Daniel Webster And the War on the Second Bank of the United States
Webster's Early YearsDaniel Webster was born and raised in the turbulent yet patriotic days of our nation's founding. His father, Ebenezer Webster, was a Captain of a New Hampshire militia unit and fought at Dorchester Heights (Bunker Hill) and Bennington, Vermont. As a young boy, Daniel possessed a physical weakness that inclined him to studies and long walks in the countryside. Work on the father's farm was mainly done by Daniel's older brother, Ezekiel. A few years after the Revolutionary War, Daniel's father, Ebenezer, secured a position as a Lay Justice or Judge for the Court of Common Pleas. It was this money ($300 a year) that was used to start Daniel's education. Daniel attended school in Salisbury under a schoolmaster as a young lad. He was not a prodigy but was known for his quick wit and verbal ability. In his early teens, Daniel was enrolled in the Exeter Academy for boys to prepare him for the college entrance exams. In 1797, at the age of sixteen, Daniel Webster was admitted to Dartmouth College. He spent four years at Dartmouth and excelled in most subjects but had some trouble with Latin and Greek. He returned to Salisbury to study law. Daniel interrupted his law studies to teach school for a year in Fryeburg, Maine, so that his older brother, Ezekiel, could also attend Dartmouth. Daniel passed the Bar exam and was admitted to practice law in Suffolk County, New Hampshire in 1805. Daniel had a close relationship with his father and corresponded with him regularly. Many of the letters have been saved in The Papers of Daniel Webster: Correspondence – 3 Volumes. The following is a memorable quote from Daniel's father, Ebenezer: Daniel, in the long struggle with poverty and adverse fortune that your mother and I have made to give you and Ezekiel an education, we have often talked over these sacrifices, and the prospects of our children. Your mother has often said to me that she had no fear about Ezekiel; that he had fixed and steady habits, and an indomitable energy. But as for you she did not know. Either you would be something or nothing; she did not know which. I think. you have fulfilled her prophecy. You have come to nothing."  In May 1806, Daniel Webster defended Josiah Burnham who was charged with killing two of his companions in a Haverhill jail, by stabbing them with the broken end of a scythe. Webster's plea against capital punishment fell on deaf ears and Josiah Burnham was hanged on August 12, 1806.  In May 1807, a date that corresponds with the graduation of Ezekiel from Dartmouth, Daniel Webster moved his law practice to Portsmouth, New Hampshire. In the following year, Daniel married Grace Fletcher, a former schoolteacher from Salisbury. For nine years, Daniel and Grace lived in Portsmouth as Daniel became proficient in law, while two children were born to the happy couple. In political areas, Webster was a conservative and a Federalist. Webster's New England was deeply affected by Thomas Jefferson's embargo. In the election of 1808, New Hampshire, Massachusetts and Rhode Island voted against Jefferson's handpicked successor, James Madison. Webster, as a staunch Federalist, opposed the war of 1812. Webster gave one of his early speeches at a town gathering on the Fourth of July 1812. Two months later on August fifth, Webster wrote and delivered the "Rockingham Memorial"  that was published in the local newspapers and was sent to President James Madison. In November, 1812, the delegation to the US House of Representatives in New Hampshire increased from five members to six and Daniel Webster's name was put forward in a general election for this new slot. At the age of thirty-one, Daniel Webster was elected to represent New Hampshire as a Federalist in opposition to the war. In December 1813, Daniel Webster was en-route to Washington D.C. when disaster struck his hometown of Portsmouth. At seven-thirty at night, a fire broke out in a neighbor's barn and quickly spread to the town. Webster's uninsured house worth $6000 and his law library were consumed in the raging fire. "When the conflagration was checked, at about five o'clock on the following morning, fifteen acres lay in smoldering ruins, 272 buildings had been destroyed, including 108 dwelling houses and 64 stores and shops with a total loss of more than $300,000." Webster's shaky finances were wrecked with the fire. Shortly after the disaster, Daniel wrote, ".the safety of my family compensates (for) the loss of property."  One biographer wrote of Webster's constant money problems, "Of the frugality so often ascribed to the New England Yankee, neither Daniel Webster nor his father had the slightest trace. He went through Dartmouth on borrowed funds: he assumed his father's obligations, and paid them off; and when cash came in easily, it was spent as if the source were inexhaustible."  A contemporary solana town center Webster, Judge Jeremiah Smith wrote, "He does not know the value of money, and never will. No matter; he was born for something better than hoarding money-bags."
CongressmanDuring his first session as a Congressman, Webster embarrassed the Madison administration by requesting information pertaining to the revocation of the Berlin and Milan Decrees. The implication was that Madison had secretly hidden the diplomatic papers, which would have affected the voting on the declaration of War against Great Britain. Shortly thereafter, Speaker of the House, Henry Clay, removed Daniel Webster from his seat on the Committee of Foreign Relations. As a member of the opposition party, Webster approved of expenditures that increased our defenses but voted against what he called, "futile projects of invasion." In the winter session of 1814, Daniel Webster headed the opposition against the formation of a national, government-run bank. After the bill was defeated, John C. Calhoun came to Daniel Webster and pleaded for his help in framing a new act that would pass the Congress. Webster agreed and a new bill was drafted but President Madison vetoed the bill as unconstitutional. A year what is the second bank of the united states a third 'bank bill' was drafted with a larger capitalization of $35 million. Webster was opposed to this bill because of the subscription of stock by the government and the appointment of government directors but the bill passed and this time, it was signed by Madison's successor, President Monroe and became law. One of Webster's last votes in the House of Representatives was in favor of increasing the pay of Congressmen from six dollars a day plus mileage to $1500 a year. There was a great outcry from the public over this act of Congress and many members lost their seat, but by the next session, Daniel Webster had decided to move his family and law practice to Boston, Massachusetts and was thereby ineligible to run. Before he left Congress, Daniel Webster was challenged to a duel by John Randolph of Virginia but Daniel refused to meet him to account for "words of a general nature used in debate." As a Congressman and an attorney, Webster was admitted to practice law before the Supreme Court of the United States. In 1814, Webster was employed in two cases involving prizes of war. A year later in an appeal case from Vermont, Webster took a liberal interpretation of the Constitution and argued successfully against citizens of one state claiming land under grants from another state. The modest