4. Andrew Jackson and the Bank of the United States
President Andrew Jackson’s expansion of Presidential power was demonstrated in many areas, but perhaps none more so than in his determination to exterminate the 2nd Bank of the United States in 1833. Jackson intended to cripple the bank by removing its deposits and distributing them to banks throughout the states, which became known as pet banks to the opposition. At the time the United States government did not issue paper money; banknotes were issued by the state banks, and the receipt of deposits from the Bank of the United States led the pet banks to issue an increasing amount of paper money, leading to inflation. Jackson refused to re-charter the Bank of the United States in the belief that it held too much power.
By 1834 opposition to Jackson had led to the formation of the Whig Party and a movement within the Senate, led by Henry Clay, to censure the President. Politically motivated by Clay, who intended to use the censure as an issue during the next presidential election, the motion passed by a vote of 26 – 20, and Jackson was officially censured by the Senate in March 1834. Jackson responded by saying that Clay was, “as full of fury as a drunken man in a brothel”. The House of Representatives supported Jackson, passing resolutions which agreed that the bank should not be re-chartered and that the deposits should not be returned, which the Senate had demanded. In January of 1835, Jackson succeeded in completely paying off the national debt, the only time that feat has been accomplished in American history.