon as possible, had his treasurer Roger B. Taney drain all of the money from the National Bank and put them in twenty three small “Pet Banks” that favored Jacksons supporters and the everyday man. The handouts of loans from these banks were much more lenient than those of the National Bank. Thus, more loans were given out, and more land was being bought. This caused a temporary economic boom in the States. Jackson then issued his specie circular, which required that land be paid for in either gold or silver, making paper money useless. The U.S. however did not have enough gold and silver to back the paper money. Therefore, the loans which had been used to purchase the land could not be backed, and the land was not purchased. The results of this caused the financial panic of 1837. With this information, it becomes evident that President Jackson and his financial policies were indeed the primary causes of both the short-lived economic boom, and its subsequent financial panic of 1837.
- Evan Liddy
Sources:
Class Slides
“A History of the United States”
Classroom Discussions