As his term continued, Jackson truly grew a desire to crush the Second Bank of the United States. Over time he had decided that it could not continue as it was, and that it did not warrant reform. It must be destroyed. Jackson's reason for this conclusion was an amalgamation of his past financial problems, his views on states' rights, and his Tennessee roots. The Second Bank centralized financial might, jeopardizing economic stability; it served as a monopoly on fiscal policy, but it did not answer to anyone within the government. Above any principled concerns, however, the Bank became a political battle.
Congress chartered the Second Bank in 1816 for a twenty-year period, giving it thirty-five million dollars in startup funds. A board of twenty-five directors controlled the Bank, but only five were publicly appointed by the President–the rest came from stockholders. The directors controlled branches, invested funds, and oversaw operations. Over time, the Bank proved quite good at managing credit and providing profits for the stockholders and government–perhaps too good. In 1819, the Bank had caused a financial panic by calling in credit from smaller state banks, forcing many of them into bankruptcy. This Panic of 1819 led to such a depression that western regions of the country still suffered in the late 1820s.
By Jackson's administration, the Bank had expanded into twenty-nine branches and was doing roughly seventy million dollars of business a year, handling twenty percent of the nation's loans and monetary notes and one-third of all deposits. Perhaps more important, Jackson–who because of his previous election experiences remained wary of voting improprieties–thought that a bank with that much power could not remain independent of the electoral process. While the Bank in 1830 remained relatively clean and did not abuse its power, Jackson believed it was a disaster waiting to happen, and set out to shut it down.
When the Bank, led by Nicholas Biddle, realized Jackson's intentions, it began a public campaign to curry favor. Biddle announced that the Bank intended to pay off the national debt–another of Jackson's pet causes–by January 8, 1833, the eighteenth anniversary of the Battle of New Orleans, in Jackson's honor. The offer, of course, came with the caveat that the Bank would get a charter extension. Biddle also began to offer financial favors to Jackson's friends, in the meantime proving Jackson's belief that the Bank could play political games if necessary. Jackson did nothing and waited for the right moment to act. Biddle then surprised everyone by asking for a recharter in January of 1832–a Presidential election year–four years before the current charter expired. Biddle believed that by making the Bank an election issue, he could force Jackson to support it out of fear that it might cost him the election if he did not. Jackson figured otherwise.
The recharter bill came to the Senate floor in March, and it met with surprising support. Senator Thomas Hart Benton, a Democrat from Missouri who led Jackson's congressional opposition, scrambled to counter the support. Benton convened a House investigation that restated many of Jackson's complaints and publicized them in newspapers across the country. The effort was too little, however, and the recharter measure passed Congress by early July. When the bill arrived for Jackson's approval, he told Martin Van Buren, "The bankis trying to kill me, but I will kill it!" Jackson and his advisors carefully crafted a veto that would not anger the public and therefore would not cost the Democrats support in the fall election. Citing the stockholding of foreign citizens and the Constitutional questions the Bank's monopoly raised, Jackson ended with a stunning broadside to the Bank, arguing that its favoritism went against the role of a government that should stand for honesty, equality, and fairness. When Congress could not overturn the veto, the battle turned to the November polls.
The 1834 election developed into a battle between Henry Clay and John Sergeant of the National Republican party, Jackson and Van Buren in the Democratic party and–in the first third-party bid in American history–William Wirt and Amos Ellmaker from the Anti-Mason party. Clay latched onto the Bank issue, as it was one of the only weak spots in Jackson's presidency. The Democrats, meanwhile, shaped the campaign as one between the rich aristocratic Clay and the "everyman" worker Jackson. Jackson won handily in the Electoral College, defeating Clay 219 votes to 49. However, in the popular vote, Jackson's two opponents garnered 530,189 votes while Jackson won 687,502–hardly a strong mandate from the people. In fact, Jackson stands as the only president in history to be reelected by a smaller percentage of the vote than he won in the first election. The Bank issue had indeed cost Jackson dearly.