successes that Webster enjoyed in these cases no doubt stirred his ambition to build up a larger law practice. He would need to move to a larger city than Portsmouth, New Hampshire. The Constitutional Lawyer In August 1816, Webster moved his family and law practice to Boston. It was not long before Webster was placed among the best attorneys in the country. "That Mr. Webster was the foremost American lawyer of his time," declared Senator George F Hoar, "as well in the capacity to conduct jury trials as to argue questions of the law before the full court, will not, I think, be seriously questioned by anyone who has read the reports what is the second bank of the united states his legal arguments or has studied the history of his encounters before juries with antagonists like Choate or Pinkney." In one famous criminal case of its day, Daniel Webster defended two brothers accused of shooting a man and stealing his wagon full of supplies. Webster's cross-examination of the man who was shot revealed inconsistencies in his earlier testimony, thus, proving to the jury that the injured man actually shot himself accidentally while faking the robbery to "avoid his obligations or perhaps also for a passion for notoriety." In 1818, Daniel Webster argued the most famous case of his career before the United States Supreme Court. In Dartmouth College v. Woodward, the New Hampshire State Legislature tried to circumvent the original colonial charter that established Dartmouth College back in 1769. In his closing remarks before the Court, Daniel Webster said, "Sir, you may destroy this little institution; it is weak; it is in your hands! You may put it out; but if you do, you must carry on your work! You must extinguish one after another, all those great lights of science, which, for more than a century, have thrown their radiance over the land. It is, sir, as I have said a small college, --and yet there are those who love it.". Webster was able to guide the court through the difficult political, religious and economic issues and to prove to Chief Justice John Marshall et al, that Connecticut had violated that section of the U.S. Constitution that states, "no State. shall pass any bill of attainer, ex post facto law, or law impairing the obligation of contracts." In referring to the Dartmouth case, Henry Cabot Lodge wrote "It has been cited over a thousand times in subsequent litigation and has extended the jurisdiction of the highest federal court more than any other judgement rendered by them."  Only three weeks after the decision was handed down in the Dartmouth case, Daniel Webster was back in the Supreme Court as junior counsel in another famous case, McCullough v. Maryland. The issues surrounding this case have some significance in examining Webster's motives ten years later in defending the Bank against Andrew Jackson's onslaught. When the Second Bank of the United States had been chartered in 1816, a branch was opened in Baltimore, Maryland. One of the special features of the Bank of the United Sates (B.U.S.) was the ability to demand payment in specie (hard currency) for bank notes derived from lesser State banks. This advantage by the B.U.S. caused resentment and in general, a curtailment of credit because the lesser banks had to keep specie on hand in case the B.U.S. decided to cash in its notes. (Similar to what the Federal Reserve does today.) The State banks in Maryland induced the Maryland Legislature to pass an act taxing all banks not chartered by the State thereby driving the B.U.S. out of State. A lawsuit worked its way up through the Maryland Appeals Court and was now in the hands of Daniel Webster and Co-counsel William Pinkney. The argument in McCullough v. Maryland covered nine full days. The questions before the Court were: 1) Does Congress have the right to charter a 'National Bank'? and 2) Can a State Legislature tax an institution created by Congress? Daniel Webster spoke for most of the first day of testimony and reminded the Court that, "an unlimited power to tax involves, necessarily, the power to destroy." After the trial, Chief Justice John Marshall took only how to remove credit card from amazon account days to hand down one of his longest opinions ever written. Marshall had probably written a preliminary draft of his opinion before the trial in early winter. Marshall in essence wrote that yes, Congress does have the right to charter a bank and no, an individual State does not have the power to tax and thus 'destroy' an institution created by Congress. In 1824, Daniel Webster tried his third landmark Supreme Court case; Gibbons v. Ogden or more commonly called the 'Steamboat case'. The suit was brought about by Thomas Gibbons who started a steamboat line from Elizabethtown, New Jersey into New York City. Gibbons was opposed by powerful interests in New York. Robert Fulton, Robert Livingston and Aaron Ogden shared the monopoly of steamboat traffic in New York waters. Ogden had purchased the right to operate from New Jersey but Gibbons refused to do so. The question before the Court was: Did New York laws granting a monopoly of steamboat traffic violate that section of the U.S. Constitution that leaves to Congress the power 'to regulate commerce among the several states?" Daniel Webster spoke for two and one-half hours on behalf of his client, Thomas Gibbons. Some report that his eloquence and his force of argument were never better. After a short postponement, Justice Marshall returned with the opinion that " the acts of New York must yield to the laws of Congress."
The Great OratorIn 1820, on the 200th anniversary of the arrival of the Mayflower, Daniel Webster was asked to be the chief speaker for a day of ceremonies to be held in Plymouth, forty miles southeast of Boston. His passion for speaking, his skills as an orator and his profound convictions were long remembered by New Englanders. "Beginning simply, he touched briefly on the momentous nature of the anniversary, analyzed the motives which drove the Pilgrims to our shores, described the history and character of the early settlements, dwelt at some length on the government and society of our country. .emphasized the importance of free schools, denounced the African slave trade, called attention to the religious character of our origin https www fidelity 401k com concluded with a greeting to future generations." Webster must have deemed this oration as one of his very best because he placed it first in a later published book on all of his important speeches. In 1825, Webster was again invited to speak at the fiftieth anniversary of the battle of Bunker Hill. The Marquis de Lafayette would attend, as would fifty or more veterans from the Revolution. While his audience in Plymouth was only about fifteen hundred, his 'Bunker Hill' speech drew a crowd of over twenty thousand. It is primarily this speech that generations of New Englanders memorized and recited verbatim: We come as Americans to mark a spot, which must forever be dear to us and our posterity. We wish that whosoever, in all coming time, shall turn his eye hither, may behold that the place is not undistinguished where the first great battle of the Revolution was fought. One year later, Mr. Webster was once more on the podium eulogizing the deaths of two great Presidents: John Adams and Thomas Jefferson who both died on the same day, July 4th, 1826, exactly fifty years after the signing of the Declaration of Independence.
