Bank War
Essay
Conflict over renewing the charter of the Second Bank of the United States triggered the 1830s Bank War, waged between President Andrew Jackson (1767-1845) and bank president Nicholas Biddle (1786-1844). Operating from its Parthenon-style building on Chestnut Street between Fourth and Fifth Streets in Philadelphia, the bank served as a reliable depository for federal money and provided a sound national currency. The expiration of its federal charter in 1836 virtually ended Philadelphia’s standing as the nation’s banking center, and New York’s Wall Street supplanted Chestnut Street as the America’s financial hub.
Congress issued a twenty-year charter for the Second Bank of the United States in 1816, with the government controlling twenty percent of the bank’s stock. Modeled after the First Bank of the United States, established in Philadelphia in the 1790s, the Second Bank handled all federal deposits and expenditures. The bank had a rocky start (overextension of loans helped trigger the Panic of 1819), but it became a dependable institution, and Biddle was generally considered a highly successful and respected leader. By the end of the 1820s, the bank had twenty-nine branches and conducted $70 million in business annually. Nevertheless, President Jackson’s first annual message to Congress in 1829 alleged corruption and condemned the bank as an unconstitutional entity. He favored hard money over bank notes, but also blamed the bank for the Panic of 1819, particularly for his personal losses.
(Library of Congress)
While Jackson, a Democrat, opposed the bank, National Republicans in Congress sought to renew the institution’s charter in 1832 (four years early), believing a veto would cost Jackson reelection. The House approved by 107-85 and the Senate by 28-20. Pennsylvania’s two senators and all but one of its twenty-five congressmen were among the bill’s advocates. The New Jersey and Delaware delegations were also strongly pro-bank. During congressional debates, pro-bank petitions came in from citizens of Philadelphia and Delaware County as well as from state banks, including fifteen from Pennsylvania. Despite nationwide support across various social groups, Jackson vetoed the bill.
Jackson handily won reelection in 1832, though his veto likely cost him votes. A majority of Philadelphians voted against Jackson (he did carry Pennsylvania); New Jersey voted in an anti-Jackson state legislature, but the state’s electoral votes ended up in Old Hickory’s column. He was still personally very popular. When Jackson visited Philadelphia on the first anniversary of his charter veto in June 1833, a reception in Independence Hall–just one block from the Second Bank–became so crowded with enthusiastic supporters that some had to escape the throng through open first-floor windows.
Jackson insisted that the bank was “trying to kill me,” and he vowed to destroy it at any cost. He believed his reelection a mandate and continued to portray the bank as a corrupt tool of foreign interests that worked against Americans. In 1833, President Jackson instructed his treasury secretary to withhold federal deposits, later transferring federal money to “pet banks” (state banks with Democratic ties). Jackson dismissed two secretaries before finding a willing accomplice in Roger B. Taney (1777-1864). In response, Biddle contracted the bank’s operations by calling in loans and exchanging state notes for specie to protect the institution and its investors. The bank’s board of governors unanimously concurred.
As the Second Bank limited its operations, however, an economic depression began, businesses closed, unemployment rose, and inflation reached one of its highest rates in U.S. history. Biddle did not have the capital to make payments on the national debt. The War Department forbade the bank from carrying out its responsibility of paying Revolutionary War pensions in an attempt to turn public opinion against it. Still, the bank initially lost little support and a new political party, the Whigs, emerged to challenge Jackson’s supposed tyranny. At the height of the Bank War, 1833-34, the Senate received 243 memorials calling for the return of federal deposits and only 55 petitions supporting the president’s actions. In January 1834, the Philadelphia Board of Trade issued a statement blaming the financial panic on the Jackson administration. Other Philadelphia banks also protested the president’s actions. Tensions grew to the point that wealthy, pro-administration Philadelphians found themselves excluded or expelled from social organizations. In Congress, the Whig-controlled Senate censured Jackson for his actions against the bank. Each side blamed the other for the turmoil.
Biddle ultimately relaxed the bank’s credit policies and the economic malaise lifted. The bank thus received the brunt of the blame for the previous years’ problems. The public turned against the bank, viewing its actions as vindictive. In 1834, Election Day riots occurred in Philadelphia, and the Whigs lost seats in Congress and the state legislature. Finally, in 1836, two weeks before the U.S. charter expired, the Pennsylvania legislature granted the bank a state charter. By the time Biddle retired in 1839, the bank was in poor shape. Over the following two years, when it could not pay its debts, the bank suspended and resumed specie payments twice, closing its doors permanently in 1841.
The Bank War cost Philadelphia and the nation a central bank, shifting the nation’s financial center to New York City. Thereafter, local banks lacked any regulating authority and the resulting speculation triggered panics through the rest of the century.
Andrew Tremel is an independent researcher and public historian at the U.S. Capitol Visitor Center. (Author information current at time of publication.)
Copyright 2016, Rutgers University
Gallery
“Explosion of Biddle & Cos. Congress Water Fount”
In 1833, President Andrew Jackson ordered that federal deposits be removed from the Bank of the United States, a controversial action that ultimately led to the bank's destruction. This cartoon, published in 1834, is a satire on the failure of the combined efforts of Henry Clay, Daniel Webster, John Calhoun, and Nicholas Biddle to thwart Jackson's treasury policy. It is one of the few satires favorable to Jackson on the bank issue.
