Tag Archives: National Bank

Jacksonian Misconceptions

Proponents of Andrew Jackson’s policies cite his… veto of the rechartering of the Second National Bank as a victory for the ‘little guy.’  Old Hickory was defending the interests of  States and the common man against the wicked monopoly held by the ‘monstrous’ bank.  A closer examination of his storied veto message reveals  inconsistencies in Jackson’s motive.

“these polices(of the Second US Bank) created of bond of union among the banking establishments of the nation erecting them into an interest separate from that of the people.” 

Trivializing the momentous

Trivializing the momentous

Was Jackson opposed to the Second National Bank… or banks in general? The veto message is not clear, and his advisers didn’t discriminate in their policy making.  It is difficult to imagine that educated politicians of any era could have such a rudimentary understanding of finance-  cash is good, credit is bad…. The political motivations for killing the Second National Bank far outweighed any economic or egalitarian rhetoric put forward by Jackson and his cronies.

Jackson's nemesis was a banker- Nicholas Biddle

Jackson’s nemesis was a banker- Nicholas Biddle

The antebellum economy was built upon credit… 80% of all transactions and transfer of goods involved extensions of credit- banks were vital to this financial system.  Jackson’s political gamble to win reelection was that the reduction of available credit would not have much effect on American commerce.  The Second National Bank was at the center of a complicated web of notes, loans, credit, and specie… Jackson’s policies were about to tear it apart.

 

 

 

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Negative Reaction; Banking edition

Andrew Jackson really understood one thing about the Second National Bank… it was Henry Clay’s ‘baby.’   Jackson was the first President to use the veto as a political weapon; killing three spending bills proposed by Clay and his supporters.  Clay proposed rechartering the National Bank in 1832 to draw a clear political distinction between he and Jackson in the Presidential election.

Slaying the Bank Monster

Slaying the Bank Monster

“Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people….”

Always the bridesmaid

Always the bridesmaid

Jackson was doing away with an evil monopoly… misusing the funds of the American people.  That is how he and his advisers rationalized the veto.  Jackson and his people did not comprehend the complexities of 19th century American finance, the simplicity of his veto message exposes this rudimentary grasp of economics.  Jackson was gambling the fiscal health of the nation for political gain.

 

 

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A Most Costly Victory

“The President is the direct representative of the American people…”  Andrew Jackson defiantly responded to his censure by the Senate.  Jacksonians believed the election victory in 1832 was a mandate from the people to kill the National Bank.  Jackson withdrew the nation’s deposits from the bank despite protests from Congress and his own Cabinet.  Bank President Nicholas Biddle responded by contracting credit- sending the nation into a panic.  Congress was powerless to stop Jackson, the Senate’s censure an empty gesture.

Clay described him- "The greatest latitudinarian that has ever filled the office"

Clay described him- “The greatest latitudinarian that has ever filled the office”

Jackson’s victory in the Bank War… radically changed the Presidency.  In many ways, he was our first modern President; using the office in a role of national leadership, rather than passive executive.  His war on the Bank forever changed the relationship between the President and the American people.  Not only did Jackson triumph over Biddle, Clay, Calhoun, and Webster- the Bank War increased the power of the Presidency beyond anything the Framers could have imagined.  The voters would continue to look to the President to make policy, not just sit in judgement of Congressional actions.  Jackson’s leadership solidified the control a President had over his party- the Democratic party carried out Jackson’s will – “My friends never leave me….”


 

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Good Ideas Endure

Hamilton noted in 1790- Industry is increased, commodities are multiplied, agriculture and manufacturers flourish: and herein consists the true wealth and prosperity of a state. ”  

"The tendency of a national bank is to increase public and private credit. The former gives power to the state for the protection of its rights and interests, and the latter facilitates and extends the operations of commerce amongst individuals."

“The tendency of a national bank is to increase public and private credit. The former gives power to the state for the protection of its rights and interests, and the latter facilitates and extends the operations of commerce amongst individuals.”

The prosperity of the young American state… depended on our ability to obtain credit around the world.  The great irony of a credit rating is that you need debt to obtain one.  Hamilton created the National Debt to build our credit, he proposed the First National Bank to solidify our investment markets.  The battle with Jefferson over the creation of the bank was ideological rather than financial.

