CHAPTER 12 • SECTION 3
CONNECT
Economics and History
THE BUSINESS CYCLE
CONNECT
The pattern of ups and downs in the economy is called the business cycle.
Economics and History
THE BUSINESS CYCLE Economists track
patterns in business in order to make more
accurate predictions about future activities.
Why would analysts be interested in future
activities? (Possible Answers: to prepare for
a potential recession; to determine if it’s safe
to invest money now without losing it later)
Peak Consumer spending,
employment, and business
production are at a high.
CRITICAL THINKING ANSWER
Draw Conclusions When consumers
spend less money, businesses and
manufacturing decline; when consumer
spending is higher, businesses order more
goods, and manufacturing increases.
Recession Consumers spend less.
Businesses lay off workers and cut
spending. Profits decline. A severe
and extended recession is called a
depression.
Unit 5 Resource Book
• Economics in History, p. 28
Expansion Businesses
increase production and hire
more workers. Consumers
spend more.
Low Point Consumer spending,
employment, and business
production are at a low.
CRITICAL THINKING
Draw Conclusions In what ways can the amount people spend affect businesses?
More About . . .
The 1832 Presidential Election
Jackson won reelection in 1832 with 55
percent of the popular vote while his
leading opponent, Henry Clay, received just
42.4 percent. However, with the electoral
voting system in place, Jackson’s victory
was even more dramatic. Jackson received
219 electoral votes to just 49 votes in favor
of Clay. As in the 1828 election, Jackson’s
enormous popularity won over citizens in
New York, Pennsylvania, and nearly every
Southern state.
Jackson’s War on the Bank When Congress voted to renew the charter,
Jackson vetoed the renewal. Although the Supreme Court had ruled that
the bank was constitutional, Jackson argued that it was not. He said it was a
monopoly that favored the few at the expense of the many.
The bank became the main issue in the presidential campaign of 1832.
The National Republican candidate, Henry Clay, called Jackson a tyrant. The
Democrats portrayed Jackson as a defender of the people. When he won
reelection, Jackson took it as a sign of approval for his war on the bank.
Jackson set out to destroy the bank before its charter ended. He had
government funds deposited in state banks. Biddle fought back by making
it harder for people to borrow money. He hoped the resulting economic
troubles would force Jackson to return government deposits to his bank.
Instead, the people supported Jackson. Eventually the bank went out of business. Jackson had won the war, but the economy would suffer for it.
410 Chapter 12
INTERDISCIPLINARY ACTIVITIES
CONNECT
to Music
Create and Perform
Campaign Jingles
Have students work in small groups to come
up with campaign jingles for both presidential
candidates in the 1832 election. Jingles should
be brief, yet should reflect each candidate’s
beliefs about the national bank. Jingles should
also mention which party each candidate
represents. Remind students that jingles should
be simple and catchy. Allow time for students
to practice performing their jingles. Then have
each group perform their jingles for the rest of
the class.
410 • Chapter 12
CONNECT
to Language Arts
Create a Cause-and-Effect Chain
As a class, review the “Connecting Economics
& History” feature on p. 410. Answer any
questions students might have about the
business cycle. Then have students create a
cause-and-effect chain on the board. Have
volunteers take turns drawing boxes with arrows
in between them. Within the boxes, students
should paraphrase each step of the business
cycle. Finally, have students quiz each other by
asking questions about the business cycle.
CHAPTER 12 • SECTION 3
Prosperity to Panic Because Jackson’s state banks made it easier to borrow
money, many people took out loans. The economy boomed. But the banks
issued too much paper money, and the rise in the money supply made each
dollar worth less. Inflation, or an increase in prices and a decrease in the value
of money, was the outcome. To fight inflation, Jackson issued an order that
required people to pay in gold or silver for public lands.
Jackson left office proud of the nation’s prosperity. But it was puffed-up
prosperity. Like a balloon, it had little substance. Jackson’s popularity helped
Van Buren win the presidency in 1836. A few months after Van Buren took
office, a panic, or widespread fear about the state of the economy, spread
1837.
throughout the country. It became known as the Panic of 1837
People began exchanging paper money for gold and silver. Banks quickly
depression, or severe economic slump, followed.
ran out of gold and silver. A depression
Almost all factories in the East closed. Jobless workers had no way to buy
food or pay rent. People went hungry and became homeless.
