USA HISTORY

Detailed explanation-1: -The lack of a central bank to regulate fiscal matters, which President Andrew Jackson had ensured by not extending the charter of the Second Bank of the United States, was also key. This ailing economy of early 1837 led investors to panic – a bank run ensued – giving the crisis its name.

Detailed explanation-2: -The resulting high inflation, and Jackson policies favoring hard currency (gold or silver) led many investors to panic and many banks to close due to insufficient reserves, in a financial crisis known as the Panic of 1837.

Detailed explanation-3: -Jackson’s distrust of the Bank was also political, based on a belief that a federal institution such as the Bank trampled on states’ rights. In addition, he felt that the Bank put too much power in the hands of too few private citizens–power that could be used to the detriment of the government.

Detailed explanation-4: -Loose Lending by the Second Bank of the United States One cause of the Panic of 1819 was bank’s lending practices. Banks allowed too many banking notes and lines of credit to be released that were not backed by hard currency.

Detailed explanation-5: -President Andrew Jackson announces that the government will no longer use the Second Bank of the United States, the country’s national bank, on September 10, 1833. He then used his executive power to remove all federal funds from the bank, in the final salvo of what is referred to as the “Bank War."