Jackson, the Bank War, and Nullification

Jackson saw the Second Bank of the United States as a private monopoly that answered to wealthy stockholders, not voters, and concentrated power dangerously. When Congress voted to recharter it in 1832, he vetoed the bill, calling it unconstitutional and unjust to ordinary citizens. He then starved the Bank by pulling federal deposits out and placing them in state banks, nicknamed pet banks, which lent freely and fueled speculation in land and paper money. That loose credit, combined with Jackson's Specie Circular demanding gold or silver for land purchases, helped trigger the Panic of 1837, a severe economic collapse that struck right as Jackson left office.

The nullification crisis tested a different kind of power. In 1828 and 1832, Congress passed tariffs that South Carolina called ruinous to its economy. South Carolina declared the tariff null inside its borders, reviving an argument that states could judge and reject federal law. Jackson, a slaveholder and strong unionist, refused to accept this. He got Congress to pass a Force Bill authorizing troops to collect the tariff, while backing a compromise tariff that lowered rates enough to end the standoff peacefully.

Both fights show the same Jackson: expanding presidential authority to crush rivals, whether a financial institution or a defiant state, while also using the spoils system to reward loyal supporters with federal jobs, binding the growing Democratic Party together through patronage.