Second Bank of the United States
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The Second Bank of the United States was a bank chartered in 1816, five years after the expiration of the First Bank of the United States. It was founded during the administration of U.S. President James Madison out of desperation to stabilize the currency. The Second Bank of the United States was located in Philadelphia, Pennsylvania, where its building, designed by the architect William Strickland, still stands as part of Independence National Park.
The Bank served as the repository for Federal funds until 1836, when its charter expired after President Andrew Jackson refused to recharter it after a famous dispute with the Bank's president, Nicholas Biddle. The Bank then became a private institution until it became defunct in 1841.
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[edit] Architecture
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 would go on to design many other American public buildings in this style, including financial structures such as the New Orleans, Dahlonega, and Charlotte branch mints in the mid-to-late 1830s, as well as the second building for the main U.S. Mint in Philadelphia in 1833.
Strickland's design for the Second Bank of the United States remains fairly straightforward. 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 triglyph frieze and simple triangular pediment. The building appears much as an ancient Greek temple, hence the stylistic name. The interior consists of a 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 the first large room are each pierced by 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 from the exposure to the elements of weak parts of the stone. 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 slightly with the earlier, Federal style in architecture used for the First Bank, whose building 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.
[edit] Background
This Second bank was patterned after the First Bank of the United States. The legality of the Bank was upheld in the U.S. Supreme Court case McCulloch v. Maryland 17 U.S. 316 (1819) that also declared null and void any state law contrary to a federal law made in pursuance of the Constitution. The Bank's last president was Nicholas Biddle (1786-1844), an upper class well educated man of letters with banking expertise.
Renewal of the Second Bank was vetoed on July 10, 1832 by Andrew Jackson, and it slowly declined until the expiration of its charter in 1836. The bank became a major campaign issue in 1832, with Jackson supported by the Democrats and Biddle supported by Henry Clay and the newly formed Whig party. Jackson won and the national charter was never renewed, but Biddle kept the bank in operation using a state charter. Tensions were high in August 1841 when President John Tyler vetoed a Whig bill that called for the re-establishment of the Second Bank of the United States.
[edit] Controversy
The [ ], combined with some jealous bankers, urged Andrew Jackson to destroy it as a monstrous threat to American liberties. The head of the Second Bank was Nicholas Biddle. The bank was created after James Madison and Albert Gallatin found the government unable to finance the War of 1812 after the closing of the First Bank of the United States in 1811.
After the war an economic boom created a need for a strong bank. American agricultural products were in demand in Europe, due to the devastation of the Napoleonic Wars. The Bank aided this boom through its uncontrolled lending. At the time, land sales for speculation were being encouraged. This lending allowed almost anyone to borrow money and speculate in land, sometimes doubling or even tripling the prices of land. The land sales for 1819, alone, totaled some 55 million acres (220,000 km²). With such a boom, hardly anyone noticed the widespread fraud occurring at the Bank.
In the summer of 1818, the national bank managers realized the bank's massive over-extension, and instated a policy of contraction and the calling in of loans. This recalling of loans simultaneously curtailed land sales and slowed the US production boom due to the recovery of Europe. The result was the Panic of 1819 and the situation leading up to McCulloch v. Maryland 17 U.S. 316 (1819).
Maryland adopted a policy to restrict banks, by placing a tax on any bank that was not chartered by the state legislature. This tax was either 2% of all assets or a flat rate of $15,000. That meant that the Baltimore Branch would have to pay this hefty tax. McCulloch filed suit against the state in a county court. The case made its way through the courts, all the way up to the United States Supreme Court, where the tax by the state of Maryland was ultimately struck down.
[edit] The Bank's decline
By the early 1830s, President Andrew Jackson had come to thoroughly dislike the Second Bank of the United States because of its fraud and corruption. Although its charter was bound to run out in 1836, Jackson wanted to "kill" the Second Bank of the United States even earlier. In some circles, Jackson is considered primarily responsible for its demise. Jackson promoted the growth of farmland, while the national bank denied this growth.
The Second Bank of the United States thrived from the tax revenue that the federal government regularly deposited. Jackson struck at this vital point by putting federal tax revenue in other, state banks nicknamed "pet banks" because of their loyalty to Jackson's party. The Second Bank of the United States soon began to lose money. Nicholas Biddle, desperate to save his bank, called in (demanded payment on) all of his loans and closed the bank to new loans. This angered many of the bank's clients, causing them to pressure Biddle to re-adopt its previous loan policy. The Second Bank of the United States was left with little money and, in 1836, its charter expired and it turned into an ordinary bank in Philadelphia. Five years later, the former Second Bank of the United States went bankrupt.
Many approved of Jackson's actions, while others thought quite differently. Some of Jackson's original supporters were outraged and accused Jackson of having a personal and political vendetta in the bank's veto.
In his message on the veto of the bank Jackson used language which appeared to resonate mostly with the common man of the country, while attacking the predominantly rich or foreign stockholders of the current bank. For instance, he explained, "It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class. For their benefit does this act exclude the whole American people ... It is but justice and good policy, as far as the nature of this case will admit, to confine our favors to our own fellow-citizens."
Jackson's veto message inspired Nicholas Biddle to discount the message as a "manifesto of anarchy." Daniel Webster of Massachusetts suggested that such language was a political tool, and the entire message a campaign document for Jackson's approaching re-election in 1832, which Jackson won. Such anti-Jacksonians converted their outrage into political action and in 1834 formed the Whig party.
[edit] References
[edit] Secondary sources
- Bodenhorn, Howard. A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building (2000). Stresses how all banks promoted faster growth in all regions.
- Daniel Feller, "The bank war," in Julian E. Zelizer, ed. The American Congress (2004), pp 93-111.
- Hammond, Bray. Banks and Politics in America from the Revolution to the Civil War (1960). Pulitzer prize winner; the standard history. Pro-Bank
- Remini Robert V. Andrew Jackson and the Bank War: A Study in the Growth of Presidential Power (1967). Pro-Jackson.
- Schlesinger, Arthur Meier Jr. Age of Jackson (1946). Pulitzer prize winning intellectual history; strongly pro-Jackson.
- Taylor; George Rogers, ed. Jackson Versus Biddle: The Struggle over the Second Bank of the United States (1949). Primary and secondary sources.
- Temin, Peter. The Jacksonian Economy (1969)
- Wilburn, Jean Alexander. Biddle's Bank: The Crucial Years (1967). Narrative history, pro-Bank.
- Wilentz Sean. The Rise of American Democracy: Jefferson to Lincoln (2005). Pro-Jackson.
[edit] Primary sources
- McGrane, Reginald C. Ed. The Correspondence of Nicholas Biddle (1919)
- Hofstadter, Richard. Great Issues in American History: From the Revolution to the Civil War, 1765-1865 (1958).
[edit] External links
- The Second Bank of the United States - a history of the Bank by Ralph C. H. Catterall of the University of Chicago, 1902 - on Google Books
- Andrew Jackson on the Web : Bank of the United States
Categories: Banks of the United States | Economic history of the United States | 1816 establishments | Registered Historic Places in Pennsylvania | National Historic Landmarks of the United States | Defunct banks of the United States | 1841 disestablishments | Andrew Jackson | History of the United States (1789–1849)