A stabilizing force

A stabilizing force

Madison battled the creation of the… National Bank in the first Congress.  He supported Jefferson’s belief that the future of America was rural and agricultural- not urban, industrial, and commercial.  The Bank’s  charter expired in 1811- as war with England loomed.  Madison watched as the void left by the bank led to inflation and a collapsed currency- financial turmoil that nearly cost America the War of 1812.

 

The Second National Bank was chartered… in 1816 and signed into law by James Madison.  The wisdom of Hamilton’s proposal had come full circle.  The Bank’s most ardent opponent came to see its economic value.  These concerns clearly outweighed the ideological objections of the Jeffersonians.

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Good Ideas Endure

Hamilton noted in 1790- Industry is increased, commodities are multiplied, agriculture and manufacturers flourish: and herein consists the true wealth and prosperity of a state. ”  

"The tendency of a national bank is to increase public and private credit. The former gives power to the state for the protection of its rights and interests, and the latter facilitates and extends the operations of commerce amongst individuals."

“The tendency of a national bank is to increase public and private credit. The former gives power to the state for the protection of its rights and interests, and the latter facilitates and extends the operations of commerce amongst individuals.”

The prosperity of the young American state… depended on our ability to obtain credit around the world.  The great irony of a credit rating is that you need debt to obtain one.  Hamilton created the National Debt to build our credit, he proposed the First National Bank to solidify our investment markets.  The battle with Jefferson over the creation of the bank was ideological rather than financial.

A stabilizing force

A stabilizing force

Madison battled the creation of the… National Bank in the first Congress.  He supported Jefferson’s belief that the future of America was rural and agricultural- not urban, industrial, and commercial.  The Bank’s  charter expired in 1811- as war with England loomed.  Madison watched as the void left by the bank led to inflation and a collapsed currency- financial turmoil that nearly cost America the War of 1812.

 

The Second National Bank was chartered… in 1816 and signed into law by James Madison.  The wisdom of Hamilton’s proposal had come full circle.  The Bank’s most ardent opponent came to see its economic value.  These concerns clearly outweighed the ideological objections of the Jeffersonians.

Leave a comment

Filed under Ephemera, News

A Most Costly Victory

“The President is the direct representative of the American people…”  Andrew Jackson defiantly responded to his censure by the Senate.  Jacksonians believed the election victory in 1832 was a mandate from the people to kill the National Bank.  Jackson withdrew the nation’s deposits from the bank despite protests from Congress and his own Cabinet.  Bank President Nicholas Biddle responded by contracting credit- sending the nation into a panic.  Congress was powerless to stop Jackson, the Senate’s censure an empty gesture.

Clay described him- "The greatest latitudinarian that has ever filled the office"

Clay described him- “The greatest latitudinarian that has ever filled the office”

Jackson’s victory in the Bank War… radically changed the Presidency.  In many ways, he was our first modern President; using the office in a role of national leadership, rather than passive executive.  His war on the Bank forever changed the relationship between the President and the American people.  Not only did Jackson triumph over Biddle, Clay, Calhoun, and Webster- the Bank War increased the power of the Presidency beyond anything the Framers could have imagined.  The voters would continue to look to the President to make policy, not just sit in judgement of Congressional actions.  Jackson’s leadership solidified the control a President had over his party- the Democratic party carried out Jackson’s will – “My friends never leave me….”


 

Leave a comment

Filed under Ephemera, News

Negative Reaction; Banking edition

Andrew Jackson really understood one thing about the Second National Bank… it was Henry Clay’s ‘baby.’   Jackson was the first President to use the veto as a political weapon; killing three spending bills proposed by Clay and his supporters.  Clay proposed rechartering the National Bank in 1832 to draw a clear political distinction between he and Jackson in the Presidential election.

Slaying the Bank Monster

Slaying the Bank Monster

“Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people….”

Always the bridesmaid

Always the bridesmaid

Jackson was doing away with an evil monopoly… misusing the funds of the American people.  That is how he and his advisers rationalized the veto.  Jackson and his people did not comprehend the complexities of 19th century American finance, the simplicity of his veto message exposes this rudimentary grasp of economics.  Jackson was gambling the fiscal health of the nation for political gain.

 

 

Leave a comment

Filed under Ephemera, News