More About . . .
The Panic of 1837
Effects of the Panic of 1837 lasted well into
the 1840s. Van Buren took little action to
stabilize the economy, believing that the
power of the federal government should be
limited. As years of depression passed by
with no help in sight, even close friends of
Van Buren began to doubt the president’s
ability to resolve the issue.
SUMMARIZE Explain how Jackson destroyed the national bank.
Answer: by vetoing its charter and having government funds
deposited in state banks
CONNECT
Analysts called for the creation of a new
national bank to help manage the economy,
but Van Buren refused. He authorized the
movement of federal money from state
banks into a national treasury, but this
did not improve the economy. By the time
Congress passed an independent treasury
bill in 1840, the economy had finally begun
to recover.
to the Essential Question
What impact did Andrew Jackson’s presidency
have on the nation?
EVENT
IMPACT
Election of 1828
Voting rights expand; Jackson’s win
hailed as victory for the common people
Tariff of Abominations
Sectional tensions grow over tariffs and states’
rights; Jackson opposes nullification; South
Carolina nullifies tariffs and threatens to secede
Indian Removal Act
of 1830
Thousands of Native Americans are removed
from their homeland; Cherokees suffer on the
Trail of Tears
Bank War
Jackson drives the Second Bank out of business;
inflation rises
Election of 1836
Jackson’s popularity and the nation’s prosperity
help Vice-President Van Buren win the presidency
CONNECT
What impact did Andrew Jackson’s
presidency have on the nation?
Ask students what they have learned so far
that can help them answer this question.
Use the graphic on this page or display the
transparency:
Unit 5 Resource Book
• Essential Question Graphic, TT5
When answering this question, students
might mention:
CRITICAL THINKING
1. Form and Support Opinions What do you think was the most important issue in Jackson’s
presidency? Why?
• Jackson forced the national bank to close,
which caused inflation.
2. Evaluate In what ways did Jackson continue to affect politics after his presidency had ended?
The Age of Jackson 411
DIFFERENTIATING INSTRUCTION: TIERED ACTIVITIES
OBJECTIVE Write a letter to the editor that discusses the bank crisis and the depression
that followed. The letter should be from the viewpoint of someone who lived at the time.
Basic
On Level
Using information from
Section 3, students create
an annotated time line of at
least four events that led to
the depression that followed
the Panic of 1837. Students
incorporate that information
into a letter to the editor
written by someone living
either in the South, North,
or West.
Using information from the
chapter, have students write
a letter to the editor that
discusses the major events
and personalities that led
to the depression following
the Panic of 1837. The writer
should give examples of how
the depression has affected
his or her life.
to the Essential Question
Challenge
Using information from the
chapter, reference books,
and the Internet, students
write a letter to the editor
that gives more details on
the battle between Jackson
and Biddle over the bank.
The writer should give his
or her opinion on who, if
anyone, is to blame for the
depression that followed.
• Inflation led to the Panic of 1837, which in
turn caused a depression.
• The Whig Party was formed in hopes
of displacing Jackson’s successor, Van
Buren, with a president who would better
represent the will of the people.
CRITICAL THINKING ANSWER
1. Form and Support Opinions
Possible Answer: expanding voting
rights, because that issue affected all
future elections
2. Evaluate Jackson’s policies had
long-term effects on the economy,
Native American life, and political
parties, and the American concept of
democracy.
Teacher’s Edition • 411
CHAPTER 12 • SECTION 3
The Birth of the Whigs
KEY QUESTION In what ways did the Whig Party differ from the
Democrats?
Van Buren faced a new political party in his campaign for reelection
in 1840. The Whig Party had been formed by Henry Clay, Daniel
Webster, and other Jackson opponents. It was named after a British
party that opposed royal power. The Whigs opposed the concentration of power in the chief executive—whom they mockingly called
“King Andrew” Jackson.
Teach
The Birth of the Whigs
Think, Pair, Share
• Why was Jackson nicknamed “King Andrew”?
(Whigs felt he wanted too much power.)
