Name______Page______
United States History
Chapter 12
Section 4: Prosperity and Panic (pages 368 – 371)
1. The Second Bank of the United States was the most powerful bank in the country because it held __government bonds__ and issued __money_. Also, its president, set policies that controlled the _nation’s money supply___.
2. Jackson had many reasons to dislike the bank. They were:
1)distrust of banks after losing money in financial deals
2)thought the bank had too much power
3)they could influence Congress because they made loans to members of Congress
4)bank policies favored wealthy clients and hurt the average person
3. Why did Nicholas Biddle asked Congress to renew the bank’s charter in 1832 rather than when it expired in 1836? It was an election year, and he thought Jackson would not risk angering its supporters.
4. Congress voted to renew the bank’s charter but Jacksonvetoed it saying, the bank was a monopoly that favored a few. Even though the _Supreme Court had ruled the bank was constitutional, Jackson claimed officials could judge the _constitutionality of a law for themselves.
5. Jackson’s war on the bank was the main issue in the Election of 1832. _Henry Clay, the candidate of the national Republican Party, called Jackson a tyrant. The Democrats said he was a defender of the people.
6. Jackson set out to destroy the bank by depositing _government funds in state banks. Biddle fought back by making it harder for people to borrow money.
7. Jackson’s last years in office were a time of prosperity because many people took out loans to buy___public lands___. Banks issued too much __paper money_ which increased the money supply. This made each _each dollar__ worth less.
8. As a result, __inflation__ occurred which is an increase in prices and decrease in the _value of money. To fight inflation, Jackson ordered people to pay in __gold or silver__ for public lands.
9. Shortly after __Martin van Buren_ was elected president, a widespread fear about the economy spread through out the country. It was known as the _panic_.
10. The panic resulted when people took their paper money to the banks and demanded_gold_ or silver in exchange. The government also tried to get its money from the banks. When the banks were unable to pay, they _defaulted or went out of business. This resulted in a __depression____, or severe economic slump.
11. Because people had little money, they were unable to buy things which caused factories to close. When the factories closed, people lost their incomes. Without income they were unable to buy food or pay rent. Many were hungry and homeless.
12. During the depression, Senators_Henry Clay_ and _Daniel Webster_ argued that the government should help the economy. President Van Buren_ disagreed believing the economy would improve if it was left alone.
13. The Whigs, a new political party, formed by Clay, Webster, and other Jackson opponents. It was named after a British party that opposed royal power. The Whigs opposed the concentration of power in the _chief executive_.
14. The Whigs nominated __William Henry Harrison for president and John Tyler
as vice president. Although Harrison was born in Virginia, he had settled on a farm in Ohio_. He was portrayed as a true Westerner with symbols of the frontier such as a _log cabin_.
15. A month after he took office Harrison_ was the first president to die in office – he died of pneumonia. Vice President Tyler, the Vice-President then became president.
True or False
True16. The Second Bank of the U.S. was the most powerful bank in the country.
False 17. Jackson disliked the bank because he believed that its interest rates were too low.
True 18. When Jackson vetoed the bill to renew the bank’s charter, he claimed that the bank was unconstitutional.
False 19. Jackson ordered all government money withdrawn from state banks and put into the national bank.
True 20. Inflation is a significant rise in prices.
False 21. The nation continued to prosper after Martin Van Buren was elected president.
False 22. Fortunately, banks had enough gold and silver during the depression to exchange for paper money.
True 23. The Whig party supported less government interference in the nation’s economy.
True 24. Harrison was the first Whig elected president.