American System

BANK WAR Battle between President Andrew Jackson and congressional supporters of the Bank of the United States over the bank's renewal. Jackson vetoed the bank bill, arguing that the bank favored moneyed interests at the expense of western farmers. COMPROMISE TARIFF OF 1833 Passed as a measure to resolve the Nullification Crisis, it provided that tariffs be lowered gradually, over a period of ten years, to 1816 levels. PANIC OF 1837 Economic crisis triggered by bank failures, elevated grain prices, and Andrew Jackson's efforts to curb overspeculation on western lands and transportation improvements. In response, President Martin Van Buren proposed the "Divorce Bill," which pulled treasury funds out of the banking system altogether, contracting the credit supply. SAM HOUSTON