Continued on next page »1 Fuess, Daniel Webster, 7-11. Ebenezer Webster's Revolutionary War Record. There is an anecdote of a supposed quote from Gen. Washington after a brief mutiny of New Jersey and Pennsylvania troops and how glad the General was to have Captain Webster's men guarding him! 2 McMaster, Daniel Webster, 11. "$300 a year as Lay Justice of the Court of Common Pleas." 3 Fuess, D.W., 84. Admitted to the Bar in Suffolk County in 1805. 4 The Correspondence of Daniel Webster Vol. 1, 37. Father's quote: "You have come to nothing." 5 Fuess, D.W., 89. Josiah Burnham hanged on August 12, 1806. 6 Fuess, D.W., 95. Rockingham Memorial sent to Pres. Madison in opposition to the War. 7 McMaster, D.W., 89. Quote about the fire in Portsmouth. 8 Correspondence of Daniel Webster Vol. 1, 145. Quote from D.W. "the safety of my family compensates (for) the loss of property. 9 Fuess, D.W., 118. Quote from Fuess on frugality of Yankees. 10 Lewis, Speak for Yourself, Daniel, 37. Quote from Judge and later Governor Smith on "he was born for more than hoarding money bags." 11 Fuess, D.W., 162. D.W.- "futile projects of invasion." 12 Current, D.W. and the Rise of National Conservatism, 18. Third 'bank' bill signed by Monroe. 13 Fuess, D. W., 189. Quote for why Webster turned down Randolph duel. 14 Baxter, One and Inseparable- D.W and the Union., 128. Quote from Sen. Hoar on Webster as the best lawyer in the country. 15 Fuess, D.W., 212. Facts relating to the case of the two brothers accused what is the second bank of the united states hijacking. 16 Fuess, D.W., 231. Dartmouth College Quote "there are those who love it" 17 Fuess, D.W., 224. U.S. Constitution- ".expost facto law, or law impairing the obligation of contracts." 18 Henry Cabot Lodge, Daniel Webster, 96. Dartmouth College Case.'cited over a thousand times in subsequent legislation." 19 Fuess, Daniel Webster, 250. pets at home vets near me power to destroy" quote 20 Beveridge, Marshall, IV, 290. Marshall wrote a draft of opinion before trial! 21 U.S. Constitution. "to regulate commerce among the several states." 22 Beveridge, Marshall, IV, 429. Gibbons v Ogden - "the acts of New York must yield to Congress" 23 Fuess, D.W., 289-290. Summary of the Plymouth oration. 24 Benson, Daniel Webster, 159. Quote from the 'Bunker Hill' speech. 25 Wiltse, ed., The Papers of Daniel Webster-Correspondence Vol. 2, 83, 144, 157. Letters to and from Biddle. 26 Current, Daniel Webster and the Rise of National Conservatism, 76. Biddle refused loan to National Intelligencer. 27 Wilburn, Jean Alexander, Biddle's Bank, 5. Reasons why Biddle chose 1832 vote. 28 Current, D.W., 77. Massachusetts banks in good shape. 29 Watson, Liberty and Power, 143. Quote from Jackson 'The bank is trying to kill me.' 30 Remini, Andrew Jackson and the Bank War, 158. Quote on Jackson's veto message. 31 Wilburn, Biddle's Bank,7. Van Buren's loss of the Court of St. James 32 Hammond, Banks and Politics, 369. Early Jacksonian policy — 'spoils of victory'. 33 Hammond, Banks and Politics in America, 371. Letter to Sen. Felix Grundy — "a wholly new 'national' bank. 34 Hammond, Banks and Politics, 374. Not true-1826 to 1832 'high water mark for a sound currency'. 35 Current, D.W. and the Rise of National Conservatism, 77. Quote from Webster after the bank veto. 36 Current, D.W., 79. Quote from the Louisville Journal on Webster. 37 Current, D.W., 81. Letter to Biddle requesting retainer. 38 Watson, Liberty and Power, 158. Memorials demand restoration of Bank deposits. 39 Watson, Liberty, 159. Origin of the party name 'Whigs". 40 Lodge, Daniel Webster, 208-209. Quote from Lodge on formation of Whigs. 41 Watson, Liberty, 159. 347 new State banks chartered. 42 Current, D.W., 86. New recharter bill for B.U.S.
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Second Bank of the United States
This article is about the early 19th-century federal institution. It is not to be confused with the First Bank of the United States, the early 20th-century corporation the Bank of the United States, or the modern corporation Bank of America.
National bank in Philadelphia, Pennsylvania (1816–41)
The Second Bank of the United States was the second federally authorized Hamiltoniannational bank in the United States. Located in Philadelphia, Pennsylvania, it was chartered from February 1816 to January 1836. The bank's formal name, according to section 9 of its charter as passed by Congress, was "The President Directors and Company of the Bank of the United States". While other banks in the US were chartered by and only allowed to have branches in a single state, it was authorized to have branches in multiple states and lend money to the US government.
A private corporation with public duties, the bank handled all fiscal transactions for the U.S. Government, and was accountable to Congress and the U.S. Treasury. Twenty percent of its capital was owned by the federal government, the bank's single largest stockholder. Four thousand private investors held 80% of the bank's capital, including three thousand Europeans. The bulk of the stocks were held by a few hundred wealthy Americans. In its time, the institution was the largest monied corporation in the world.
The essential function of the bank was to regulate the public credit issued by private banking institutions through the fiscal duties it performed for the U.S. Treasury, and to establish a sound and stable national currency. The federal deposits endowed the BUS with its regulatory capacity.
Modeled on Alexander Hamilton's First Bank of the United States, the Second Bank was chartered by President James Madison in 1816 and began operations at its main branch in Philadelphia on January 7, 1817, managing 25 branch offices nationwide by 1832.
The efforts to renew the bank's charter put the institution at the center of the general election of 1832, in which the bank's president Nicholas Biddle and pro-bank National Republicans led by Henry Clay clashed with the "hard-money"Andrew Jackson administration and eastern banking interests in the Bank War. Failing to secure recharter, the Second Bank of the United States became a private corporation in 1836, and underwent liquidation in 1841.
The political support for the revival of a national banking system was rooted in the early 19th century transformation of the country from simple Jeffersonian agrarianism towards one interdependent with industrialization and finance. In the aftermath of the War of 1812, the federal government suffered from the disarray of an unregulated currency and a lack of fiscal order; business interests sought security for their government bonds. A national alliance arose to legislate a national bank to address these needs.
The political climate—dubbed americas got talent auditions 3 Era of Good Feelings—favored the development of national programs and institutions, including a protective tariff, internal improvements and the revival of a Bank of the United States. Southern and western support for the bank, led by Republican nationalists John C. Calhoun of South Carolina and Henry Clay of Kentucky, was decisive in the successful chartering effort. The charter was signed into law by James Madison on April 10, 1816. Subsequent efforts by Calhoun and Clay to earmark the bank's $1.5 million establishment "bonus", and annual dividends estimated at $650,000, as a fund for internal improvements, were vetoed by President Madison, on strict constructionist grounds.
Opposition to the bank's revival emanated from two interests. Old Republicans, represented by John Taylor of Caroline and John Randolph of Roanoke, characterized the Second Bank of the United States as both constitutionally illegitimate and a direct threat to Jeffersonian agrarianism, state sovereignty and the institution of slavery, expressed by Taylor's statement that ".if Congress could incorporate a bank, it might emancipate a slave." Hostile to the regulatory effects of the national bank, private banks—proliferating with or without state charters—had scuttled rechartering of the first BUS in 1811. These interests played significant roles in undermining the institution during the administration of U.S. President Andrew Jackson (1829–1837).
The Bank of the US was a national bank. However, it did not serve the functions of a modern central bank: It did not set monetary policy, regulate private banks, hold their excess reserves, or act as a lender of last resort.
The BUS was launched in the midst of a major global market readjustment as Europe recovered from the Napoleonic Wars. The national bank was charged with restraining uninhibited private bank note issue—already in progress—that threatened to create a credit bubble and the risks of a financial collapse. Government land sales in the West, fueled by European demand for agricultural products, ensured that a speculative bubble would form. Simultaneously, the national bank was engaged in promoting a democratized expansion of credit to accommodate laissez-faire impulses among eastern business entrepreneurs and credit-hungry western and southern farmers.
