Andrew Jackson vetoed the bill re-chartering the Second Bank in July 1832 by arguing that in the form presented to him it was incompatible with “justice,” “sound policy” and the Constitution.
The bank’s charter was unfair, Jackson argued in his veto message, because it gave the bank considerable, almost monopolistic, market power, specifically in the markets that moved financial resources around the country and into and out of other nations. That market power increased the bank’s profits and thus its stock price, “which operated as a gratuity of many millions [of dollars] to the stockholders,” who, Jackson claimed, were mostly “foreigners” and “our own opulent citizens.” He then suggested that it would be fairer to most Americans to create a wholly government-owned bank instead, or at least to auction the Second Bank of the US’s monopoly privileges to the highest bidder.
The charter was bad policy for several technical reasons. First, it gave incorporated state banks better note redemption rights than those accorded to ordinary Americans and thereby created “a bond of union among the banking establishments of the nation, erecting them into an interest separate from that of the people.” Second, it exempted foreign stockholders from taxation but contained a clause that would allow states to tax resident stockholders. The effect of the differential taxation, Jackson believed, would drive most of the stock overseas and thus “make the American people debtors to aliens in nearly the whole amount due to this bank, and send across the Atlantic from two to five millions of specie every year to pay the bank dividends.” Because foreigners could not vote in corporate elections, the Bank would fall under the control of its few remaining citizen stockholders. “It is easy to conceive,” Jackson argued, “that great evils to our country and its institutions” would result “from such a concentration of power in the hands of a few men irresponsible to the people.”
Finally, Jackson believed the Bank of the US was unconstitutional, noting that while there was precedent for a federally chartered bank there was also precedent for not renewing its charter, as in 1811. He then rejected the notion that the Supreme Court was the sole or final arbiter of constitutionality, arguing instead that “the Congress, the Executive and the Court must each for itself be guided by its own opinion of the Constitution.” He ended with a long litany of reasons why he could not reconcile his oath to uphold the Constitution with the bank’s re-charter bill.
FAQs
Although Jackson's order met with heavy criticism from members of his administration, most of the government's money had been moved out of the Bank by late 1833. The loss of the federal government's deposits caused the Bank to shrink in both size and influence.
Why did Andrew Jackson veto the renewal charter of the 2nd Bank of the United States quizlet? ›
Why did Andrew Jackson veto the bill to recharter the Second Bank of the United States in 1832? He thought it interfered with the rights of states and the liberties of the people.
Why did Jackson veto the proposal for the rechartering of the Bank of the United States? ›
Andrew Jackson vetoed the bill re-chartering the Second Bank in July 1832 by arguing that in the form presented to him it was incompatible with “justice,” “sound policy” and the Constitution.
Who vetoed the recharter of the 2nd National bank of the US? ›
Maryland (1819). President Andrew Jackson disagreed. Jackson—like Jefferson and Madison before him—thought that the Bank of the United States was unconstitutional. When Congress voted to extend the Second Bank's charter in 1832, Jackson vetoed the bill.
What did Jackson do with all the government's money after he vetoed the Second Bank of the United States? ›
This bill passed Congress, but Jackson vetoed it, declaring that the Bank was "unauthorized by the Constitution, subversive to the rights of States, and dangerous to the liberties of the people." After his reelection, Jackson announced that the Government would no longer deposit Federal funds with the Bank and would ...
What were the results of the conflict over the Second Bank of the United States? ›
The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its replacement by state banks.
What happened to the funds that were in the Second Bank of the United States? ›
By 1836, all of the Second Bank's funds had been transferred to state banks.
What was the question of the constitutionality of the Second Bank of the United States? ›
A question on the minds of politicians and voters in 1832 America was whether the Second Bank of the United States, the country's second “Hamiltonian” federal bank, was constitutional. Although Chief Justice John Marshall had ruled it so in his 1819 landmark McCulloch v.
Why did Jackson declare war on the Bank of the United States? ›
Beyond characterizing the bank as hopelessly corrupt, he argued "the powers conferred upon [the bank were] ... not only unnecessary, but dangerous to the Government and the country." He went on, warning that if it continued to operate, "great evils... might flow from such a concentration of power in the hands of a few ...
How did Andrew Jackson's war against the Second Bank of the United States contribute to the formation of the Whig Party? ›
Final answer: Andrew Jackson's war against the Second Bank of the United States contributed to the formation of the Whig Party by attracting a coalition of politicians who opposed Jackson's actions and believed in a strong central government.
Andrew Jackson announced in 1833 that the government would no longer use Second Bank of the United States. He then removed all federal funds from the bank in what was called the final blast of the “bank wars.”
What was the veto message of the bill on the Bank of the United States Andrew Jackson 1832? ›
I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.
Who led the opposition to the Second Bank of the United States? ›
Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the bank in the 1830s. The bank was in general disrepute among most Americans when Nicholas Biddle, the third and last president of the bank, was appointed by President James Monroe in 1823.
Why did Madison recharter the Second Bank of the United States? ›
The War of 1812 had left a formidable debt. Inflation surged ever upward due to the ever-increasing amount of notes issued by private banks. Specie was jealously hoarded. For these reasons President Madison signed a bill authorizing the 2nd Bank in 1816 with a charter lasting 20 years.
Did James Madison support the Second National Bank? ›
President James Madison supported the creation of a second Bank as a way to finance the war with Britain but with peace negotiations he pulled back. However, the war had hurt the economy and in April 10, 1816 (14 Stats.
What were the results of Jackson's veto of the bank bill? ›
Jackson's opponents ridiculed these “pet banks” as a source of corruption, but to no avail. The removal of the government's deposits crippled the federal bank, and it dissolved in 1836. The next year, another financial panic, the Panic of 1837, swept the country.
What was the result of Jackson's Bank War? ›
Firstly, the war resulted in the United States lacking a central bank for decades. It was a major victory for the Democratic Party and resulted in political divisiveness over the next several decades. It also may have inadvertently caused the financial panics throughout the 1830s in the United States.
What was one result of the election of Andrew Jackson in 1828? ›
Jackson dominated in the South and the West, aided in part by the passage of the Tariff of 1828. With the ongoing expansion of the right to vote to most white men, the election marked a dramatic expansion of the electorate, with 9.5% of Americans casting a vote for president, compared with 3.4% in 1824.
