Andrew Jackson's Presidency

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Based on Andrew Jackson's speech "Veto of the Bank Bill on 1832" What are Jackson's major objections to the National Bank? Do you find them convincing?

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The Bank of the United States was set up in 1791 based upon a proposal by Alexander Hamilton. It was to function as a national bank, securing federal funds and serving as the financial agent of the government. The Second Bank of the United States was approved and established in 1816 with a 20-year charter. Proponents of the bank proposed a renewal of the bank's charter in 1832, four years before the expiration of the old charter, in order to make the bank's existence and importance an issue for the 1832 presidential elections. Despite the threat of possible political backlash, President Jackson vetoed the bill. He delineated his reasons in his message on July 10, 1832.

Jackson's primary reason for the veto was that he felt that the bank existed as a monopoly—not for the benefit of the American people, but only for the richest segments of the population as well as foreign investors. He felt that the renewal of the Bank Act would comprise a gift to the privileged few and to foreigners at the expense of common Americans. He said:

Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people.

Jackson expressed regret that "the rich and powerful too often bend the acts of government to their selfish purposes" and added that "humble members of society" were justified in their complaints of the abuses of government.

The other major objection Jackson made to the legislation was its "invasion of the rights and powers of the several states." In other words, the monopoly and power of the Federal Bank weakened state banks.

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Jackson's primary objection to the re-chartering of the Bank can be summarized in his later statements that the bank was a "monster."  He argued that the bank had earned millions for its investors, many of whom were foreign; and that the bank enjoyed an unfair advantage as it constituted a monopoly which profited its shareholders at the expense of the public.  He also noted that the monopoly of the bank constituted a danger to state banks which could not compete with it. This he considered a violation of all the principles upon which the United States was founded. It was possible, he argued, that if the bank's charter were continuously renewed, it would only be a matter of time before the bank exercised its influence in political matters. He concluded by stating:

Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union.

If one considers that the Bank, under Nicholas Biddle, had made its influence felt on the economy by instigating a panic, and how under its previous President, Cheves, it had forced state banks to honor bank notes in specie, Jackson's argument appears to have some merit under the circumstances of the times.

 

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