• Sequence Events List these presidents in
the order they served: William Henry Harrison,
Andrew Jackson, John Tyler, Martin Van Buren.
(Jackson, Van Buren, Harrison, Tyler)
Unit 5 Resource Book
• Skillbuilder Practice, p. 27
• Interdisciplinary Projects, pp. 31–32
4
Assess & Reteach
Assess Have students complete the Section
Assessment.
This 1840 campaign
banner shows a log
cabin as a symbol of
the frontier. The banner
describes Harrison as
“The Ohio Farmer”
to set him apart from
his wealthy opponent,
Van Buren.
Answer: Whigs believed
Congress should
have more power in
government.
Political Beliefs The Whigs believed that Congress, not the president, represented the will of the people. They also blamed Van Buren for not
doing more to help the economy during the panic. In 1840 the Whigs chose
William Henry Harrison of Ohio as a candidate for president and John Tyler as
his running mate.
The Election of 1840 The Whigs nominated Harrison, the hero of Tippecanoe and the War of 1812, because of his military record and his lack of
strong political views. During the campaign, the Whigs emphasized personalities rather than political issues. They portrayed Harrison as a Western
farmer against the wealthy Van Buren. Harrison won the election but he died
shortly after his inauguration, and John Tyler became president. The election
of 1840 showed the importance of the West in American politics.
COMPARE AND CONTRAST Describe how the Whigs differed from the
Democrats.
ONLINE QUIZ
3
Unit 5 Resource Book
• Section Quiz, p. 29
Section Assessment
For test practice, go to
Interactive Review @ ClassZone.com
TERMS & NAMES
1. Explain the significance of
• Martin Van Buren
• Whig Party
• Panic of 1837
• William Henry Harrison
• depression
• John Tyler
Interactive Review
@ ClassZone.com
Power Presentations
KEY IDEAS
3. Why was Jackson against the Second Bank of the
United States?
4. What was Nicholas Biddle’s role in the bank war?
CRITICAL THINKING
5. Causes and Effects What role did Jackson’s
popularity play in the elections of 1836 and 1840?
USING YOUR READING NOTES
2. Sequence Events Complete the diagram to show
the major events of this section.
Test Generator
Reteach Have pairs of students create a time
line showing Jackson’s attack on the national
bank and three effects caused by the bank’s
closure.
Connect to Today The percentage of
eligible voters who participate in elections today
is much lower than it was during Jackson’s time.
In what ways do you think this influences
elections today?
7. Art Campaign Poster Create a campaign
poster representing either the Whig Party or the
Democrats in the election of 1840.
6.
1832 Jackson
vetoes bank’s
charter.
Unit 5 Resource Book
• Reteaching Activity, p. 32
Unit 5 Transparency Book
• Cause-and-Effect Chapter Summary, TT4
412 Chapter 12
SECTION 3 ASSESSMENT ANSWERS
Terms & Names
1. Martin Van Buren, p. 409; Panic of 1837, p.
411; depression, p. 411; Whig Party, p. 412;
William Henry Harrison, p. 412; John Tyler, p.
412
Using Your Reading Notes
2. Events—Bank goes out of business, causing
inflation; Panic of 1837 leads to an economic
depression; depression, p. 411; Whig Party
forms; Harrison wins the 1840 election.
Key Ideas
3. He felt it was a monopoly that favored the few
(the wealthy) at the expense of the many.
4. As bank president, he made it harder for
people to borrow money.
412 • Chapter 12
Critical Thinking
5. Van Buren won the 1836 election because of
Jackson’s popularity, not for his own political
beliefs; Van Buren lost the 1840 election
because Jackson had lost popularity.
6. Candidates may have to think up ways to
motivate voters to come out; candidates may
have to emphasize their personalities to attract
voters; candidates may have to appeal to
special interest groups who are already likely
to vote.
7. Posters should be creative, attractive,
persuasive; should incorporate campaign
claims of the Whig Party or Democrats.
Poster Rubric
Content
Historical
Accuracy
4
addresses all important
points; creative, artistically
attractive, and persuasive
no errors
3
addresses most important
points; creative, persuasive
few/minor
errors
2
addresses few important
several errors
points; somewhat persuasive
1
addresses no important
points; ineffective
many errors