The Bank War
President Jackson also met another challenge to the federal government's power. This time the "threat" came from business interests of the Northeast.
The Second Bank of the United States had opened branches throughout the nation. It had become one of the richest and most powerful banks in the world. Its banknotes gave the United States a sound currency. It also kept close watch over other banks to make sure they did not lend money without good security.
Nevertheless, President Jackson was against the Bank. He said it was an undemocratic "money power." He felt it gave a few hundred men, the owners of its stock, power over the entire nation. He thought it was especially unfair to the South and West. The people of these sections had borrowed large sums from the bank. Every year they had to pay millions of dollars in interest to the rich easterners who owned the bank.
The Bank's charter [license], issued in 1816, was good until 1836. But Henry Clay introduced a bill to renew the Bank's charter in 1832. Clay expected to run against Jackson in the presidential election that year. He thought that Jackson would be afraid to veto the bank bill. Clay believed Jackson would lose many votes if he did veto the bank bill.
Congress quickly passed the new charter for the Bank. Jackson just as quickly vetoed the bill. His veto message contained such a strong attack on the Bank that Congress did not dare override his veto. To save the bank, its owners spent large sums to help Clay win the election. But when the electoral votes were counted, the total was 219 for Jackson, and only 49 for Clay. The American people clearly supported Jackson's attack on the bank, as well as his other policies.
Jackson was angry because the owners of the Bank had supported his opponent. "The Bank is trying to kill me," he said, "but I will kill it." He withdrew the federal government's money and desposited it in state banks. Without the federal government's money the Second Bank of the United States could not survive. Jackson had won his war against the Bank.