The American System Part 4 Review Questions & Resources

Review Questions

How did a national bank support the American System?

Who first proposed the concept of a national bank?

What was the main reason Jefferson and Madison were against a national bank?

Why did Henry Clay vote against a recharter of the 1st Bank of the U.S. in 1811?

Why did Henry Clay think it was unconstitutional for the federal government to charter a private bank?

What happened to the nation’s currency after the War of 1812?

What two solutions were proposed to deal with the nation’s currency crises?

Which solution did the nation chose?

How did Henry Clay justify his reversal of opinion on the necessity of a national bank?

Does perceived necessity make an unconstitutional law constitutional?

Did the 2nd Bank of the U.S. keep 100% specie (gold or silver bullion) in reserve?

Were they required to?

When the “Bank” lent out more then it had in reserve what happen to the money supply?

What happened when the money supply was inflated?

In order to stop inflation what did the “Bank” do?

What was the result of the “Banks” sudden deflation?

What was the name of the Supreme Court case that said the federal government can charter a private bank and is immune from state taxation?

Why would a state want to tax a national bank? Could a state tax a state chartered bank?

Would a state consider a federally chartered national bank a threat to its state chartered banks?

Why did the state of Ohio believe it did not have to comply with the Supreme Court decision in McCulloch v. Maryland?

What is the contemporary view on the authority of Supreme Court decisions?

Describe the monetary policy of the Jacksonians.

What early British economist did the Jacksonians emulate?

What did David Ricardo discover about inflation when the Bank of England did not hold 100% reserves?

Describe the Democratic Party’s monetary policy in 1830.

What were Andrew Jackson’s criticisms of the 2nd Bank of the U.S. in his First Annual Speech?

What was Jackson’s opinion of a Supreme Court decision as stated in his veto speech of the 2nd Bank of the U.S.?

In Andrew Jackson’s opinion how much authority did a Supreme Court decision have over the president, congress or the states?

What was the eventual fate of the 2nd Bank of the U.S.?

How long would it be before the nation had another central bank?

Is a national bank necessary for the nation’s existence?

 

Resources

Andrew Jackson, First Annual Message to Congress (1829) 

http://www.presidency.ucsb.edu/ws/index.php?pid=29471

Andrew Jackson, Veto Message of the Bill on the Bank of the United States (1832)

http://teachingamericanhistory.org/library/index.asp?document=64

Henry Clay, On renewing the charter of the first Bank of the United States (1811)

http://lcweb2.loc.gov/cgibin/ampage?collId=llac&fileName=022/llac022.db&recNum=102

Henry Clay, On President Jackson’s Veto Of The Bank Bill (1832)

http://eweb.furman.edu/~benson/docs/clay.htm

Murray N. Rothbard, The Panic of 1819: Reactions and Policies

https://mises.org/rothbard/panic1819.pdf

Murray N. Rothbard, A History of Money and Banking in the United States

http://mises.org/books/historyofmoney.pdf

Murray N. Rothbard, The Mystery of Banking (An excellent treatise on fractional reserve banking) 

http://mises.org/Books/mysteryofbanking.pdf

Clarence B. Carson, A Basic History of the United States (Vol.2): the Beginning of the Republic 1775-1825 

A Basic History of the United States (Vol.2): the Beginning of the Republic 1775-1825

Clarence B. Carson, A Basic History of the United States (Vol.3): the Sections and the Civil War 1826-1877

A Basic History of the United States (Vol.3): the Sections and the Civil War 1826-1877