Under the management of the first BUS president William Jones, the bank failed to control paper money issued from its branch banks in the West and South, contributing to the post-war speculative land boom. When the U.S. markets collapsed in the Panic of 1819—a result of global economic adjustments—the national bank came under withering criticism for its belated tight money policies—policies that exacerbated mass unemployment and plunging property values. Further, it transpired that branch directors for the Baltimore office had engaged in fraud and larceny.
Resigning in January 1819, Jones was replaced by Langdon Cheves, who continued the contraction in credit in an effort to stop inflation and stabilize the bank, even as the economy began to correct. The national bank's reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a protracted recession with mass unemployment and a sharp drop in property values that persisted until 1822. The financial crisis raised doubts among the American public as to the efficacy of paper money, and in whose interests a national system of finance operated. Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the BUS in the 1830s. The national bank was in general disrepute among most Americans when Nicholas Biddle, the third and last president of the bank, was appointed by President James Monroe in 1823.
Under Biddle's guidance, the BUS evolved into a powerful banking institution that produced a strong and sound system of national credit and currency. From 1823 to 1833, Biddle expanded credit steadily, but with restraint, in a manner that served the needs of the expanding American economy.Albert Gallatin, former Secretary of the Treasury under Thomas Jefferson and James Madison, wrote in 1831 that the BUS was fulfilling its charter expectations.
Jackson's Bank War
Main article: Bank War
By the time of Jackson's inauguration in 1829, the national bank appeared to be on solid footing. The U.S. Supreme Court had affirmed the constitutionality of the bank under McCulloch v. Maryland, the 1819 case which Daniel Webster had argued successfully on its behalf a decade earlier, the U.S. Treasury recognized the useful services it provided, and the American currency was healthy and stable. Public perceptions of the national bank were generally positive. The bank first came under attack by the Jackson administration in December 1829, on the grounds that it had failed to produce a stable national currency, and that it lacked constitutional legitimacy. Both houses of Congress responded with committee investigations and reports affirming the historical precedents for the bank's constitutionality and its pivotal role in furnishing a uniform currency. Jackson rejected these findings, and privately characterized the bank as a corrupt institution, dangerous to American liberties.
Biddle made repeated overtures to Jackson and his cabinet to secure a compromise on the bank's rechartering (its term due to expire in 1836) without success. Jackson and the anti-bank forces persisted in their condemnation of the BUS, provoking an early recharter campaign by pro-bank National Republicans under Henry Clay. Clay's political ultimatum to Jackson—with Biddle's financial and political support—sparked the Bank War and placed the fate of the BUS at center of the 1832 presidential election.
Jackson mobilized his political base by vetoing the recharter bill and, the veto sustained, easily won reelection on his anti-bank platform. Jackson proceeded to destroy the bank as a financial and political force by removing its federal deposits, and in 1833, federal revenue was diverted into selected private banks by executive order, ending the regulatory role of the Second Bank of the United States.[a]
In hopes of extorting a rescue of the bank, Biddle induced a short-lived financial crisis that was initially blamed on Jackson's executive action. By 1834, a general backlash against Biddle's tactics developed, ending the panic, and all recharter efforts were abandoned.
In February 1836, the bank became a private corporation under the Commonwealth of Pennsylvania law. A shortage of what is the second bank of the united states currency ensued, causing the Panic of 1837 and lasting approximately seven years. The bank suspended payment in 1839 and was liquidated in 1841.
The bank maintained the following branches. Listed is the year each branch opened.
- William Jones, January 7, 1817 – January 25, 1819
- James Fisher, January 25, 1819 – March 6, 1819 (Acting)
- Langdon Cheves, March 6, 1819 – January 6, 1823
- Nicholas Biddle, January 6, 1823 – March 3, 1836
Terms of charter
The Second Bank of the United States was America's national bank, comparable to the Bank of England and the Bank of France, with one key distinction – the United States government owned one-fifth (20%) of its capital. Whereas other national banks of that era were wholly private, the Awds td com Bank of the United States was more characteristic of a government bank.
Under its charter, the bank had a capital limit of $35 million, $7.5 million of which represented the government-owned share. The national bank was required to remit a "bonus" payment of $1.5 million, payable in three installments, to the government for the privilege of using the public funds, interest free, in its private banking ventures. The institution was answerable for its performance to the U.S. Treasury and Congress and subject to Treasury Department usaa bank 24 hour customer service exclusive fiscal agent for the federal government, it provided a number of services as part of its charter, including holding and what is the second bank of the united states of all U.S. deposits, payment and receipt of all government transactions, and processing of tax payments. In other words, the BUS was "the depository of the federal government, which was its principal stockholder and customer."
The chief personnel for the bank comprised 25 directors, five of whom were appointed by the President of the United States, subject to Senate approval. Federally appointed directors were barred from acting as officials in other banks. Two of the three BUS presidents, William Jones and Nicholas Biddle, were chosen from among these government directors.
Headquartered in Philadelphia, the bank was authorized to establish branch offices where it deemed suitable, and these were immune from state taxation.
BUS regulatory mechanisms
The primary regulatory task of the Second Bank of the United States, as chartered by Congress in 1816, was to restrain the uninhibited proliferation of paper money (bank notes) by state or private lenders, which was highly profitable to these institutions.
In this capacity, the bank would preside over this democratization of credit, contributing to a vast and profitable disbursement of bank loans to farmers, small manufacturers and entrepreneurs, encouraging rapid and healthy economic expansion.
Historian Bray Hammond describes the mechanism by which the bank exerted its anti-inflationary influence:
Receiving the checks and notes of local banks deposited with the [BUS] by government collectors of revenue, the [BUS] had constantly to come back on the local banks for settlements of the amounts which the checks and notes called for. It had to do so because it made those amounts immediately available to the Treasury, wherever desired. Since settlement by the local banks was in specie i.e. silver and gold coin, the pressure for settlement automatically regulated local banking lending: for the more the local banks lent the larger amount of their notes and checks in use and the larger the sums they had to settle in specie. This loss of specie reduced their power to lend.
Under this banking regime, the impulse towards overspeculation, with the risks of creating a national financial crisis, would be avoided, or at least mitigated. It was just this mechanism that the local private banks found objectionable, because it yoked their lending strategies to the fiscal operations of the national government, requiring them to maintain adequate gold and silver reserves to meet their debt obligations to the U.S. Treasury. The proliferation of private-sector banking institutions – from 31 banks in 1801 to 788 in 1837 – meant that the Second Bank faced strong opposition from this sector during the Jackson administration.
United States historic place
The architect of the Second Bank of the United States was William Strickland (1788–1854), a former student of Benjamin Latrobe (1764–1820), the man who is often called the first professionally trained American architect. Latrobe and Strickland were both disciples of the Greek Revival style. Strickland went on to design many other American public buildings in this style, including financial structures such as the Mechanics National Bank (also in Philadelphia). He also designed the second building for the main U.S. Mint in Philadelphia in 1833, as well as the New Orleans, Dahlonega, and Charlotte branch mints in the mid-to-late 1830s.
