President Andrew Jackson’s administration could not side-step the obstacles from the very first term with the president himself waging war against the Bank of the United States. When the financial plan of Alexander Hamilton expired in 1811, the Congress established a new charter to the Second Bank of United States (BUS) which had its headquarters in Philadelphia. The main role of the bank was to stabilize the American economy through restricting excess money supply through bank notes. The bank was also supposed to compel other banks to pay their debts in gold in a timely manner. President Jackson, elected through the Democratic Party, strongly opposed the paper currency mainly from personal experience. The supporters of the government also detested the bank notes with a perception that it was not realizing the level of economic growth expected. They even blamed the national bank for the Economic Panic of 1819 insisting that it made the situation worse by hoarding gold at the expense of other banks in the country.
One decade after the Panic, President Jackson, in his first term confronted the bank through his director, Nicholas Biddle. It is true that the president was very skeptic about the significance of the national bank to the economic prosperity. As a young man, President Jackson had invested in the paper currency and land where the assets suddenly lost substantial value. From a political perspective, he was against the controversial proposal of Hamilton to establish a central bank similar to that of England, America’s former colonists. The Second Bank of the United States was similar to central bank because it was the only financial institution that was chartered by the Federal government. Beside circulating bank notes in the economy, BUS amassed much power which the president considered undemocratic. The supporters of BUS that included the Whigs perceived the national bank as an economic tool for national development.
The ...