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The Bank of United States (Effects of the BUS Crisis (state banks (¨pet…
The Bank of United States
Causes of the BUS Crisis
Panic of 1819
Bank was most powerful lending institution
Local banks and state governments feared a monopolistic central bank
South distrusted the North with the power of a central bank that favored them
Bank needed to be rechartered or dismantled
Effects of the BUS Crisis
Jackson vetoed the renewal of the bank
Supporters of bank could withhold support from Jackson if he vetoed
Public despised the bank and Jackon became more popular
state banks (¨pet banks¨) established to hold federal deposits
money sitting in banks did not help increase national capital; led to overspeculation
Specie Circular
lack of stable banking system
Arguments FOR Jackson´s Actions
the rich monopolized the BUS
central bank diminished states´ rights
too much power held by private hands
Bank could become too easily corrupt
Arguments AGAINST Jackson's Actions
Chief Justice John Marshall established constitutionality of the BUS in
McCulloch v. Maryland
in 1819
BUS provided a fixed, uniform currency for the economy
currency regulated and controlled America´s economic growth
BUS provided financial stability
contributed to America´s economic prosperity