Strickland's design for the Second Bank of the United States is in essence based on the Parthenon in Athens, and is a significant early and monumental example of Greek Revival architecture. The hallmarks of the Greek Revival style can be seen immediately in the north and south façades, which use a large set of steps leading up to the main level platform, known as the stylobate. On top of these, Strickland placed eight severe Doric columns, which are crowned by an entablature containing a triglyphfrieze and simple triangular pediment. The building appears much as an ancient Greek temple, hence the stylistic name. The interior consists of an entrance hallway in the center of the north façade flanked by two rooms on either side. The entry leads into two central rooms, one after the other, that span the width of the structure east to west. The east and west sides of fnb south routing number first large room are each pierced by a large arched fan window. The building's exterior uses Pennsylvania blue marble, which, due to the manner in which it was cut, has begun to deteriorate due to weak parts of the stone being exposed to the elements. This phenomenon is most visible on the Doric columns of the south façade. Construction lasted from 1819 to 1824.
The Greek Revival style used for the Second Bank contrasts with the earlier, Federal style in architecture used for the First Bank of the United States, which also still stands and is located nearby in Philadelphia. This can be seen in the more Roman-influenced Federal structure's ornate, colossal Corinthian columns of its façade, which is also embellished by Corinthian pilasters and a symmetric arrangement of sash windows piercing the two stories of the façade. The roofline is also topped by a balustrade, and the heavy modillions adorning the pediment give the First Bank an appearance much more like a Roman villa than a Greek temple.
Current building use
Since the bank's closing in 1841, the edifice has performed a variety of functions. Today, it is part of Independence National Historical Park in Philadelphia. The structure is open to the public free of charge and serves as an art gallery, housing a large collection of portraits of prominent early Americans painted by Charles Willson Peale and many others.
The building was designated a National Historic Landmark in 1987 for its architectural and historic significance.
The Wall Street branch in New York City was converted into the United States Assay Office before it was demolished in 1915. The federal-style façade was saved and installed in the American Wing of the Metropolitan Museum of Art in 1924.
In popular culture
The Bank of the United States building was described by Charles Dickens in a chapter of his 1842 travelogue American Notes for General Circulation, Philadelphia, and its solitary prison:
We reached the city, late that night. Looking out of my chamber-window, before going to bed, I saw, on the opposite side of the way, a handsome building of white marble, which had a mournful ghost-like aspect, dreary to behold. I attributed this to the sombre influence of the night, and on rising in the morning looked out again, expecting to see its steps and portico thronged with groups of people passing in and out. The door was still tight shut, however; the same cold cheerless air prevailed: and the building looked as if the marble statue of Don Guzman could alone have any business to transact within its gloomy walls. I hastened to inquire its name and purpose, and then my surprise vanished. It was the Tomb of many fortunes; the Mobile home for rent near me pet friendly Catacomb of investment; the memorable United States Bank.
The stoppage of this bank, with all its ruinous consequences, had cast (as I was told on every side) a gloom on Philadelphia, under the depressing effect of which it yet laboured. It certainly did seem rather dull and out of spirits.
- ^ abcdeHammond 1947, p. 155.
- ^Hall & Clarke 1832, p. 625.
- ^Hammond 1947, p. 149.
- ^ abcdeDangerfield 1966, p. 12.
- ^Hofstadter 1948, pp. 60–61.
- ^Hammond 1956, p. 102 harvnb error: no target: What is the second bank of the united states (help).
- ^Hammond 1947, p. 149–150.
- ^Dangerfield 1966, pp. 10–11.
- ^Hammond 1956, p. 9 harvnb error: no target: CITEREFHammond1956 (help).
- ^ abRemini 1993, p. 140.
- ^ abcdWilentz 2005, p. 205.
- ^Remini 1993, p. 145.
- ^Wilentz 2005, p. 365.
- ^Meyers 1953, pp. 212–213.
- ^Schlesinger 1945, pp. 115–116.
- ^Hammond 1956, p. 100 harvnb error: no target: CITEREFHammond1956 (help).
- ^Hammond 1957, p. 359.
- ^ abWilentz 2005, p. 401.
- ^ abHammond 1947, p. 157.
- ^Hammond 1956, p. 10 harvnb error: no target: CITEREFHammond1956 (help).
- ^Dangerfield 1966, pp. 88–89.
- ^ abWilentz 2005, p. 181.
- ^Wilentz 2005, pp. 204–205.
- ^Hammond 1947, p. 149.
- ^ abDangerfield 1966, p. 10.
- ^Wilentz 2005, pp. 204–205.
- ^Wilentz 2005, p. 182.
- ^Schlesinger 1945, p. 11.
- ^Wilentz 2005, pp. 203, 205.
- ^Schlesinger 1945, pp. 11–12.
- ^Dangerfield 1966, pp. 10–11.
- ^Dangerfield 1966, p. 11.
- ^Minicucci 2004[page needed]
- ^Remini 1981, p. 32.
- ^Schlesinger 1945, pp. 20–21.
- ^Wilentz 2005, pp. 203, 214.
- ^ abcdHammond 1947, p. 150.
- ^Dangerfield 1966, p. 87.
- ^Hammond 1947, p. 152.
- ^Wilentz 2005, pp. 203–204.
- ^Hammond 1947, p. 153.
- ^Hill 2015, online.
- ^ abcWilentz 2005, p. 206.
- ^Dangerfield 1966, p. 76.
- ^Dangerfield 1966, pp. 73–74.
- ^Hofstadter 1948, pp. 55–56.
- ^Wilentz 2005, pp. 205–207.
- ^Dangerfield 1966, pp. 80–81, 85.
- ^Remini 1981, p. 28.
- ^Dangerfield 1966, pp. pp. 86, 89.
- ^ abDangerfield 1966, p. 84.
- ^Dangerfield 1966, pp. 81, 83.
- ^Dangerfield 1966, p. 80.
- ^Dangerfield 1966, pp. 85–86.
- ^Wilentz 2005, pp. 207–208.
- ^ abDangerfield 1966, p. 89.
- ^ abcHammond 1947, p. 151.
- ^Remini 1981, p. 229.
- ^Hofstadter 1948, p. 62.
- ^Killenbeck 2006, pp. 98–109.
- ^Hammond 1957, p. 371.
- ^Schlesinger 1945, p. 77.
- ^ abWilentz 2005, p. 362.
- ^Hammond 1947, pp. 151–152.
- ^Remini 1981, pp. 228–229, 303.
- ^Hammond 1957, pp. 377–378.
- ^Hammond 1957, p. 379.
- ^Hofstadter 1948, pp. 59–60.
- ^Schlesinger 1945, p. 81.
- ^Remini 1981, pp. 301–302.
