In a paragraph, explain why President James Madison authorized the Second Bank of the United States. What problem was he trying to solve? What problems did this bill create?
Answers
Answer: In the years leading up to the War of 1812, the US economy had been on the upswing. The war with Britain, however, disrupted foreign trade. As one of the United States’ largest trading partners, Britain used its navy to blockade US trade with other nations. The war prevented US farmers and manufacturers from exporting merchandise, blocked US merchants and fisherman from sailing the high seas, and curtailed federal government revenues, which were derived mainly from tariffs on trade. By 1815, the United States found itself heavily in debt, much like it had been at the end of the Revolutionary War thirty years earlier.
In January 1815, the United States had been without a national bank for almost four years. Many people thought that a successor would again provide relief for the country’s ailing economy and help in paying its war debt. Six men figured prominently in establishing this new entity, commonly referred to as the second Bank of the United States: the financiers John Jacob Astor, David Parish, Stephen Girard, and Jacob Barker; Alexander Dallas, who would become secretary of the Treasury in 1814; and Rep. John C. Calhoun of South Carolina. These men thought that reestablishing a national bank would solve some of the country’s economic woes. In particular, Astor, Parish, Girard, and Barker – as lenders and financiers -- felt that a national bank would restore a stable currency, thereby avoiding bouts of inflation and insuring their business interests.
Establishing a Second National Bank
Despite broad support for reestablishing a national bank, the road to re-creation was not smooth. In January 1814, Congress received a petition signed by 150 businessmen from New York City, urging the legislative body to create a second national bank. In February, and again in November, Calhoun put forth plans to create a bank that would be headquartered in the District of Columbia, but his bills did not pass.
In April 1814, President James Madison, who had opposed the creation of the first Bank of the United States in 1791, reluctantly admitted to the need for another national bank. He believed a bank was necessary to finance the war with Britain. But later that year, progress in peace negotiations led Madison to withdraw his support for the proposed national bank.
After peace with Britain came in 1815, Congress rejected new efforts to create the bank. In the months that followed, however, the federal government’s financial position deteriorated amid a broader economic downturn. Many state-chartered banks had stopped redeeming their notes, which convinced Madison and his advisers that the time had come to move the country toward a more uniform, stable paper currency. In his annual report, Dallas again called for the establishment of a national bank. After much debate and a couple of additional attempts, Madison finally signed in April 1816 an act establishing the second Bank of the United States.
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Explanation:
answer :
James Madison authorized second bank of US in 1816 with a charter for 20 year. The war of 1812 led to inflation,the trade between US and Britain was widely affected(Britain was the major trade partner of US,) lack of fiscal order,the issuance of notes from private banks , specie hoarding. Although congress rejected its formation after peace with Britain but then many state owned banks stopped redeeming their notes which convinced Madison .This bill created clash between president Jackson and bank president Biddle , for Andrew Jackson it was a threat to republic,for farmers it was meant for city people and for overseas interests.like the first one its charter was also not renewed .
P.S - James Madison was against first bank of US.