How is the "Second Bank of the United States" significant in the history of the United States?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The Second Bank of the United States was significant in the history of the US in two main ways.  Both of these had more to do with reactions to the bank than to the actual actions of the bank.

The Second Bank of the United States was chartered in 1816 and began to operate in 1817.  Almost from the time that it opened, it was unpopular with some people.  People felt that the bank was too concerned with maintaining a sound currency, regardless of what that would do to the American economy.  The bank was the target of much unhappiness from populists.

Partly as a result of this, a number of states started to tax the bank.  The first of these states was Maryland.  The tax that Maryland imposed ended up being challenged in court.  This led to the very important Supreme Court case of McCulloch v. Maryland.  In this case, decided in 1819, the Supreme Court held that the Congress had the power to create a bank even though that power was not actually specified in the Constitution.  In making this ruling, the Court gave the Congress “implied powers.”  In other words, it held that Congress could do a variety of things even though the Constitution did not say it could.  This doctrine would have far-reaching effects on our society, helping to allow the huge government that we have today.

The other time that the bank was important in US history was in the presidency of Andrew Jackson.  Jackson was a populist who did not trust the bank.  He felt it operated for the benefit of elites and that it harmed the common people.  For this reason, he embarked on the “Bank War,” in which he tried to destroy the Second Bank of the United States.  Jackson was able to destroy the bank in what is one of the most important incidents in his presidency.  This act has helped lead to Jackson being known as the president of the “common man.”  His destruction of the bank also helped lead to the Panic of 1837.

Thus, the Second Bank of the United States was important at at least two points in American history.

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