By: Evan Donahoe
The corrupt bankruptcy
On July 10, 1832, President Andrew Jackson vetoed a bill that would have renewed the corporate charter for the Second Bank of the United States. It was one of the most noticeable acts of his presidency.
The Second Bank of the United States was created in the aftermath of the War of 1812 and had been controversial still today. Many people blamed the Bank for the Panic of 1819, and Westerners and Southerners felt that the Bank in general, and its lending policies in particular, favored Northern interests over their own. Most bankers believed that the Bank of the United States had helped stabilize the national money supply and have overall banking and commercial environment during the 1820s, the Bank still had vociferous opponents, President Jackson foremost among them.
The renewed charter
The petition to recharter the Bank became an instant act of decision in the Congress. Jackson did himself despised the Bank of the United States and had been an outspoken opponent since before he became President, many supporters, especially from Eastern and Midwest states, supported the Bank. The recharter bill passed both houses of Congress.
The economies' corrupt panic
The new chartered bank was formed to avoid inflation. the national bank would, be kept as a national stabilizer for currency values and capital markets stable, and prevent national economic expansion from turning into an inflation.
The Second Bank indeed was back alive from the war, national bank was not fortunate in its choice of directors who first inflated the currency and then had renewed the charter.
The second bank suddenly burst opened, with hundreds of banks shutting down, and thousands of depositors and investors job brokered. The land rush had seen the number of banks grow to more than 1,000, with each issuing its own colorful bank notes - normally in two- and five-dollar denominations, backed by no one knew what. Jackson made land sell for gold or silver. However the banks were running out of gold and silver so had to shutdown. Many people went homeless because of that.
Economic leadership or economic currency was very poor. In 1819, as the economic prices collapsed." Sellers said that it was hard for state banks to collect money from borrowers or meet issues to the national Bank. When most state banks had a flood of business failures and personal liquidations throughout Americans into their economic society of panic economic prostration.