CLEP U.S. History I 065: Bank War and Economic Power

The veto message blended constitutional and democratic arguments. Jackson rejected the Supreme Court’s McCulloch decision as binding the executive’s own constitutional judgment, criticized foreign and wealthy stockholders, and argued that government should not grant unequal privileges. Congress lacked votes to override, and voters reelected him. The episode turned institutional policy into a referendum on economic power.

Jackson then removed federal deposits before the charter expired, placing them in selected state “pet banks.” Treasury secretaries resisted. Jackson replaced officials until Roger Taney complied. The Senate censured Jackson, later expunging the censure. The Bank contracted credit in an effort to demonstrate its necessity, causing hardship and further damaging its reputation. Its federal charter expired in 1836.

State-bank lending and land speculation then expanded. The Specie Circular attempted to restrain land purchases by demanding gold or silver. These policies contributed to financial instability, but the Panic of 1837 also reflected cotton prices, British credit, and broader speculation. A precise account neither blames Jackson alone nor treats policy as irrelevant.

A focused video lesson

Heimler's History traces the people and chronology behind this lesson. Listen for the evidence that sharpens the written account, then try the questions below.

Video: JACKSON and Federal Power [APUSH Review Unit 4 Topic 8] Period 4: 1800-1848, Heimler's History.