- ^Remini 1981, pp. 341–342.
- ^Hammond 1957, p. 385.
- ^Remini 1981, p. 365.
- ^Wilentz 2005, p. 369.
- ^Remini 1981, p. 343.
- ^Schlesinger 1945, p. 87.
- ^Remini 1981, p. 361.
- ^Remini 1981, p. 374.
- ^Schlesinger 1945, p. 91.
- ^Schlesinger 1945, p. 87.
- ^Wellman 1966, p. 132.
- ^Remini 1981, pp. 382–383, 389.
- ^Remini 1981, pp. 375–376.
- ^Wilentz 2005, pp. 392–393.
- ^Schlesinger 1945, p. 98.
- ^Hofstadter 1948, pp. 61–62.
- ^Wilentz 2005, p. 396.
- ^Schlesinger 1945, p. 103.
- ^Wilentz 2005, p. 400.
- ^Schlesinger 1945, pp. 112–113.
- ^PhiladelphiaFed 2021, p. 7.
- ^Hammond 1947, p. 140.
- ^Wilentz 2005, p. 364.
- ^ abcdHammond 1947, p. 149.
- ^Wellman 1966, p. 92.
- ^Wilentz 2005, p. 365.
- ^Hammond 1957, p. 9.
- ^Wilentz 2005, pp. 74–75.
- ^Hofstadter 1948, p. 56.
- ^Hammond 1956, pp. 9–10 harvnb error: no target: CITEREFHammond1956 (help).
- ^Hammond 1947, pp. 149–150.
- ^Wilentz 2005, p. 205.
- ^Hofstadter 1948, p. 56.
- ^Hammond 1947, p. 153.
- ^NRIS 2006, online.
- ^Gallery 2004, p. 35 harvnb error: no target: CITEREFGallery2004 (help).
- ^ abNPS 2017, online.
- ^NPS 2009, online.
- ^Independence Hall 2020, online.
- ^Dickens 1913, p. 81.
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Andrew Jackson announced in 1833 that the government would no longer use Second Bank of the United States. He then removed all federal funds from the bank in what was called the final blast of the “bank wars.”
The Second Bank of the United States was founded in 1816; five years after first national bank’s (created by George Washington) charter had expired. Traditionally, the bank was biased toward the urban and industrial northern states. Jackson resented the bank’s lack of funding for expansion into the unsettled Western territories and objected to the bank’s unusual political and economic power.
Jackson called for an investigation into the bank’s policies and political agenda as soon as he settled in to the White House. He planned to challenge the constitutionality of the bank, much to the horror of its supporters. In response, the director of the bank, Nicholas Biddle, turned to members of Congress like Kentucky Senator Henry Clay to fight Jackson.
Jackson presented his case against the bank in a speech to Congress; they decided the bank was indeed constitutional. Controversy continued for the next three years. In 1932, the divisiveness led to a split in Jackson’s cabinet and Jackson vetoed an attempt by Congress to draw up a new charter for the bank. All of this took place during Jackson’s bid for re-election; the bank’s future was the focal point of a bitter political campaign between the Democratic incumbent Jackson and his opponent Henry Clay. Jackson’s promises to empower the “common man” of America appealed to the voters and paved the way for his victory. He felt he had received a mandate from the public to close the bank once and for all.
In 1833, Jackson removed all the federal funds from the second Bank and redistributed them to various state banks. Jackson had succeeded in destroying the bank; its charter officially expired in 1836.
Source: Andrew Jackson shuts down Second Bank of the U.S.
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U.S. National Bank
State: District of Columbia shari headley coming to america 2
Provision for a national bank modeled on the Bank of England was one of Alexander Hamilton's prescriptions for stabilizing the federal government's fiscal and monetary health. In 1791, Congress chartered the First Bank of the United States, which operated as a private bank and the government's depository. The Bank performed well, but opponents in Congress, upset with the Bank's restrictions on state banks, fearful of concentrations of federal power, and dubious of the Bank's constitutionality, defeated a re-charter bill in 1811. Difficulties associated with financing the War of 1812 demonstrated the need for a national bank, and in 1816 Congress chartered the Second Bank of the United States. Modeled after the First Bank, the Second Bank of the United States exercised commercial and central bank responsibilities. Under the leadership of Nicholas Biddle, the Second Bank became a powerful force in the national economy. Based in Philadelphia with branch offices in twenty-five cities including St. Louis by 1832, the Second Bank defined fiscal policy and regulated note issues and lending of state banks. Biddle's monetary policies roused opposition among Jacksonian Democrats and advocates of state banks, and in 1832 the Second Bank's re-charter became the chief issue in the presidential election. Andrew Jackson vetoed the Bank re-charter bill in July 1832, and he interpreted his victory in November as a mandate for his opposition to the Second Bank. In 1833, Jackson began withdrawing federal deposits from the Second Bank, and in 1836 the Second Bank's charter expired. Abraham Lincoln had supported the Second Bank in its conflict with President Jackson, and in 1835 Lincoln voted against several resolutions introduced in the Illinois General Assembly opposing the charter of a national bank and endorsing Jackson's conduct in the Bank War. After the demise of the Second Bank, state banks filled the void in the financial markets. Lincoln remained a strong proponent of a national bank and became a staunch critic of Martin Van Buren's Independent Treasury (Sub-Treasury) System. Lincoln's speech against the Independent Treasury (Sub-Treasury) System, delivered a day after Christmas in 1839, became important in the Whig campaign to unseat Van Buren in 1840. The so-called "free banking era" ending in 1863 when Congress passed the National Banking Act.
Howard Bodenhorn, "Banking and Finance," The Oxford Companion to United States History, ed. by Paul S. Boyer (New York: Oxford University Press, 2001), 61; Robert V. Remini, Andrew Jackson and the Bank War: A Study in the Growth of Presidential Power (New York: W. W. Norton, 1967); Michael Burlingame, Abraham Lincoln: A Life (Baltimore, MD: Johns Hopkins University Press, 2008), 1:96, 150-51; Speech of Mr. Lincoln, at a Political Discussion, in the Hall of the House of Representatives, December 1839, at Springfield, Illinois.
King Andrew and the Bank
On July l0, 1832, President Andrew Jackson sent a message to the United States Senate. He returned unsigned, with his objections, a bill that extended the charter of the Second Bank of the United States, due to expire in 1836, for another fifteen years. As Jackson drily noted, the bill was presented to him on the Fourth of July, a day freighted with portent.
Today Jackson's Bank Veto and the political conflagration known as the “Bank War” that it touched off seem arcane and nearly incomprehensible. While misdeeds among the rich and powerful still garner headlines and incite congressional inquiries, the core instruments of our economic system-the network of banks capped by the Federal Reserve; the corporate form of business enterprise; the very dollars in our wallets, issued and guaranteed by the federal government—are utterly taken for granted. That these could have been the subject of controversy, that anyone could seriously contemplate organizing American capitalism differently, seems nearly unthinkable. Andrew Jackson is recalled today, when recalled at all, for other things, primarily as the architect of forced Indian removal. His face on the $20 bill is a mystery to many, an outrage to some, and, to the knowing, a curious irony.
