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The Second Bank was chartered after the War of 1812 and was heavily funded. Many people were not a fan of the Second Bank from the beginning. New states did not like the monopoly it had over the nation's credit and currency. The western and southern territories believed it was the government favoring the wealthy North yet again.
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The Panic of 1819 was the first national economic crisis in the United States. Many people blamed this financial crisis on the Second Bank because it required loans to be paid back in gold or silver.
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Andrew Jackson is elected in the 1828 election. As a westerner, Jackson was firmly against having a national bank, so his goal was to dismantle it.
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Henry Clay and Daniel Webster passed a bill to renew the Second Bank charter, though the first one was not due to expire until 1836. Their goal was to force Jackson into a decision so that some voters would feel alienated by him. Jackson vetoed the bill, which Clay tried to highlight during the presidential campaign. Unfortunately for Clay, his plan failed and Jackson won the election.
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President Andrew Jackson vetoed the renewal of the Second Bank's charter almost immediately. As a westerner, he was against a national bank in the first place, and he did not like the monopoly and privilege it gave northerners. In his explanation he deemed the national bank unconstitutional and dangerous to the people's freedoms.
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When Jackson started withdrawing federal funds from the Second Bank, Nicholas Biddle decided to restrict the loans the Bank could give out. This ended up limiting the available money for the people, which caused financial panic.
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President Jackson withdrew money from the Second Banks and deposited the government's money in certain state banks instead. Conservatives believed the decentralization of the bank would open new opportunities for business and credit.
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The Senate declared that Jackson's decision to move federal funds to be unconstitutional. Democrats wanted to remove this action from record once they took control again in 1837.
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Jackson believed that the only sound forms of currency were gold and silver, so he made moves towards replacing all bank notes with hard currency. President Jackson made it so that public lands could only be bought with hard currency.
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When the charter for the Second Bank ran out in 1836, Nicholas Biddle accepted an offer from Pennsylvania to make the bank state chartered. Since the regulating powerhouse was no longer, states began printing their own money again and loaning extremely large sums. This led to high inflation rates, and since Jacksonian policy favored gold and silver to bank notes, investors were quick to withdraw their money. Banks ran out of reserves quickly and were forced to shut down.
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Martin Van Buren proposed an independent treasury to keep the nations finances separate from its government. This plan was heavily criticized, and it actually went against Jackson's decision to put federal money in state banks. It was passed by Congress in the summer of 1840.
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The election of 1840 was between William Henry Harrison, whom was supported by the west, and John Tyler, whom was supported by the south. Harrison won the election, but died a month later, which resulted in Tyler becoming president. This created a large divide between the president and the people, because Tyler was not the majority vote.