To the right, beneath columns marked "Pensylvania," "Virginia," "New York," and "Georgia," sits Andrew Jackson smoking a clay pipe and conversing with Jack Downing. Behind him are strong boxes of "Deposites," the topmost of which is marked "Foundation for a National Bank." Leaning on them is the figure of Liberty with a staff, liberty cap and flag reading "Public confidence in Public funds." At her feet is an eagle with shield, arrows and lightning bolts. In the captions, Downing declares: “... Gineral, this is a real shiver de freeze! You've sent Clay to ‘pot’ eny how ‘nullified Calhoun,’ made ‘Webster’ a ‘shuttle cock and busted Biddle's Bank biler!’ Jackson replies: "Aye, Aye, Major Downing they thought they'd give us a dose of Congress Water, but they find what we're ‘Bent on’ and we've given 'em a hard Poke into the bargain!" He refers to support for his program spearheaded in Congress by Missouri Senator Thomas Hart Benton.
On the left, a marble-based water fountain explodes, hurling aside (clockwise from upper left) Nicholas Biddle, Daniel Webster, Henry Clay, and John Calhoun. In the upper left corner, Biddle exclaims: “The fountain from the which my current springs or else dries up to be discarded thence,--.” Webster: “Thus vaulting ambition doth o'er leap itself and falls on t'other side.” Clay: “Sic transit gloria mundi. Le jeu est fait, The game is up." Calhoun (losing his cockaded hat and bayonet): “United ‘we’ stand, divided I fall. Fonte nulla fides." Also thrown from the fountain in the explosion are a National Gazette, ginger bread, a bottle of “Boston Pop,” and a plank labeled “American System,” a reference to economic policy advocated by Henry Clay. (Caption adapted from text by the Library of Congress)
“General Jackson Slaying the Many Headed Monster”
This 1836 satire of Andrew Jackson's campaign to destroy the Bank of the United States and its support among state banks depicts Jackson, Martin Van Buren, and Jack Downing’s struggle against a snake with heads representing the states. Jackson (on the left) raises a cane marked “Veto” and says, “Biddle thou Monster Avaunt!! avaount I say! or by the Great Eternal I'll cleave thee to the earth, aye thee and thy four and twenty satellites. Matty if thou art true...come on. if thou art false, may the venomous monster turn his dire fang upon thee...” Van Buren replies: “Well done General, Major Jack Downing, Adams, Clay, well done all. I dislike dissentions beyond every thing, for it often compels a man to play a double part, were it only for his own safety. Policy, policy is my motto, but intrigues I cannot countenance.” Downing (dropping his axe) then exclaims: "Now now you nasty varmint, be you imperishable? I swan Gineral that are beats all I reckon, that's the horrible wiper wot wommits wenemous heads I guess...” The largest of the heads represents the president of the bank, Nicholas Biddle, who wears a top hat labeled “Penn” (Pennsylvania) and “$35,000,000.” This refers to the the Pennsylvania legislature’s rechartering of the bank in defiance of the administration's efforts to destroy it. (Caption adapted from text by the Library of Congress)
“The Downfall of Mother Bank”
This pro-Jackson satire applauds the president's September 1833 order for the removal of federal deposits from the Bank of the United States. The combined opposition to this move from bank President Nicholas Biddle, Senate Whigs led by Daniel Webster and Henry Clay, and the pro-Bank press are ridiculed.
On the right, Jackson, cheered on by Major Jack Downing, holds aloft an “Order for the Removal of Public Money.” Jackson exclaims: “Major Jack Downing. I must act in this case with energy and decision, you see the downfall of the party engine and corrupt monopoly!!” Downing replies: “Hurrah! General! if this don't beat skunkin, I'm a nigger, only see that varmint Nick how spry he is, he runs along like a Weatherfield Hog with an onion in his mouth.” Lightning bolts emanating from the document topple the bank’s columns and pediment, which crash down amidst fleeing public figures and Whig editors. Around them are strewn newspapers and sheets labeled “Salary $6,000” and “Printing expenses $80,000.” Henry Clay (at left, fallen) cries: “Help me up! Webster! or I shall lose my stakes.” Daniel Webster (far left): “There is a tide in the affairs of men, as Shakespeare says, so my dear Clay, look out for yourself.” Nicholas Biddle, with the head and hoofs of an ass or demon, runs to the left: “It is time for me to resign my presidency.” Two men flee with sacks of “fees.” These fugitives may be newspaper editors Mordecai Manuel Noah and James Watson Webb, advocates of the bank who were accused of being in the employ of Biddle. (Caption adapted from text by the Library of Congress)
“The Political Barbecue”
In a cartoon from 1834, during the controversy surrounding Andrew Jackson's removal of federal deposits from the Bank of the United States, Jackson (with the body of a pig) is roasted over the fires of “Public Opinion.” The fire is stoked by former Secretary of the Treasury William Duane, at lower right, while Jack Downing, lower left, splits kindling. Downing remarks: “I jest split a little kindleying wood, so Amos can jest make Broth for all hands &c.” Duane: "I am opposed to Removing the Deposits, as I was when I was Secretary, but prefer gently Stirring them up."
