The Journal of Economic History


Rethinking the Jacksonian Economy: The Impact of the 1832 Bank Veto on Commercial Banking

a1 Associate Professor; Department of Economics; Old Mill; University of Vermont; Burlington, VT 05405. E-mail:


Revisiting an old debate between “traditional” historians and “New” economic historians about the short-run monetary effects of President Jackson's war on the Second Bank, I offer new arguments for the traditionalists. I develop a framework accounting for growth in commercial bank credit based on the “investment club” characteristics of antebellum state-chartered banking and apply it to state bank balance sheet data for 1830–1836. The removal of the Second Bank indeed magnified the boom in commercial banking, and the replacement of Second Bank branches with state-chartered banks as lenders and federal government depositories amplified the boom in frontier lands and state debt.