Andrew Jackson 1767-1845 A brief biography
The End of the Bank War
On May 6, Jackson and his entourage embarked on a tour of the country,
mostly in the Northeast, where pro Union sentiment was especially strong.
He was greeted by huge cheering crowds wherever he went, and received an
honorary Doctorate of Law from Harvard, to the disgust of John Quincy Adams.
He finally had to cut the trip short due to "bleeding at the lungs", at
least partly due to the bullet he had carried in his chest for more than
20 years.
Soon after, at this zenith of his popularity, Jackson set out the ensure the demise of the Second Bank of the United States. The Bank's money still gave it enormous power, and Nicholas Biddle was more desperate than ever to preserve the bank, as later events would show.
Jackson had already kicked his pro-bank Secretary of the Treasury, McLane, upstairs to the more prestigious State Department (Livingston was willingly made ambassador to France). McLane's replacement was William J. Duane, at first thought to be amenable to Jackson's bank position. He also said he would resign should he be unable to carry out the President's policy.
In the summer of 1833, Amos Kendall went on a trip around the country looking for banks into which the Federal banking deposits could be deposited should they be withdrawn from the BUS. While some banks were afraid of the BUS's vengeance, or refused on principle to accept the deposits, the trip proved that there were plenty of banks which would agree to hold government funds despite the BUS's wrath. When Jackson told Duane to begin transferring Federal deposits to other banks, however, Duane refused, and would not resign. Jackson dismissed Duane, and he left, establishing another Jackson precedent - the firing, without pretense of resignation, of a cabinet member.
Roger B. Taney then replaced Duane, a man who enthusiastically supported the destruction of the BUS. As the withdrawal of funds went forward, the bank began a severe tightening of funds, restricting loans, and calling in as many debts as it could. The opinion of Remini, Bowers and others is that this went far beyond anything justified by the reduction in the banks funds, and that the bank in fact deliberately engineered a panic. The panic was real, causing wide-spread loss of jobs, and grinding to a halt of industry.
At first, National Republicans accepted the panic as being caused by the withdrawal of bank funds. As it continued and deepened, the country became more polarized. It was in this period (in 1834) that the National Republicans assumed the name of Whigs, the name, since the 17th century of the English party against an all powerful king, and for giving the highest authority to Parliament. Thus they labeled Jackson "King Andrew I", and drew political cartoons depicting him as a king, with a scepter labeled "Veto".
Before 1834 was over, however, many former friends of the bank became disgusted at its conduct, and even the governor of Pennsylvania economically aided as it was by the Bank in Philadelphia, denounced the bank. Webster separated himself from the other National Republicans on this issue, spoke out against it (as he had spoken out against Nullification), and became, for a while, a good friend of the Democratic administration.
In the end, the BUS was stripped of the funds which the government had placed in its keeping. It lost its friends, including Clay, and quietly lost its standing as a national bank. It was rechartered as a state bank in Pennsylvania, but only lasted a few years after that.
