Removal of DepositsShortly after the election, the war escalated. In September of 1833, Attorney General Taney wrote to Jackson and expressed his complete agreement with him to remove the government deposits from the Bank and place them in state banks. Although this letter was written a year after the election, it has been suggested that Jackson had every intention to remove the deposits immediately after the election, a suggestion that this letter would seem to support. The escalation of the war was underlined by several motives on Jackson's part.
First, in doing so, he changed the status of the Bank, altogether as it would no longer have a financial association with the government. Second, the lack of funds crippled the chances of the Bank to reverse the decision made in the election, reducing the power of the Bank altogether which was, of course, Jackson's hopes and intentions all along. Third, Jackson could reinforce his position as President and control the direction of the government. Despite the opposition of his entire Cabinet, with the exception of Taney, Jackson held firm on his decision to remove the deposits. He told Francis P. Blair that his mind was made up and that Biddle would not be allowed to continue using public money to break down the public administration.
In March of 1833, Jackson assembled his cabinet for a meeting and announced that he had an alternative to the Bank of the United States should it be dismantled. He proposed that a central bank be placed in Washington with branches in each of the states. He proposed that the government have more oversight and control of the Bank by appointing, not only the president, but also as many of the directors as it saw fit. The proposed bank, however, would not have been put into place until after Jackson's notion of the government first conducting a "full and fair experiment" of the financial affairs without the use of any sort of national bank was met. In the interim period, Jackson proposed that public funds be distributed into state banks.
It was clear that Jackson would receive little support from any of his cabinet members other than Taney. In a letter dated March 24, 1833 but addressed to no one in particular, Jackson questioned his own proposal. He said that he truly believed that the financial concerns of the government could be carried out in state banks but remained unsure of a deposit system for government funds. This letter displays the President's dilemma but it also reinforces his intentions to remove the deposits and, ultimately, destroy the Bank. He completed the letter by restating his opposition to the Bank and made clear his intentions to render the Bank harmless to the government and disabling those who prospered from it with the intentions of corrupting Congress.
The time had come for action. Treasury Secretary William J. Duane was instructed by Jackson to remove the deposits after the President had made a formal announcement. Months earlier, Duane had agreed to resign if he did not follow the President's directions and, because of this, Duane replied to Jackson's instructions by asking for more time to think about removing the deposits. Jackson refused to be patient since his mind was already made up on the decision and, recognizing that Duane was stalling, went forth with his announcement on September 20, 1833. Duane then refused to resign for two reasons, the first was because he knew Jackson would have a more difficult time dealing with a second shakeup of his cabinet and the second reason was, most likely, due to the deference Jackson had shown him. Jackson never considered Duane's appointment to be important and ended up neglecting to give Duane a chance by not allowing him to decide whether or not he would remove the deposits.
Jackson was left without options and was forced to inform Duane that his services were no longer required. Roger B. Taney was then appointed as Treasury Secretary and instructed to oversee the removal of deposits. The end had come for the Bank of the United States. Taney enlisted the aid of Amos Kendall and Levi Woodbury. Together, they issued the order of September 25, 1833 which announced that on October 1, 1833, the government would shift from national banking to deposit banking via state banks.