1833
President Jackson appoints Roger B. Taney as Secretary of State for the Treasury, with instructions to start removing the government's deposits from the Second Bank of the United States. President Jackson's previous two Secretaries of State for the Treasury, William J. Duane and Louis McLane had both refused to comply with President Jackson's request and were fired as a result.However the head of the, Second Bank of the United States, Nicholas Biddle, used his influence to get the Senate to reject Roger B. Taney's nomination and even threatened to cause a depression if the Bank was not re-chartered. Biddle stated,
"This worthy President thinks that because he has scalped Indians and imprisoned judges, he is to have his way with the Bank. He is mistaken."
Biddle then went on to brazenly admit that the bank was intending to make money scarce in order to force the hand of Congress into re-chartering the bank. He stated,
"Nothing but widespread suffering will produce any effect on Congress ... Our only safety is pursuing a steady course of firm restriction - and I have no doubt that such a course will ultimately lead to restoration of the currency and re-charter of the Bank."
What Biddle has done with that statement is prove to the world what central banks were really about. He made good on his word, and the Second Bank of the United States, sharply contracted the money supply by calling in old loans and refusing to issue new ones. Naturally a financial panic ensued, followed by America being plunged into a deep depression.Biddle then unashamedly blamed President Jackson for the crash, claiming that it was Jackson's withdrawal of federal funds that had caused it. This crash plunged wages and prices, unemployment soared along with business bankruptcies. The United States was in uproar and newspaper editors blasted the President in editorials.
