Copyright

What Was the Bank War of 1832? - Definition & Summary

Instructor: Christina Boggs

Chrissy has taught secondary English and history and writes online curriculum. She has an M.S.Ed. in Social Studies Education.

The Bank War of 1832 was not a war as we might think of a war today. It did not involve an army or any physical fighting. Instead, it was a heated political battle between Andrew Jackson and the Second Bank of the United States.

What's a Bank War?

What was your first thought when you heard the phrase 'bank war'? Perhaps you pictured two banks competing against one another for customers or business. Maybe you imagined it literally and envisioned two banks actually fighting one another. Neither of these scenarios, however, describes the Bank War of 1832. The war was actually fought between President Andrew Jackson and the Second Bank of the United States.

The First and Second Banks of the United States

In 1791, our country's Founding Fathers were at a crossroads. Under the Articles of Confederation, the federal government was unable to create or collect taxes. No taxes might sound pretty great, but in reality, the government needed that money to pay down a huge amount of debt from the Revolutionary War. Under the new Constitution, the federal government could raise the money it needed to pay down the national debt and to perform other functions like build roads and maintain an army.

But after collecting taxes from the states, where would that money go? Where should the government keep it? Men like Alexander Hamilton wanted to create a national bank. Hamilton argued that a national bank would make paying debts much simpler. Others like Thomas Jefferson claimed that a national bank was unconstitutional, or not legal according to the Constitution. In 1791, Congress chartered the First Bank of the United States for 20 years. The United States did without a national bank for five years, before the Second Bank of the United States was created in 1816. Like the bank before it, the Second Bank had a 20-year charter and would expire in 1836.

Andrew Jackson and the Bank

Andrew Jackson became president in 1829, a year that marked the beginning of a long-standing battle with the Second Bank of the United States. Before his presidency, Jackson lived in the western part of North Carolina that eventually became the state of Tennessee. Folks from that region were a rough-and-tumble bunch who largely made a living by farming. As a result, they had a general dislike for the rich business owners of the North and East. Jackson's mindset was not much different, especially when it came to the Second Bank.

The Second Bank held all of the government's funds, but the bank was not regulated or controlled by the government. Instead, it was run by a board of directors made up of wealthy private citizens, mostly from the North and East. Jackson considered the bank to be not only unconstitutional but an institution that benefited a handful of rich Americans at the expense of the rest of the country.

Andrew Jackson
Andrew Jackson

The Bank Recharter Bill

Nicholas Biddle, president of the Second Bank of the United States, was deeply concerned that the bank's charter would not be renewed in 1836. Fortunately for Biddle, several members of the National Republican Party were pro-bank and willing to help him extend the bank's charter. Seeing a window of opportunity in 1832, Henry Clay and Daniel Webster managed to push the Bank Recharter Bill through Congress, effectively extending the bank's charter for another 20 years even though its current charter had not expired yet.

Nicholas Biddle
Nicholas Biddle

At the time, Henry Clay was running for president against the incumbent, Andrew Jackson. Clay thought for sure Jackson would keep his mouth shut about the Bank Recharter Bill. After all, Jackson wouldn't want to upset any of his voters in the North or the East. Clay was wrong. In the words of Andrew Jackson, 'The bank is trying to kill me, but I will kill it.' With that, Jackson vetoed the law and prevented an extension of the Second Bank's charter.

Bank War of 1832

Jackson's veto was just the beginning of the Bank War of 1832. After securing his reelection, Jackson knew that simply vetoing the bank's charter was not enough. After all, the bank still had another three years before it expired. That was plenty of time for Congress to pass another recharter bill! In Jackson's mind, there was only one option: destroy the bank.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create An Account
Support