Tyler Signs New Charter for
Third Bank of the United States
by Jeff Provine
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On August 16th 1841,
the Bank of the United States had a troubled past. The First Bank had
begun in 1791 to aid in the central government of the young nation. Its
charter had run out in 1811, and Congress chose not to grant a new one.
Overall, the bank had done much good in loans to the growing country and
its citizens, but it had also served as a haven for speculators. In 1816,
the Second Bank gained a twenty-year charter, and it served much like the
first, keeping down inflation caused by the War of 1812.
National banks, however, were terribly unpopular with the Democrats and,
especially, Andrew Jackson. He and many others held that the bank was
built for the rich and offered no real aid to the poor, only taking its
money in taxation. While in office, Jackson worked to hobble the bank by
giving an executive order not to deposit government funds there. John
Tyler (pictured), a Whig, agreed with Jackson about banking policies
despite the rest of his party being staunch supporters of improving the
"Tyler was always more of a disaffected Jacksonian
Democrat than a true Whig" - reader's commentIn 1836, the Second
Bank's charter expired, and it was not renewed. Despite efforts of Whigs
and anti-Jacksonians, they could not override Jackson's veto during his
presidency. The Bank became private, surviving only five years. After the
Panic of 1837, Henry Clay and his Whig allies attempted a new charter, but
it became obvious that Tyler would be against it as he had already vetoed
much of the Whigs' agenda.
Swallowing his pride, Clay sat down with the president and the two talked
for more than seven hours, finally working out a plan for a new kind of
bank. Rather than a single national bank against the many state banks that
stood around the country, this bank would serve as a link between the
state and federal level, operating to moderate speculation but also supply
good loans to growing areas. There was not precedent for it in the
Constitution, but it could be enacted as a bill from Congress. At last,
"The pre-Civil War South would not have willingly
become "heavily industrialized." - reader's commentThe Third Bank
of the United States was given a twenty-year charter like the former two
and served with success. Scholars noted investment money from the South
flow northward and then back again, creating a tie between wealthy
Southerners and the growing industrial class in the North. With loans
available in the South during bad growing seasons, farmers were able to
float their harvests and maintain a booming agricultural environment. As
the crisis over slavery loomed, it was decided that the economy was strong
enough to put forth an effort to "buy out" the slaves from Southern
owners, a bill put forth by Democrat Senator Jefferson Davis of
Mississippi and signed by Republican Abraham Lincoln.
With a large available workforce and a system of loans, the South became
heavily industrialized through the later half of the nineteenth century.
It was estimated that the government made more than its money back through
taxation for purchasing freedom for the former slaves. With its titan
economy, the United States entered the world scene in the early days of
the twentieth century, which it would dominate despite dark days of a
southern communist rebellion in the 1930s.
says in reality, Tyler vetoed the bill. Henry Clay was not a man to
swallow his pride, and he began to make increasing political threats against
the president. At the veto, the most violent protest on the grounds of the
White House to this day took place as Whigs treated Tyler as a traitor.
After a second veto in September, Clay led Whigs in resigning from the
cabinet, which would cause Tyler great difficulty in replacing over the rest
of his administration. Clay even pushed the Whigs to remove Tyler from their
ranks formally. Still, Tyler did not waver.
Abandoned by the Whigs, Tyler turned to the Democrats. The increased party
politicking caused regional recognition to take over, making the South more
"Democrat" and the North more "Whig". Over the next two decades, the
regional separation would spark the Civil War, costing the lives of some
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