First term The
Second Bank of the United States ("national bank") had been chartered under President
James Madison to restore an economy devastated by the
War of 1812, and President Monroe had appointed
Nicholas Biddle as the national bank's executive in 1822. The national bank operated branches in several states, and granted these branches a large degree of autonomy. The national bank's duties included storing government funds, issuing
banknotes, selling Treasury
securities, facilitating foreign transactions, and extending credit to businesses and other banks. The national bank also played an important role in regulating the money supply, which consisted of government-issued
coins and privately issued banknotes. By presenting private banknotes for redemption (exchange for coins) to their issuers, the national bank limited the supply of paper money in the country. By the time Jackson took office, the national bank had approximately $35 million in capital, which represented more than twice the annual expenditures of the U.S. government. The national bank had not been a major issue in the 1828 election, but some in the country, including Jackson, despised the institution. The national bank's stock was mostly held by foreigners, Jackson insisted, and it exerted an undue amount of control over the political system. Jackson had developed a life-long hatred for banks earlier in his career, and he wanted to remove all banknotes from circulation. In his address to Congress in 1830, Jackson called for the abolition of the national bank. Senator
Thomas Hart Benton, a strong supporter of the president despite a brawl years earlier, gave a speech strongly denouncing the Bank and calling for open debate on its recharter, but Senator
Daniel Webster led a motion that narrowly defeated the resolution. Seeking to reconcile with the Jackson administration, Biddle appointed Democrats to the boards of national bank branches and worked to speed up the retirement of the national debt. Though Jackson and many of his allies detested the national bank, others within the Jacksonian coalition, including Eaton and Senator
Samuel Smith, supported the institution. Despite some misgivings, Jackson supported a plan proposed in late 1831 by his moderately pro-national bank Treasury Secretary Louis McLane, who was secretly working with Biddle. McLane's plan would recharter a reformed version of the national bank in a way that would free up funds, partly through the sale of government stock in the national bank. The funds would in turn be used to strengthen the military or pay off the nation's debt. Over the objections of Attorney General Taney, an irreconcilable opponent of the national bank, Jackson allowed McLane to publish a Treasury Report which essentially recommended rechartering the national bank. Hoping to make the national bank a major issue in the 1832 election, Clay and Webster urged Biddle to immediately apply for recharter rather than wait to reach a compromise with the administration. Biddle received advice to the contrary from moderate Democrats such as McLane and William Lewis, who argued that Biddle should wait because Jackson would likely veto the recharter bill. In January 1832, Biddle submitted to Congress a renewal of the national bank's charter without any of McLane's proposed reforms. In May 1832, after months of congressional debate, Biddle assented to a revised bill that would re-charter the national bank but give Congress and the president new powers in controlling the institution, while also limiting the national bank's ability to hold real estate and establish branches. The recharter bill passed the Senate on June 11 and the House on July 3, 1832. When Van Buren met Jackson on July 4, Jackson declared, "The Bank, Mr. Van Buren, is trying to kill me. But I will kill it." Jackson officially vetoed the bill on July 10. His veto message, crafted primarily by Taney, Kendall, and Andrew Jackson Donelson, attacked the national bank as an agent of inequality that supported only the wealthy. He also noted that, as the national bank's charter would not expire for another four years, the next two Congresses would be able to consider new re-chartering bills. Jackson's message ended on a sharp note that Remini says "almost sounded like a call to class warfare": when the laws undertake to add ... artificial distinctions ... to make the rich richer and the potent more powerful, the humble members of society — the farmers, mechanics, and laborers — who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. Jackson's enemies castigated the veto as "the very slang of the leveller and demagogue", claiming Jackson was using class warfare to gain support from the common man. Whig leader
Daniel Webster denounced the veto message on the Senate floor.It manifestly seeks to influence the poor against the rich. It wantonly attacks whole classes of the people, for the purpose of turning against them the prejudices and resentments of other classes. It is a State paper which finds no topic too exciting for its use, no passion too inflammable for its address and its solicitation.