Yet, in its day, nothing galvanized American political conflict more than banking, currency, and finance. In the republic's first half-century, no subject, save foreign relations and war, gave greater vexation to American statesmen or aroused more heated public debate. The creation of the original Bank of the United States in 1791 sparked the first major division within President George Washington's administration, which later ripened into the Federalist and Democratic-Republican parties. Jackson's veto in 1832 repeated the process: It became the touchstone issue in his reelection campaign and precipitated the organization of the Whig and Democratic parties, the latter, still surviving, now the oldest mass political party in the world. The very language of Jackson's veto, departing sharply from all that came before, furnished a political grammar since claimed by Populists, Progressives, New Deal liberals, socialists, free marketeers, libertarians—in short, by just about everybody.
Clearly, one cannot fully appreciate Jacksonian, and indeed American, politics without confronting his Bank Veto. Yet to make sense of the document requires imagining a world in some ways very different from our own. Americans were already by the time of the Revolution a famously enterprising people, yet their enterprise required capital far beyond available means. Credit was vital but often uncertain. The country's only legal money, gold and silver coin, was in chronic shortage, never plentiful enough to serve in everyday exchange. Banking in the early United States therefore grew by the forced hand of government. By special individualized acts of legislation, state and federal governments incorporated banks and authorized them to lend their own credit in the form of banknotes. Ostensibly redeemable in specie, these notes passed in lieu of coin in daily commerce, serving in practice, though not in law, as money.
The connection of banks and government was fraught with financial and political peril, especially in a young republic whose citizens craved riches and yet resented every hint of aristocratic privilege. Banking was poorly understood, not yet professionalized, and its amateur practitioners sometimes wreaked disaster on their customers. Indeed, men commonly sought bank charters not as an outlet for investment, but as a source of credit—not looking to lend, but to borrow. In a financial sleight of hand, the required paid-in capital to start a bank often consisted of IOUs to be redeemed by the bank's own profits.
That lawmakers could ordain credit, and hence create wealth, by merely waving a legislative wand struck many citizens as strange and malign. Corporations themselves were a novel form of business organization, not yet standardized or widely utilized. To many simple farmers and tradesmen, the granting of special favors, including the prize of limited liability, by means of legislative bank charters recalled the hated British system of monopoly and corruption. Paper money was also suspect-with good reason, since if issued imprudently it had a way of becoming worthless. No less than former President John Adams in 1813 damned chartered banking as a giant swindle, a "Sacrifice of public and private Interest to a few Aristocratical Friends and Favourites."
In 1790, Treasury Secretary Alexander Hamilton proposed to incorporate a Bank of the United States. Modeled on the Bank of England, it was intended frankly to buttress the new government by entangling its finances with the interests of moneyed men. Though serving public purposes, the Bank was to be a profit-making institution, with private shareholders holding four-fifths of its stock and electing four-fifths of its directors. It was, said Hamilton, “an essential ingredient” in inspiring confidence in its prudent management that a national bank "be under a private not a public direction, under the guidance of individual interest, not of public policy."
Opposed by Secretary of State Thomas Jefferson and his ally James Madison, Hamilton's Bank nonetheless passed Congress and became law. In operation it accomplished all its architects had hoped, stabilizing the country's chaotic currency and helping retire its Revolutionary debt. But many Jeffersonians never accepted it, and when its twenty-year charter came up for renewal in 1811, with Congress in their control, they killed it.
The government's ensuing flirtation with bankruptcy in the War of 1812 taught them their mistake. In 1816, Congress chartered a Second Bank, again for www allied insurance com years. Like its predecessor, it was a predominantly private entity serving public purposes. The four-to-one private-public ratio in ownership and directorate was retained, and the Bank's capital was advanced from $10 to $35 million, a huge sum in those days. Authorized to establish branches throughout the states, the Bank was the country's only financial institution of truly national reach. While competing with state-chartered banks for private business (and controlling their lending by collecting their notes for redemption), it would also be the federal government's banker, charged with brokering its loans and with receiving, storing, transporting, and disbursing federal funds. The Bank's notes were legal tender. In return for its “exclusive privileges and benefits,” including a congressional pledge to create no competing institution, the Bank was to pay the government a bonus of $1.5 million.
Opening for business in the midst of a postwar boom, the Second Bank promptly discredited itself by speculation, stockjobbing, and, at some branches, outright fraud. But under the discreet management of its second president, Langdon Cheves, and his successor, Nicholas Biddle, it soon repaired its condition and reputation. By the end of the 1820s it had proved not only useful but, to many eyes, indispensable.
But not to Andrew Jackson. Jackson came to the presidency with a deep sense of grievance against his enemies, real and imagined, in the existing political establishment and with a conviction that the government had fallen from Jeffersonian austerity into profligacy and corruption. This he was determined to reverse. The Bank was barely mentioned in Jackson's 1828 successful campaign against incumbent John Quincy Adams. But, after assuming office, Jackson learned of branch officers using the Bank as what one Jackson partisan called “an engine of political oppression” against his followers. Asked to explain, Bank president Biddle pronounced the charges “entirely groundless.” He affirmed the Bank's forbearance from politics-and its complete independence from executive control.
Then, in November 1829, Biddle approached Jackson with a proposition. The Bank would assume the last of the dwindling national debt to enable its full discharge before the end of Jackson's term, an object that Biddle knew was dear to the president's heart. The quid for this quo was an early recharter for the Bank, which would send its stock soaring and provide a windfall for shareholders.
Intended to placate Jackson by showing the Bank's friendship and usefulness, Biddle's offer had the opposite effect. To Jackson it was a backstairs deal smelling of privilege and corruption, something close to a bribe. Already suspicious of the Bank, from that moment he turned irrevocably against it. In his first annual message to Congress just a few weeks later, he startled everyone by raising the question of recharter and declaring his opposition. The Bank's constitutionality and expediency were “well questioned,” said Jackson, “and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency.” It was a statement at variance with facts. The Bank's notes, unlike those of many state-chartered banks, circulated everywhere at face value, their integrity unquestioned. They were as good as gold.
To Jackson it did not matter. In the Bank, Jackson found a concrete focus for all his fears of aristocratic subversion—fears he shared with many citizens. “I was aware that the Bank question would be disapproved by all the sordid, & interested, who prised self interest more than the perpetuity of our liberty, & the blessings of a free republican government,” he confided shortly after the annual message. “This monied aristocracy” was everywhere at work, buying up voters and lawmakers and “silencing opposition, by its corrupting influence, & preparing for a renewal of its charter, which I viewed as the death blow to our liberty.”
