Jackson vs. The National Bank

        Alexander Hamilton believed that in order for the United States to become an economic power, the nation needed a strong central banking system.  Hamilton's Plan was very controversial, many Americans did not trust banks, and critics like Thomas Jefferson warned that a strong bank would favor the wealthy and take advantage of the farmers.

     Andrew Jackson did not trust the National Bank of the United States, and when he became President he made it known that he planned on  "killing" The Bank.  The Bank ran on a charter, or a license that needed to be renewed after a certain period of time.  In the past, Congress had consistently renewed the Bank's charter allowing it to grow and become strong.  The President of the Bank, Nicholas Biddle was accused of granting special loans to states that had Congressmen that supported the Bank.  Today, we would say that the Bank acted like a special interest group and was buying votes from members of Congress over the years.

     Biddle asked Congress to renew the Bank's charter ahead of schedule.  This was a political gamble, but Biddle thought he would be successful in having Congress renew the charter. Congress complied and both the Senate and the House renewed the charter.  When Jackson heard of this plan, he shouted, "The Bank is trying to kill me, but I will kill it!"

    Jackson vetoed the Bill as promised, then made a controversial move to finally kill The Bank.  He ordered that all of the nation's gold and paper money be removed rom the National Bank and placed in smaller state banks.  By removing the money from the National Bank, Jackson made it impossible to the N.B. to give out loans making it useless.

   To his supporters, Jackson was a hero to the common man.  Jackson claimed that the state banks would make it easier  for farmers to get a loan and would not favor the rich and wealthy.

His critics claimed that Jackson was acting like a monarch and ignoring the authority of Congress. Without a strong, central Bank, the claimed it would be impossible to support business growth and to get loans for state projects.