Did the Bank War cause the Panic of 1837? Richard Hofstadter from The American Political Tradition and the Men
Who Made It believes President Andrew Jackson’s refusal to recharter the Bank of the United States was politically
popular but economically harmful to the long-term growth of the United States. Peter Tenim, from The Jacksonian
Economy, believes international factors, such as changes in the monetary policies of the Bank of England, the
supply of silver from Mexico, and the price of southern cotton, were far more important than Jackson’s banking
policies in determining fluctuations in the 1830s economy. The two intelligent men present their facts and arguments
well and make it hard for the reader to mold their opinion for either side. After reading both arguments and
thoroughly reviewing the facts stated, I took the side of Peter Tenim by saying that the war against the Bank of the
United States was not the cause of the Panic of 1837.
I have to agree with Mr. Tenim simply because there were more factors present in his opinion involving the Panic of
1837. The opinion of Mr. Hofstadter revolved around one factor, which was the war against the Bank of the United
States. In order to somewhat disprove Mr. Hofstadter’s theory, I believe we have to analyze the relationship between
President Andrew Jackson and Nicholas Biddle, who at the time was the President of the Bank. Mr. Jackson was
very much a man of the middle class. He believed in the American dream of becoming an entrepreneur and the
opportunity to create wealth for oneself. He disliked the cheap and sometimes-worthless paper money the banks
printed. The only money he trusted was hard money, gold and silver. He was especially bitter against the Bank of
the United States, which with its monopoly of the government’s business was a symbol of all hated special privilege.
He thought it was evil as well as unconstitutional, and he loathed it. More impo!
rtantly though, he was a person who had experience using the so-called capital makers of the time and trying to start
businesses. For example, the one time in his career President Jackson owned land, which he sold to various
individual and received notes as payments. Unfortunately, these buyers were unable to pay back the notes and
President Jackson lost his land. He then had to start from scratch. He also had become a debtor and due to financial
hardships, he was unable to pay off his own debts. President Jackson was faced with a double-sided sword because
people were unable to repay the debts owed to him, while at the same time he could not pay the debts he owed to
others. Nicholas Biddle, on the other hand, was an entirely different man. Biddle knew how Jackson felt about the
Bank but wanted the President to be on good terms with it. Henry Clay, though, saw the Bank issue as a way to
defeat Jackson in the 1832 election. Clay induced Biddle to apply for a new charte!
r for the Bank early in 1832. He believed that if Jackson dared to veto the recharter bill, he would lose the election.
The plan did not go according for Mr. Clay and Mr. Biddle and Jackson was still the favorite among the people.
President Jackson and Nicholas Biddle were never met good terms with each other and their relationship was one of
argument and disagreement. In my opinion, Biddle wanted to keep the Bank of the United States intact for the sole
purpose of benefiting the aristocrats and the politically involved. Biddle was not, though, the cause of the Panic of
1837. The depression of the early 1840s was neither as serious as historians assume nor the fault of Biddle. It was
primarily a deflation, as opposed to a decline in production, and it was produced by events over which Biddle had
little control over.
Mr. Jackson’s view of banks was a very distressing one. He, along with the people of his party, believed the same
ideology that the banks were in favor of the wealthy and those with political advantage. The only people who
benefited from the banks were the “wall-street” types and people who had a rather great influence in the political
arena. I believe