Banking Problems in 1834

Extract

The problems of banking which upset the business world of 1834 were inextricably bound up with politics. The second Bank of the United States had been incorporated in 1816 in order to aid the government in its financial operations and to check the overissue of notes by state banks. While the Bank was able to force state banks to resume specie payment as early as February, 1817, in doing so it made many lasting enemies. In following years the Bank, in turn, resented efforts on the part of various states to tax its branches, for one of the valued privileges of the Bank, as chartered, was exemption from taxation.