Final answer:
The Secret Service's founding purpose in 1865 was indeed to combat U.S. currency counterfeiting. The Panic of 1819 led to a decreased, not increased, public trust in the Second Bank of the United States. Andrew Jackson's administration later pushed toward hard money to stabilize the economy.
Step-by-step explanation:
The statement that the Secret Service was founded in 1865 to protect the U.S. financial system from the counterfeiting of U.S. national currency is true. Initially, the Secret Service's primary mission was to suppress counterfeit currency, which was a significant problem at that time. This step was crucial as it intended to restore stability to the nation's financial system following the Civil War. It wasn't until 1901, after the assassination of President William McKinley, that the Secret Service was also tasked with the protection of the president.
The Panic of 1819 is falsely claimed to have increased the American people's faith in the Second Bank of the United States. It was in fact the opposite; the panic was a financial crisis that adversely affected the public's perception of the Second Bank, leading to criticism over its practices and policies that were believed to have contributed to the economic distress. The Second Bank had been created to stabilize the banking system as there were numerous banks issuing their own paper money, which made financial transactions complex and unstable.
Years later, during President Andrew Jackson's term, there was a shift towards a hard money policy, which was favored by Jackson as a means to combat the boom-bust cycle associated with speculation and inflation due to paper currency. Jackson's administration passed the Coinage Act in 1835, which promoted the use of gold coins over paper money for commercial transactions, constraining the issuance of paper currency and demanding on-demand convertibility of paper notes to specie.