Bank War in the Jacksonian Age


The fight between president Andrew Jackson and the president of the second Bank of the United States, Nicholas Biddle, was not only over the BUS, but over democracy also.

The second Bank of the United States, established in 1816, was a mixed private/public institution with far reaching influence:

  • Held the U.S. Treasury’s tax receipts on deposit.
  • Handled U.S. government’s transactions.
  • Issued its own paper currency, which was legal tender.
  • Made loans to other banks, businesses, and individuals.
  • Marketed the Treasury’s securities around the world.
  • Presented the paper of state banks for redemption.
  • Expanded and contracted money supply.

Biddle, president of the BUS since 1823, had effectively managed the bank, which was partially responsible for the good economy when Jackson became president in 1829. However, storm clouds had arisen: the bank’s charter was to expire in 1836, and the anti-bank Jackson hovered ominously.

Recharter Veto

Jackson distrusted banks. As a young man, he was nearly financially ruined when his investments in land and promissory notes tanked. He was a hard money advocate: gold and silver coins were solid, not like bank issued paper notes which were not always redeemable and supposedly caused great fluctuations in the economy. Thus Jackson, in his first two annual messages to Congress, complained about the performance and dangerous influence of the BUS. Congress did nothing.

The confident and arrogant Biddle took a big gamble. He decided to apply for the BUS’s renewal four years early in 1832, an election year. Jackson, running for reelection, would not dare veto an institution that was popular with legislators of both parties and Jackson’s official cabinet (his Kitchen Cabinet was another matter). After many memorials poured into Congress from the public supporting recharter, the measure passed in July.

Jackson interpreted Biddle’s early bid for recharter as a declaration of war, according to historian Daniel Walker Howe, “The bank is trying to kill me, but I will kill it!” Advised by his anti-bank Kitchen Cabinet of Amos Kendall, Francis Blair, and Roger Taney, Jackson’s veto message awakened the anti-wealthy, anti-bank, and limited government sentiments of the common people. It would become a manifesto of the Democratic party. To Biddle, it was “a manifesto of anarchy.”

Removal of Government Deposits

Jackson had plunged a knife into Biddle and the BUS, but even after easily winning reelection against National Republican and Biddle ally Henry Clay, Jackson twisted the knife. Starting October 1, 1833, Jackson removed government deposits from the BUS over the objections of his Treasury Secretary William Duane and the Senate. Biddle was still dangerous in Jackson’s eyes. During the election, he had offered loans and credit to influence votes. Some thought he would use the bank to slow down the economy to goad legislators to override the veto.

Right they were. Biddle contracted credit and reduced loans from the BUS by $18 million from August 1833 to November 1834. As a result, businesses failed, men lost their jobs, and money was unobtainable. Protests in the form of petitions, letters, and delegations flooded Congress and the White House. Jackson responded to one delegation, “Go to Nicholas Biddle. We have no money here, gentleman. Biddle has all the money.”

The Senate heard the cries. In a symbolic gesture, it narrowly passed (26-20) a censure of Jackson on March 28, 1834, claiming he had exceeded his authority in removing the deposits and dismissing Duane. A week later, the House voted not to recharter the BUS. Biddle blinked. In November, the BUS began loaning money as normal. Jackson won the battle of wills and he and his supporters believed they had protected democracy.

When Jackson’s censure was stricken from the Senate’s record in1837, the last shot in the Biddle-Jackson Bank War was fired. The vision of democracy that Jackson and the Democrats favored- limited government, no national bank, strict construction of the Constitution- won out over the vision of Biddle and the National Republicans or Whigs- government guided economic development with a national bank that would expand opportunity.


  1. Howe, Daniel Walker, What Hath God Wrought, Oxford: New York, 2007.
  2. Meacham, Jon, American Lion, Random House: New York, 2008.
  3. Schlesinger, Arthur Jr., The Age of Jackson, Back Bay: Boston, 1945.