Jackson had been thinking about his next move for years. Its almost goes without saying that the loans were never repaid. The clashes between Jackson and Biddle likely contributed to the Panic of 1837, a major economic crisis that impacted the U.S. and doomed the presidency of Jackson's successor, President Van Buren. Daniel Webster and Henry Clay helped to prepare the petition for recharter which was presented to Congress in January 1832. Jackson blamed the "rich and powerful" for using the "government [for] their self purposes." "In a management move that would prove not as helpful to the bank as his other changes, Biddle distanced himself from the secretary of the Treasury. 13, Although bad for Clay and the nation's economy, the Panic of 1819 had been good for the BUS. No less than Biddle did he know that removing the deposits would mean war, and he wanted to be sure that his lieutenants were as devoted to the cause as he was." 74 Voters responded to Jackson's populism rather than Biddle's economics. 152, The land speculation had fueled state investments in internal improvements that compounded financial difficulties across the country. The cure spawned another disease, wrote Brands: The economy continued to prosper through 1836. Historian Edward Pessen wrote: "Biddle's explanation to friends of why he would not relent displays his arrogance and at the same time the ingenuousness of his conviction that the Bank's welfare was the nation's highest political and economic good: "But, if, from too great sensitiveness, from the fear of offending, or the desire or conciliating, the bank permits itself to be frightened or coaxed into any relaxation of its present measures, the relief will itself be cited as evidence that the measures of the government are not injurious or oppressive, and the bank will inevitably be prostrated." In so doing, he believed, it subverted the outcomes free and equal individuals would have arrived at in government as well as in the economy," wrote financial historian Susan Hoffman. search. Led by Henry Clay, they opposed the Bank of the United States because its regulatory hand got in the way of state banks and because its dominance of U.S. government deposits kept those deposits out of state bank vaults." By weakening public confidence in paper currency at a time when the United States practiced fractional reserve banking, adhered to an international gold standard, curtailed branching by state-chartered banks, and lacked a national lender of last resort, Jackson's war against the Bank generated more casualties than just the institution itself." It was only a question of whether Jackson would more likely approve of a recharter before or after his reelection." "6" Historian Sean Wilentz observed that the new bank was designed to curb inflation and speculative frenzies: "Acting as a financial balance-wheel, the national bank would, in principle, keep currency values and capital markets stable, and prevent national economic expansion from turning into an orgy of overspeculation and runaway inflation." The Founding Fathers never intended it for `ordinary cases,' he insisted. © 2005-document.write(new Date().getFullYear()) The Lehrman Institute. between railroad securities and banks. In celebration of this event a large group of them marched in procession up Pennsylvania Avenue accompanied by a hearse bearing a coffin labeled `The Subtreasury Plan.'" Meanwhile the President had been obliged to do without law what he wished Congress to authorize by law. 199 By the end of the planned process, the Treasury was empty and there was nothing to distribute. Taney correctly saw the recharter bill as a form of political blackmail: "Now, as I understand the application at the present time, it means if the Bank says to the President, your next election is at hand - if you charter us, well - if not, beware." The Deposit Act of Congress provided for the distributed of the federal surplus to the states. (Letter from Andrew Jackson to Martin Van Buren, March 22, 1857). An independent treasury system emerged when President Andrew Jackson transferred in 1833 government funds from the Bank of the United States to state banks. Historian Woodrow Wilson wrote: Over time, Biddle returned Jackson's disdain. For the bourgeoisie, it quelled the conflict of labor militancy and Bank War. 38. It was an economically and politically shortsighted act. Again, they had miscalculated. Indeed, the panic, which was due so much to a temporary tightness and fears not realized of something worse, began to mend by midsummer. The land rush had seen the number of banks grow to more than 1,000, with each issuing its own colorful bank notes - normally in two- and five-dollar denominations, backed by no one knew what." 58. The Specie Circular was promulgated by the Treasury in July 1836. The inheritances of party virulence and distrust which he had taken over from Jackson were too heavy a weight. Brands noted: "Vetoes were rare in the days before Jackson; his six predecessors had turned back but ten bills total. As Biddle was growing in financial stature, his future nemesis, General Andrew Jackson, was growing in political stature. The infant industries of the Northeast, shoes and textiles, laid off thousands of employees. 137 Wilson observed: "With regard to its economic effects, two arguments for retaining the circular were pressed; these began to uncover a profound ambiguity in the Jacksonian heritage. Although Treasury Secretary [Levi] Woodbury had dutifully regulated the pets, an administration committed as a general principle against federal regulation and planning did not find the task congenial." And that I believe would emphatically be the fate of the present President.
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