John Lord - Beacon Lights of History, Volume 12 - American Leaders

Hostility to the money-power, however, is older than the public life of Jackson. It existed among the American democracy as early as the time of Alexander Hamilton. When he founded the first Bank of the United States he met with great opposition from the followers of Jefferson, who were jealous of the power it was supposed to wield in politics. When in 1810 the question came up of renewing the charter of the first United States Bank, the Democratic-Republicans were bitter in their opposition; and so effective was the outcry that the bank went into liquidation, its place being taken by local banks. These issued notes so extravagantly that the currency of the country, as stated by Professor Sumner, was depreciated twenty-five per cent. So great was the universal financial distress which followed the unsound system of banking operations that in 1816 a new bank was chartered, on the principles which Hamilton had laid down.

This Bank was to run for twenty years, and its capital was thirty-five millions of dollars, seven of which were taken by the United States; many of its stockholders were widows, charitable institutions, and people of small means. Its directors were chosen by the stockholders with the exception of five appointed by the President of the United States and confirmed by the Senate. The public money was deposited in this Bank; it could be removed by the Secretary of the Treasury, but by him only on giving his reasons to Congress. The Bank was located in Philadelphia, then the money-centre of the country, but it had twenty-five branches in different cities, from Portsmouth, N.H., to New Orleans. The main institution could issue notes, not under five dollars, but the branches could not. Langdon Cleves, of South Carolina, was the first president, succeeded in 1823 by Nicholas Biddle, of Philadelphia,–a man of society, of culture, and of leisure,–a young man of thirty-seven, who could talk and write, perhaps, better than he could manage a great business.

The affairs of the Bank went on smoothly for ten or twelve years, and the financial condition of the country was never better than when controlled by this great central institution. Nicholas Biddle of course was magnified into a great financier of uncommon genius,–the first business man in the whole country, a great financial autocrat, the idol of Philadelphia. But he was hated by Democratic politicians as a man who was intrusted with too much power, which might be perverted to political purposes, and which they asserted was used to help his aristocratic friends in difficulty. Moreover, they looked with envy on the many positions its offices afforded, which, as it was a "government institution," they thought should be controlled by the governing party.

Among Biddle's especial enemies were the members of the "Kitchen Cabinet," who with sycophantic adroitness used Jackson as a tool.

Isaac Hill, of New Hampshire, was one of the most envenomed of these politicians, who hated not only Biddle but those who adhered to the old Federalist party, and rich men generally. He had sufficient plausibility and influence to enlist Levi Woodbury, Senator from New Hampshire, to forward his schemes.

In consequence, Woodbury, on June 27, 1829, wrote to Ingham, Secretary of the Treasury, making complaints against the president of the branch bank in Portsmouth for roughness of manner, partiality in loans, and severity in collections. The accused official was no less a man than Jeremiah Mason, probably the greatest lawyer in New England, if not of the whole country, the peer as well as the friend of Webster. Ingham sent Woodbury's letter to Biddle, intimating that it was political partiality that was complained of. Then ensued a correspondence between Biddle and Ingham,–the former defending Mason and claiming complete independence for the Bank as to its management, so long as it could not be shown to be involved in political movements; and the latter accusing, threatening to remove deposits, attempting to take away the pension agency from the Portsmouth branch, et cetera . It was a stormy summer for the Bank.

Thus things stood until November, when a letter appeared in the New York "Courier and Inquirer," stating that President Jackson, in his forthcoming first annual message to Congress, would come out strongly against the Bank itself. And sure enough, the President, in his message, astonished the whole country by a paragraph attacking the Bank, and opposing its recharter. The part of the message about the Bank was referred to both Houses of Congress. The committees reported in favor of the Bank, as nothing could be said against its management. Again, in the message of the President in 1830, he attacked the Bank, and Benton, one of the chief supporters of Jackson in spite of their early duel, declared in the Senate that the charter of the Bank ought not to be renewed. Here the matter dropped for a while, as Jackson and his friends were engrossed in electioneering schemes for the next presidential contest, and the troubles of the cabinet on account of the Eaton scandal had to be attended to. As already noted, they ended in its dissolution, followed by a new and stronger cabinet, in which Ingham was succeeded as Secretary of the Treasury by Louis McLane.

It was not till 1832,–the great session of Jackson's administrations,–that the contest was taken up again. The Bank aimed to have its charter renewed, although that would not expire for five years yet; and as the Senate was partly hostile to the President, it seemed a propitious time for the effort. Jackson, on the other hand, fearing that the Bank would succeed in getting its charter renewed with a friendly Congress, redoubled his energies to defeat it. The more hostile the President showed himself, the more eager were the friends of the Bank for immediate action. It was, with them, now or never. If the matter were delayed, and Jackson were re-elected, it would be impossible to secure a renewal of the charter, while it was hoped that Jackson would not dare to veto the charter on the eve of a presidential election, and thus lose, perhaps, the vote of the great State of Pennsylvania. So it was resolved by the friends of the Bank to press the measure.

Five months were consumed in the discussion of this important matter, in which the leading members of the Senate, except Benton, supported the Bank. The bill to renew the charter passed the Senate on the 11th of June, by a vote of twenty-eight to twenty, and the House on the 3d of July by a majority of thirty-three. It was immediately vetoed by the President, on the ground that the Bank was an odious monopoly, with nearly a third of its stock held by foreigners, and not only odious, but dangerous as a money-power to bribe Congress and influence elections. The message accompanying the veto was able, and was supposed to be written by Edward Livingston or Amos Kendall. Biddle remained calm and confident. Like Clay, he never dreamed that Jackson would dare to persist in a hostility against the enlightened public sentiment of the country. But Jackson was the idol of the Democracy, who would support all his measures and condone all his faults, and the Democracy ruled,–as it always will rule, except in great public dangers, when power naturally falls into the hands of men of genius, honesty, and experience, almost independently of their political associations.

The veto aroused a thunder of debate, Webster and Clay leading the assault upon it, and Benton, with other Jacksonians, defending it. The attempt to pass the re-charter bill over the veto failed of the necessary two-thirds majority, and the President was triumphant.

Jackson had no idea of yielding his opinions or his will to anybody, least of all to his political enemies. The war with the Bank must go on; but its charter had three or four years still to run. All he could do legally was to cripple it by removing the deposits. His animosity, inflamed by the denunciations of Benton, Kendall, Blair, Hill, and others, became ungovernable.