The recipient of this disclosure was none other than James Alexander Hamilton, son of the late Treasury secretary and himself a federal district attorney and Jackson confidant. Hamilton had helped craft the passage opposing recharter in the annual message. Now, at Jackson's prompting, he prepared a detailed critique, arraying objections to the Bank under two heads. The Bank was unconstitutional, because Congress had no power to charter corporations and withdraw them from the regulatory and taxing power of the states. (This was the Jeffersonian position, which the Supreme Court under Chief Justice John Marshall had rejected in the landmark case of McCulloch v. Maryland in 1819.) The Bank was also dangerous to liberty, because its concentrated power gave it a “fearful influence” over citizens' lives and an unchecked sway over government, inviting corruption and oppression.
Jackson copied Hamilton's headings into his private memorandum book. Over the next two years, he recopied and reworked his bill of particulars, always under the same two heads: The Bank was unconstitutional, and it was dangerous to liberty. Meanwhile, the question of recharter simmered. In his 1830 and 1831 annual messages, Jackson reiterated his opposition to the Bank. He proposed in its stead a wholly government institution—in name a bank, but in effect an arm of the Treasury, without power to make loans, acquire property, or issue notes.
In 1832, Congress acted, but not as Jackson recommended. A bill to extend the charter, slightly modified, of the existing Bank passed both houses by healthy majorities, though less than the two-thirds required to override a veto. To Jackson the bill's timing confirmed his strictures about the Bank's meddling in politics. Biddle had decided to press for recharter at the urging of Senator Henry Clay, Jackson's opponent in the presidential election only months away. In effect, they dared Jackson to veto.
He did, in a message that became the rhetorical apex of his presidency. Treasury official Amos Kendall and other wordsmiths helped which island in the keys has the best beaches the Veto, but the governing ideas, drawn straight from Jackson's memoranda, were clearly his own. Following Jefferson, and contradicting the Supreme Court in McCulloch, Jackson denied the Bank's constitutionality and affirmed his right to judge that question independent of Congress or the courts. Ingeniously, and perversely, he targeted foreign stockholders for special censure. Much of the Bank's stock was, in fact, held abroad, especially in Britain. The charter screened management from foreign interference by barring noncitizens from serving as directors or voting their shares. They could invest, but not control. By an economist's rationale, a more benign vehicle for inviting capital into America's developing economy could hardly be contrived. Yet Jackson's arguments turned investment into subversion. Bank dividends, he complained, siphoned off American money overseas, and the immunity of foreign stockholders from domestic taxation would lure ever more stock abroad, concentrating the Bank's control within a narrowing sphere of domestic holders and inviting their subservience to foreign dictation. “If we must have a bank,” Jackson warned, “it should be purely American.”
But the real heart of the Veto was its attack on exclusivity and favoritism. Sounding the loaded words “monopoly” and “privilege” over and over like a tocsin, Jackson laid out his core theme: The Bank's charter gave its stockholders a promise of pelf and power not accessible to other citizens. It made them “a privileged order, clothed both with great political power and enjoying immense pecuniary advantages from their connection with the Government.” Jackson's peroration conveyed both the Veto's essential meaning and its inescapable ambiguity:
It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society-the farmers, mechanics, and laborers-who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.
In all the presidential messages—inaugurals, annuals, vetoes—that came before, there is nothing like this. Other presidents had sometimes warned Americans of foreign perils, or the dangers of factionalism and divisiveness among equally well-disposed and meritorious citizens. Andrew Jackson warned them against their government—and each other.
And yet, what exactly does it mean? Jackson's frank branding of Americans by occupation and circumstance, his bold counterposing of rich and poor, and his solicitude for the working “farmers, mechanics, and laborers” against the “rich and powerful” seemed to many then and later a promulgation of class warfare—an anathema to some, a battle cry for others. Yet his acknowledgment of inevitable wealth disparities and his solution of “equal protection” and minimalist government echo more of market economics than of the welfare state. Some historians see Best auto loan refinance rates in a straight line of working-class champions, foes of capitalist dominion, running from Thomas Jefferson through Franklin Roosevelt. Others see him as the spokesman of enterprise, assailing a confining, repressive politico-economic establishment to liberate the wealth-creating energies of “superior industry, economy, and virtue.” There is strong evidence on both sides.
And still another question lurks. If Jackson pointedly stretched the ranks of people who mattered politically to include “farmers, mechanics, and laborers,” did that portend a further extension, beyond the white male electorate, to include women, slaves, and Indians? Without question, Jackson did not himself intend so. But words once spoken may have a life of their own. Whether one sees Jackson's invocation of “the humble members of society” as weighing on the side of inclusion or exclusion, erecting boundaries or breaking them down, has everything to do with how one judges his legacy and reputation.
The veto held up in Congress, as all knew it would. In the ensuing campaign, both sides, remarkably, distributed the message as a campaign document-Jacksonians to show his patriotism and egalitarianism, foes to exhibit his ignorance and demagoguery. Jackson trounced Clay in the election. Afterwards, to defang the Bank, whose present charter was still in effect and whose political resourcefulness was by no means exhausted, Jackson withdrew the federal government's deposits and lodged them with various state-chartered banks. Biddle retaliated by curtailing loans, causing business distress. Intended to force a recharter, his action instead discredited the Bank by reinforcing Jackson's warnings of its irresponsible power. Jackson's removal of the deposits prompted his foes to coalesce under the name of Whigs, a term denoting opponents of royal prerogative. In 1834, a Whig Senate formally censured Jackson—an action which Jacksonians, now calling themselves Democrats, expunged from the Senate record as soon as they gained a majority. The defeated Bank accepted a charter from the Pennsylvania legislature and continued after 1836 as a state institution.
The destruction of the Bank loosed American enterprise from its only central restraint. Gorged with federal deposits and with no one to control their note issues, state banks went on a lending spree that built up a speculative bubble and ended, just as Jackson left office in 1837, in a sickening crash. Jackson's culpability for the ensuing depression is still debated. Jackson himself came to oppose all chartered banks and banknotes, state as well as federal, and to favor a return to gold and silver “hard money”—a radical deflation which Whigs charged would throw progress back a century. In Jackson's farewell address on retiring from office, he elaborated the language of the Veto, condemning bank paper as an engine of oppression and warning of the insidious "money power" and of the growing control exerted by faceless corporations over ordinary citizens' lives.
Jackson's Democratic successors Martin Van Buren and James K. Polk cemented his victory over the Bank. A new independent Treasury assumed the handling of government finances, realizing Jackson's aim of severing government from the business of banking. For a generation, that business remained semi-organized and essentially directionless. The exigencies of the Civil War forced the first steps toward nationalizing the banking system and the currency, a process completed with the creation of the Federal Reserve in 1913.
The immediate circumstances that prompted Andrew Jackson's ringing expostulations have long since passed away. Whether his words carry an enduring message would be for later generations, including our own, to decide for themselves.