page_title: Bank War
section_title: Post-Eaton cabinet and compromise efforts
hierarchical_section_title: Bank War / Recharter / Post-Eaton cabinet and compromise efforts
caption_attribution_description: English: Engraved BEP portrait of U.S. Secretary of the Treasury Louis McLane
context_page_description: The Bank War refers to the political struggle that developed over the issue of rechartering the Second Bank of the United States during the presidency of Andrew Jackson. The affair resulted in the shutdown of the Bank and its replacement by state banks.
  The Second Bank of the United States was established as a private organization with a 20-year charter, having the exclusive right to conduct banking on a national scale. The goal behind the B.U.S. was to stabilize the American economy by establishing a uniform currency and strengthening the federal government. Supporters of the Bank regarded it as a stabilizing force in the economy due to its ability to smooth out variations in prices and trade, extend credit, supply the nation with a sound and uniform currency, provide fiscal services for the treasury department, facilitate long-distance trade, and prevent inflation by regulating the lending practices of state banks.
context_section_description: After replacing most of his original cabinet members, Jackson included two Bank-friendly executives in his new official cabinet: Secretary of State Edward Livingston of Louisiana and Secretary of the Treasury Louis McLane of Delaware.
  McLane, a confidant of Biddle, impressed Jackson as a forthright and principled moderate on Bank policy. Jackson called their disagreements an "honest difference of opinion" and appreciated McLane's "frankness". The Treasury Secretary's goal was to ensure that the B.U.S. survived Jackson’s presidency, even in a diminished condition. He secretly worked with Biddle to create a reform package. The product presented to Jackson included provisions through which the federal government would reduce operations and fulfill one of Jackson's goals of paying down the national debt by March 1833. The debt added up to approximately $24 million, and McLane estimated that it could be paid off by applying $8 million through the sale of government stock in the Bank plus an additional $16 million in anticipated revenue. The liquidation of government stock would necessitate substantial changes to the Bank's charter, which Jackson supported. After the liquidation of the debt, future revenues could be applied to funding the military. Another part of McLane's reform package involved selling government lands and distributing the funds to states, a measure consistent with Jackson's overall belief in reducing the operations of the central government. With this accomplished, the administration would permit re-authorization of the central bank in 1836. In return, McLane asked that Jackson not mention the Bank in his annual address to Congress. Jackson enthusiastically accepted McLane's proposal, and McLane personally told Biddle about his success. Biddle stated that he would have preferred that Jackson, rather than remaining silent on the question of recharter, would have made a public statement declaring that recharter was a matter for Congress to decide. Nonetheless, he agreed to the overall plan.
  These reforms required a rapprochement between Jackson and Biddle on the matter of recharter, with McLane and Livingston acting as liaisons. The President insisted that no bill arise in Congress for recharter in the lead up to his reelection campaign in 1832, a request to which Biddle assented. Jackson viewed the issue as a political liability—recharter would easily pass both Houses with simple majorities—and as such, would confront him with the dilemma of approving or disapproving the legislation ahead of his reelection. A delay would obviate these risks. Jackson remained unconvinced of the Bank's constitutionality.
caption: Secretary of the Treasury Louis McLane
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