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N0KFQ > TODAY 10.09.16 16:12l 70 Lines 3431 Bytes #999 (0) @ WW
BID : 7012_N0KFQ
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Subj: Today in History - Sep 10
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Sent: 160910/1349Z 7012@N0KFQ.#SWMO.MO.USA.NA BPQ6.0.12
1833
Andrew Jackson shuts down Second Bank of the U.S.
On this day in 1833, President Andrew Jackson announces that the
government will no longer use the Second Bank of the United
States, the country's national bank. He then used his executive
power to remove all federal funds from the bank, in the final
salvo of what is referred to as the "Bank War."
A national bank had first been created by George Washington and
Alexander Hamilton in 1791 to serve as a central repository for
federal funds. The Second Bank of the United States was founded
in 1816; five years after this first bank's charter had expired.
Traditionally, the bank had been run by a board of directors with
ties to industry and manufacturing, and therefore was biased
toward the urban and industrial northern states. Jackson, the
epitome of the frontiersman, resented the bank's lack of funding
for expansion into the unsettled Western territories. Jackson
also objected to the bank's unusual political and economic power
and to the lack of congressional oversight over its business
dealings.
Jackson, known as obstinate and brutish but a man of the common
people, called for an investigation into the bank's policies and
political agenda as soon as he settled in to the White House in
March 1829. To Jackson, the bank symbolized how a privileged
class of businessmen oppressed the will of the common people of
America. He made clear that he planned to challenge the
constitutionality of the bank, much to the horror of its
supporters. In response, the director of the bank, Nicholas
Biddle, flexed his own political power, turning to members of
Congress, including the powerful Kentucky Senator Henry Clay and
leading businessmen sympathetic to the bank, to fight Jackson.
Later that year, Jackson presented his case against the bank in a
speech to Congress; to his chagrin, its members generally agreed
that the bank was indeed constitutional. Still, controversy over
the bank lingered for the next three years. In 1932, the
divisiveness led to a split in Jackson's cabinet and, that same
year, the obstinate president vetoed an attempt by Congress to
draw up a new charter for the bank. All of this took place during
Jackson's bid for re-election; the bank's future was the focal
point of a bitter political campaign between the Democratic
incumbent Jackson and his opponent Henry Clay. Jackson's promises
to empower the "common man" of America appealed to the voters and
paved the way for his victory. He felt he had received a mandate
from the public to close the bank once and for all, despite
Congress' objections. Biddle vowed to continue to fight the
president, saying that "just because he has scalped Indians and
imprisoned Judges [does not mean] he is to have his way with the
bank."
On September 10, 1833, Jackson removed all federal funds from the
Second Bank of the U.S., redistributing them to various state
banks, which were popularly known as "pet banks." In addition, he
announced that deposits to the bank would not be accepted after
October 1. Finally, Jackson had succeeded in destroying the bank;
its charter officially expired in 1836.
Jackson did not emerge unscathed from the scandal. In 1834,
Congress censured Jackson for what they viewed as his abuse of
presidential power during the Bank War.
73 - K.O., n0kfq
N0KFQ @ N0KFQ.#SWMO.MO.USA.NA
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