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This bank was created by Congress and was signed in by James Madison, the reason this bank was created was to address the large issue of inflation, which resulted from the War of 1812. It received 35 million dollars to begin its operations and began issuing banknotes. This was modeled after the first one, and like the first national bank, was not renewed after the 20 year charter, leading to the Bank Wars.
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This allowed the national bank control over speculative banks, but since the national bank was already unpopular, this contributed to them being blamed for the Panic of 1819.
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This was a case where it was called into questioning if the national bank was constitutional or not, the supreme court ruled in favor of yes, it is constitutional under the Necessary and Proper Clause. This reinforced the power the federal government has over states.
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This was our nations first large economic depression, and this leads to greater political division, and calls for the end of imprisonment for debt. The panic lead to a variety of issues such as high unemployment, banks failing, mortgage's being foreclosed, and the price of crops dropping.
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Jackson wins through political organizers, such as Martin Buren, Dendall, and Ritchie. They created and organized mass rallies in his favor. this was the first time that an election was the focus of the public. he won in a landslide and he took this as a sign to begin his war on banks.
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Jackson decides to veto the charter for the 2nd national bank as he has a large mistrust in it. This mistrust came from a past experience in which he accepted banknotes as people bought land from him, only for them to become bankrupt and the notes become useless. he also believed that there was too much power in the bank's hands, and that it would affect state rights and the people of America, and benefit only the rich.
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To further weaken the national banks, Jackson withdrew government money from the bank and deposited it into select state banks. There was a total of 23 different state banks that federal funds were put into. Instead of carrying out Jackson's order, the Secretary of Treasury resigned.
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The Whig-dominated Senate censured, or disagreed/reprimanded Jackson for his actions against the bank and Democrats, the censure resolution was expunged in 1837.
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The second Bank Charter expires, turning the bank into a state bank for Pennsylvania, without the national bank regulating other banks, they begin to print excessive amounts of money, causing increased inflation and the Panic of 1837. Jackson refused to recharter it.
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Jackson cripples the national bank by making it where only gold and silver are accepted when paying for land. This led to high inflation, as many investors panicked and banks closed because they didn't have enough money in reserves for the incoming notes. He disliked the power that the paper currency gave to the banks and prevented them from issuing bills less than 5$, which would be equivalent to 170 dollars today.
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Due to Jackson's choices and refusal to support a national bank, a large economic crisis befalls the nation, resulting in job loss, banks closing, money lost value, and prices increased. The Whigs Party and the Democratic Party began using this as political ammunition to scare others as to why they should be for or against the banking system.
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The Whig candidate, William Harrison, won against Buren, blaming the Democratic party for the economic crisis that the nation was experiencing at the time. This played a large role in the two party system that has developed in America today.