THE WAR ON THE UNITED STATES BANK
“Nothing lacks now to complete the love-feast,” wrote Isaac Hill sardonically to Thomas H. Benton after the collapse of nullification, “but for Jackson and Webster to solemnize the coalition [in support of the Union] with a few mint-juleps! I think I could arrange it, if assured of the coöperation of yourself and Blair on our side, and Jerry Mason and Nick Biddle on theirs. But never fear, my friend. This mixing of oil and water is only the temporary shake-up of Nullification. Wait till Jackson gets at the Bank again, and then the scalping-knives will glisten once more.”
The South Carolina controversy had indeed brought Jacksonians and anti-Jacksonians together. But once the tension was relaxed, there began the conflict of interests which the New Hampshire editor had predicted. Men fell again into their customary political relationships; issues that for the moment had been pushed into the background—internal improvements, public land policy, distribution of surplus revenue, and above all the Bank—were revived in full vigor. Now, indeed, the President entered upon the greatest task to which he had yet put his hand. To curb nullification was a worthy achievement. But, after all, Congress and an essentially united nation had stood firmly behind the Executive at every stage of that performance. To destroy the United States Bank was a different matter, for this institution had the full support of one of the two great parties in which the people of the country were now grouped; Jackson’s own party was by no means a unit in opposing it; and the prestige and influence of the Bank were such as to enable it to make a powerful fight against any attempts to annihilate it.
The second Bank of the United States was chartered in 1816 for twenty years, with a capital of thirty-five million dollars, one-fifth of which had been subscribed by the Government. For some time it was not notably successful, partly because of bad management but mainly because of the disturbance of business which the panic of 1819 had produced. Furthermore, its power over local banks and over the currency system made it unpopular in the West and South, and certain States sought to cripple it by taxing out of existence the several branches which the board of directors voted to establish. In two notable decisions—M’Culloch vs. Maryland in 1819 and Osborn vs. United States Bank in 1824—the Supreme Court saved the institution by denying the power of a State to impose taxation of the sort and by asserting unequivocally the right of Congress to enact the legislation upon which the Bank rested. And after Nicholas Biddle, a Philadelphia lawyer-diplomat, succeeded Langdon Cheves as president of the Bank in 1823 an era of great prosperity set in.
The forces of opposition were never reconciled; indeed, every evidence of the increasing strength of the Bank roused them to fresh hostility. The verdict of the Supreme Court in support of the constitutionality of the Act of 1816 carried conviction to few people who were not already convinced. The restraints which the Bank imposed upon the dubious operations of the southern and western banks were vigorously resented. The Bank was regarded as a great financial monopoly, an “octopus,” and Biddle as an autocrat bent only on dominating the entire banking and currency system of the country.
On Jackson’s attitude toward the Bank before he became President we have little direct information. But it is sufficiently clear that eventually he came to share the hostile views of his Tennessee friends and neighbors. In 1817 he refused to sign a memorial “got up by the aristocracy of Nashville” for the establishment of a branch in that town. When, ten years later, such a branch was installed, General Thomas Cadwalader of Philadelphia, agent of the Bank, visited the town to supervise the arrangements and became very friendly with the “lord of the Hermitage.” But correspondence of succeeding years, though filled with insinuating cordiality, failed to bring out any expression of goodwill toward the institution such as the agent manifestly coveted.
Jackson seems to have carried to Washington in 1829 a deep distrust of the Bank, and he was disposed to speak out boldly against it in his inaugural address. But he was persuaded by his friends that this would be ill-advised, and he therefore made no mention of the subject. Yet he made no effort to conceal his attitude, for he wrote to Biddle a few months after the inauguration that he did not believe that Congress had power to charter a bank outside of the District of Columbia, that he did not dislike the United States Bank more than other banks, but that ever since he had read the history of the South Sea Bubble he had been afraid of banks. After this confession the writer hardly needed to confess that he was “no economist, no financier.”
Most of the officers of the “mother bank” at Philadelphia and of the branches were anti-Jackson men, and Jackson’s friends put the idea into his mind that the Bank had used its influence against him in the late campaign. Specific charges of partizanship were brought against Jeremiah Mason, president of the branch at Portsmouth, New Hampshire; and although an investigation showed the accusation to be groundless, Biddle’s heated defense of the branch had no effect save to rouse the Jacksonians to a firmer determination to compass the downfall of the Bank.
Biddle labored manfully to stem the tide. He tried to improve his personal relations with the President, and he even allowed Jackson men to gain control of several of the western branches. The effort, however, was in vain. When he thought the situation right, Biddle brought forward a plan for a new charter which received the assent of most of the members of the official Cabinet, as well as that of some of the “Kitchen” group. But Jackson met the proposal with his unshakable constitutional objections and, to Biddle’s deep disappointment, advanced in his first annual message to the formal, public assault. The Bank’s charter, he reminded Congress, would expire in 1836; request for a new charter would probably soon be forthcoming; the matter could not receive too early attention from the legislative branch. “Both the constitutionality and the expediency of the law creating this bank,” declared the President, “are well questioned by a large portion of our fellow-citizens; and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency.” The first part of the statement was true, but the second was distinctly unfair. The Bank, to be sure, had not established “a uniform and sound” currency. But it had accomplished much toward that end and was practically the only agency that was wielding any influence in that direction. The truth is that the more efficient the Bank proved in this task the less popular it became among those elements of the people from which Jackson mainly drew his strength.
Nothing came of the President’s admonition except committee reports in the two Houses, both favorable to the Bank; in fact, the Senate report was copied almost verbatim from a statement supplied by Biddle. A year later Jackson returned to the subject, this time with an alternative plan for a national bank to be organized as a branch of the Treasury and hence to have “no means to operate on the hopes, fears, or interests of large masses of the community.” In a set of autograph notes from which the second message was prepared the existing Bank was declared not only unconstitutional but dangerous to liberty, “because through its officers, loans, and participation in politics it could build up or pull down parties or men, because it created a monopoly of the money power, because much of the stock was owned by foreigners, because it would always support him who supported it, and because it weakened the state and strengthened the general government.” Congress paid no attention to either criticisms or recommendations, and the supporters of the Bank took fresh heart.