What happened after Congress renewed the charter for
the Bank of the United States?
(1 point)
O The Supreme Court ruled the bank was
unconstitutional.
President Andrew Jackson vetoed the bill.
States closed their branches.
There was a run on local banks.
The correct answer is: President Andrew Jackson vetoed the bill.
Andrew Jackson in July 1832 vetoed the bill for the renewal of the charter bank system as he did not favor a strong centralized form of government and did not want the government to supervise banks as well.
He argued that the charter bank system was biased because banks were having monopolistic power and transferred funds in and out of the country easily.
The bank powers led to a rise in their stock prices and profited shareholders who were majorly wealthy Americans or foreigners.
Therefore, Jackson vetoed the renewal of charter banks.
To answer this question, we need to understand the context of the Bank of the United States and its charter. The Bank of the United States was established in 1791 to serve as the country's central bank and manage its finances. Its initial charter expired in 1811, but it was later rechartered in 1816.
After Congress renewed the charter for the Bank of the United States, several events took place:
1. The Supreme Court ruled the bank was unconstitutional:
- In the landmark case of McCulloch v. Maryland (1819), the Supreme Court ruled that the establishment of the Bank of the United States was indeed constitutional. This decision solidified the bank's legal status and affirmed its role in the country's financial system.
2. President Andrew Jackson vetoed the bill:
- When the bank's charter came up for renewal again in 1832, President Andrew Jackson vetoed the bill. Jackson, a critic of the bank, argued that it concentrated too much power in the hands of a few wealthy elites and was not in the best interest of the common people. His veto reflected a growing sentiment against the bank and de facto led to its eventual demise.
3. States closed their branches:
- Following President Jackson's veto and his subsequent reelection, many states, particularly those aligned with Jackson's Democratic Party, began to withdraw their support for the Bank of the United States. Eventually, several states closed the bank's branches within their jurisdictions, reducing its influence and reach.
4. There was a run on local banks:
- As confidence in the Bank of the United States waned, many saw it as a sign to withdraw their deposits and move their funds to local banks instead. This sparked a "run" on local banks, as people sought to safeguard their money. This phenomenon strained the stability of these smaller banks, contributing to a period of financial instability.
In summary, after Congress renewed the charter for the Bank of the United States, the bank faced significant challenges, including President Jackson's opposition, state closures of its branches, and a run on local banks. Eventually, these factors led to the bank's decline and eventual demise.