Five men, opponents of Jackson's bank program, stand behind the barbecue. They are (from left to right) Senators Henry Clay, Daniel Webster (holding a knife), William B. Preston, bank President Nicholas Biddle, and an unidentified fifth man. Vice President Martin Van Buren, as an imp, flies off to the right with a sack of Treasury Notes over his shoulder. Clay comments: “Dan this is what they call in Kentuc our High Game to their Low Jack.” Webster: “In Massachusetts they call it Roasting.”
Preston: “In South Carolina t'is called Barbecue only he wants a little more Basteing.” Biddle: “In Pennsylvania we find it difficult to find a home for the animal but have concluded to call him Nondescript pertaking of the General, Hog, Man and Devil.” Fifth man: “We think he pertakes strongly of the Rooter, for he has rooted our treasures all over the country and was squeeling for the Pension-fund when Clay caught him and put a ring in his nose, and we've all given it a twist.” Van Buren: “T'is my business to get folks in trouble and their business to get themselves out.” (Caption adapted from text by the Library of Congress)
The Second National Bank
Conflict over renewing the charter of the Second Bank of the United States triggered the 1830s Bank War, waged between President Andrew Jackson (1767-1845) and bank president Nicholas Biddle (1786-1844). Operating from its Parthenon-style building on Chestnut Street between Fourth and Fifth Streets in Philadelphia, shown here in 1980, the bank served as a reliable depository for federal money and provided a sound national currency. The expiration of its federal charter in 1836 virtually ended Philadelphia’s standing as the nation’s banking center, and New York’s Wall Street supplanted Chestnut Street as the America’s financial hub.
The Second Bank of the United States was designed by William Strickland (1788-1854), who heavily favored the Greek Revival Style. Strickland looked to the Parthenon in Greece as a model, borrowing its blank pediments and Doric columns. Strickland designed numerous other public buildings in this style around Philadelphia, including the Mechanics National Bank located at 22 S. Third Street and the United States Mint located at the intersection of Chestnut and Juniper Streets.
After the demise of the bank in 1836, the building changed hands and function, eventually becoming the Custom House in Philadelphia. Alongside these shifts in use came changes to the interior and some of the exterior of the building. Little remains of the building's original interior design except for the barrel vaulted ceiling, the marble columns in the main banking room, and the side flue fireplaces.
The Second National Bank of the United States building was purchased by the National Park Service from the Treasury Department in 1939 and became the home of the Carl Schurz Foundation. In 2006 the National Park Service added the building to the Independence National Historical Park and served as an exhibit space for the "People of Independence" exhibit of portraits. The “People of Independence” exhibit is a collection of portraits of influential people primarily painted by Charles Willson Peale and were initially displayed in Peale’s Philadelphia Museum. As of 2015-16 the Second National Bank and the portrait Gallery were closed for cleaning and conservation work.
Nicholas Biddle
Nicholas Biddle (1786-1844), shown here in an 1830 portrait painted by James Barton Longacre, was born in Philadelphia and was a descendant of the Biddle Family that originally immigrated to Pennsylvania with William Penn.
Nicholas Biddle was accepted and educated at the University of Pennsylvania initially and then transferred to the College of New Jersey, now known as Princeton, and graduated in 1801 at 15 years old. In 1810 Biddle served the Pennsylvania House of Representatives, and then in the Pennsylvania State Senate in 1814.
Biddle lobbied for the rechartering of the Second Bank of the United States, following the expiration of the First Bank of the United States Charter in 1811. Congress issued a twenty-year charter for the Second Bank of the United States in 1816, with the government controlling twenty percent of the bank’s stock. The bank had a rocky start (overextension of loans helped trigger the Panic of 1819), but following the appointment of Biddle as president in 1822, the bank became a dependable institution. By the end of the 1820s, the bank had twenty-nine branches and conducted $70 million in business annually.
First Bank of the United States
Library Company of Philadelphia
The predecessor of the Second Bank of the United States, the First Bank of the United States (erected 1795-97), is a brilliant example of Federal architecture. Built in neoclassical design and ornately decorated with Corinthian columns and portico, this bank established the architectural style for any important building constructed in the newborn United States. The Federal style represented strength, dignity, and security embodied by the society and thus the architecture of ancient Greece. The blooming Republic was quite apprehensive to give the national government control of many things and banking was surely one of them. To gain public trust in a national bank, the First Bank of the United States was built in the Federal style and loaded with national symbols the new American Republic would recognize.
Greco-Roman design elements such as marble pillars and grand staircases were thought to recall the democracy and splendor of ancient Greece, and represented the harmony and equality thought to have existed there. Another symbol important to new nationalism and also evident on the First Bank of the United States is the bald eagle. Atop the two-story portico sits a carved bald eagle, which had been the country's national bird for only fourteen years at the time of construction.
Text by Kim Coulter
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