1832 election In the years leading up to the 1832 election, it was unclear whether Jackson, frequently in poor health, would seek re-election. However, Jackson announced his intention to seek re-election in 1831. Various individuals were considered as possible Democratic vice presidential nominees in the 1832 election, including Van Buren, Judge
Philip P. Barbour, Treasury Secretary McLane, Senator
William Wilkins, Associate Justice John McLean, and even Calhoun. In order to agree on a national ticket, the Democrats held their first
national convention in May 1832. Van Buren emerged as Jackson's preferred running mate after the Eaton affair, and the former Secretary of State won the vice presidential nomination on the first ballot of the
1832 Democratic National Convention. Later that year, on December 28, Calhoun resigned as vice president, after having been elected to the U.S. Senate. In the 1832 election, Jackson would face a divided opposition in the form of the
Anti-Masonic Party and the National Republicans. Since the disappearance and possible murder of
William Morgan in 1827, the Anti-Masonic Party had emerged by capitalizing on opposition to
Freemasonry. In 1830, a meeting of Anti-Masons called for the first national nominating convention, and in September 1831 the fledgling party nominated a national ticket led by
William Wirt of Maryland. In December 1831, the National Republicans convened and nominated a ticket led by Henry Clay. Clay had rejected overtures from the Anti-Masonic Party, and his attempt to convince Calhoun to serve as his running mate failed, leaving the opposition to Jackson split among different leaders. For vice president, the National Republicans nominated
John Sergeant, who had served as an attorney for both the Second Bank of the United States and the Cherokee Nation. The political struggle over the national bank emerged as the major issue of the 1832 campaign, although the tariff and especially Indian removal were also important issues in several states. National Republicans also focused on Jackson's alleged executive tyranny; one cartoon described the president as "
King Andrew the First." At Biddle's direction, the national bank poured thousands of dollars into the campaign to defeat Jackson, seemingly confirming Jackson's view that it interfered in the political process. On July 21, Clay said privately, "The campaign is over, and I think we have won the victory." Jackson, however, managed to successfully portray his veto of the national bank recharter as a defense of the common man against governmental tyranny. Clay proved to be no match for Jackson's popularity and the Democratic Party's skillful campaigning. Jackson won the election by a landslide, winning 219 electoral votes, well over the 145 needed. Jackson won 54.2 percent of the popular vote nationwide, a slight decline from his 1828 popular vote victory. Jackson received 88 percent of the popular vote in states south of Kentucky and Maryland, while Clay received no votes in Georgia, Alabama, or Mississippi. Clay received 37% of the popular vote and 49 electoral votes, whereas Wirt received 8% of the vote and seven electoral votes. The South Carolina legislature awarded the state's electoral votes to states' rights advocate
John Floyd. Despite Jackson's victory in the presidential election, his allies lost control of the Senate.
Removal of deposits and censure Jackson's victory in the 1832 election meant that he could veto an extension of the national bank's charter before that charter expired in 1836. Though a congressional override of his veto was unlikely, Jackson still wanted to ensure that the national bank would be abolished. His administration was unable to legally remove federal deposits from the national bank unless the Secretary of the Treasury issued an official finding that the national bank was a fiscally unsound institution, but the national bank was clearly solvent. In January 1833, at the height of the Nullification Crisis, Congressman
James K. Polk introduced a bill that would provide for the removal of the federal government's deposits from the national bank, but it was quickly defeated. Following the end of the Nullification Crisis in March 1833, Jackson renewed his offensive against the national bank, despite some opposition from within his own cabinet. Throughout mid-1833, Jackson made preparations to remove federal deposits from the national bank, sending Amos Kendall to meet with the leaders of various banks to see whether they would accept federal deposits. Jackson ordered Secretary of the Treasury William Duane to remove existing federal deposits from the national bank, but Duane refused to issue a finding that the federal government's deposits in the national bank were unsafe. In response, Jackson replaced Duane with Roger Taney, who received an interim appointment. Rather than removing existing deposits from the national bank, Taney and Jackson pursued a new policy in which the government would deposit future revenue elsewhere, while paying all expenses from its deposits with the national bank. The Jackson administration placed government deposits in a variety of state banks which were friendly to the administration's policies; critics labeled these banks as "
pet banks." Biddle responded to the withdrawals by stockpiling the national bank's reserves and contracting credit, thus causing interest rates to rise. Intended to force Jackson into a compromise, the move backfired, increasing sentiment against the national bank. The transfer of large amounts of bank deposits, combined with rising interest rates, contributed to the onset of a financial panic in late 1833. When Congress reconvened in December 1833, it immediately became embroiled in the controversy regarding the withdrawals from the national bank and the subsequent financial panic. Neither the Democrats nor the anti-Jacksonians exercised complete control of either house of Congress, but the Democrats were stronger in the House of Representatives while the anti-Jacksonians were stronger in the Senate. Senator Clay introduced a measure to censure Jackson for unconstitutionally removing federal deposits from the national bank, and in March 1834, the Senate voted to censure Jackson in a 26–20 vote. It also rejected Taney as Treasury Secretary, forcing Jackson to find a different treasury secretary; he eventually nominated Levi Woodbury, who won confirmation. Led by Polk, the House declared on April 4, 1834, that the national bank "ought not to be rechartered" and that the depositions "ought not to be restored." The House also voted to allow the pet banks to continue to serve as places of deposit, and sought to investigate whether the national bank had deliberately instigated the financial panic. By mid-1834, the relatively mild panic had ended, and Jackson's opponents had failed to recharter the national bank or reverse Jackson's removals. The national bank's federal charter expired in 1836, and though Biddle's institution continued to function under a Pennsylvania charter, it never regained the influence it had had at the beginning of Jackson's administration. Following the loss of the national bank's federal charter,
New York City supplanted
Philadelphia (the national bank's headquarters) as the nation's financial capital. In January 1837, when the Jacksonians had a majority in the Senate, the censure was expunged after years of effort by Jackson supporters. ==Rise of the Whig Party==