Second Bank of the United States

Second Bank of the United States

Infobox_nrhp | name =Second Bank of the United States
nrhp_type =nhl

caption =The south façade of the Second Bank of the United States in August 2006.
location= Philadelphia, Pennsylvania
lat_degrees = 39 | lat_minutes = 56 | lat_seconds = 54.86 | lat_direction = N
long_degrees = 75 | long_minutes = 8 | long_seconds = 55.2 | long_direction = W
area =
built =1816
architect= Strickland,William
architecture= Greek Revival
added = May 04, 1987
governing_body = National Park Service
refnum=87001293 cite web|url=|title=National Register Information System|date=2006-03-15|work= Historic Places|publisher=National Park Service]

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 out of a desperation to stabilize the currency by the administration of U.S. President James Madison. 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 Historical Park.

The Bank served as the depository for Federal funds until 1833, when President Andrew Jackson instructed his Secretaries of the Treasury to cease depositing the funds. Two refused to obey, so he fired them, one after the other, until he got one who obeyed: Roger B. Taney, his former Attorney General and the future Supreme Court Chief Justice. This decision, at least in part, grew out of Jackson's famous dispute with the Bank's president, Nicholas Biddle. The Bank, always a privately owned institution, lost its Federal charter in 1836,cite web |url= |title= Historical Beginnings ... The Federal Reserve |author= Johnson, Roger T. |publisher= Federal Reserve Bank of Boston] and ceased operations in 1841.


The 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 Banks last president was Nicholas Biddle (1786-1844).

Renewal of the Second Bank was vetoed on November 24, 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, who ran against Jackson. Jackson won, and the national charter was not 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 Party bill that called for the re-establishment of the Second Bank of the United States.


The Second Bank of the United States provided a convenient way for the government to handle its affairs. The bank was created when James Madison and Albert Gallatin found the government unable to finance the country in the aftermath of the War of 1812. The War of 1812 had put the United States in significant debt, [ US] ] and the First Bank of the United States had closed in 1811. The debt of the nation led to an increase in banknotes among the new private banks, and as a result, inflation increased greatly. As a result, Madison and Congress agreed to form the Second Bank of the United States.

After the war, despite the debt, the United States also experienced an economic boom, due to the devastation of the Napoleonic Wars. In particular, because of the damage to Europe's agricultural sector, the U.S. agricultural sector underwent an expansion. The Bank aided this boom through its lending, which encouraged speculation in land. 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 as well as the economic bubble that had been created. [ Ratner, 1993, ch 7]

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 U.S. 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). [Schweikart (1987)]

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. Daniel Webster had successfully argued the case for the bank.

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. Jackson then had an investigation done on the Bank which he said established "“beyond question that this great and powerful institution had been actively engaged in attempting to influence the elections of the public officers by means of its money.”" Although its charter was bound to run out in 1836, Jackson wanted to "kill" the Second Bank of the United States even earlier. Jackson is considered primarily responsible for its demise, seeing it as an instrument of political corruption and a threat to American liberties. [ Wilentz , 2005] The head of the Second Bank during Jackson's presidency was Nicholas Biddle who decided to seek an extension of the bank's charter four years early, in 1832. Henry Clay helped to steer the bill through Congress. But Jackson vetoed the bill in July.

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.

Jackson's charter extension veto message inspired Biddle to dismiss the message as a "manifesto of anarchy." Senator Daniel Webster of Massachusetts, who was on retainer as the bank's legal counsel and also Director of its Boston branch, suggested such language was a political tool, and the entire message a campaign document for Jackson's approaching re-election in 1832. If so, it was successful. Jackson defeated Clay.

The Second Bank of the United States thrived from the tax revenue that the federal government regularly deposited. Jackson struck at this vital source of funds in 1833 by instructing his Secretary of the Treasury to deposit federal tax revenues in state banks, soon nicknamed "pet banks" because of their loyalty to Jackson's party.

In September, 1833, Secretary of the Treasury Roger B. Taney transferred the government's Pennsylvania deposits in the Second Bank of the United States to the Bank of Girard in Philadelphia. This was the successor bank to the Bank of Stephen Girard. Stephen Girard had purchased the assets of the First Bank of the United States when its charter was not renewed in 1811. He then named his new bank the Bank of Stephen Girard. He became a major financier of the War of 1812, including most of the war loan of 1813. He was the original organizer and a major shareholder of the Second Bank. He died in 1841.

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.

Some anti-Jacksonians converted their outrage into political action. Under guidance from Webster and Clay, in 1834 they formed the Whig party. [ Remini (1967)] If the Whigs and anti-Jackson National Republicans could gain enough votes in Congress in the 1836 election to override a second Jackson veto, they could extend the bank's charter. They did not get enough new members to override a veto. Because of this and the numerous economic Panics during the preceding years, Congress did not send another bank charter extension bill to Jackson.cite web|url=|title=$3,000 Bill|publisher=National Museum of American History, Smithsonian Institution|accessdate=2008-06-17]

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. [Ratner (1993) ch 7] the collapse of the Bank along with the Jackson's issuing of the specie circular led to the Panic of 1837 which dominated the presidency of Martin Van Buren.


Despite the demise of the Second Bank of the United States, the building that housed it was not demolished. Since the Bank's closing in 1841, the edifice has performed a variety of functions. As of 2006, it is included as one of the main structures in Independence National Historical Park in downtown Philadelphia, alongside many other important early American structures such as Independence Hall and the Philadelphia Merchants' Exchange. The structure is open daily free of charge and serves as an art gallery, housing a large and famous collection of portraits of prominent early Americans painted by Charles Willson Peale and many others.


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, Mechanics National Bank (also in Philadelphia) 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 an 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.



econdary 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.
* Costello, Shannon Marie. "Jackson Is My Kind of Man" :P (2006). Memoir. Pro-Jackson.
* Daniel Feller, "The bank war," in Julian E. Zelizer, ed. "The American Congress" (2004), pp 93-111.
* Hammond, Bray. "Jackson, Biddle, and the Bank of the United States," "The Journal of Economic History", Vol. 7, No. 1 (May, 1947), pp. 1-23 [ at JSTOR]
* Hammond, Bray. "Banks and Politics in America from the Revolution to the Civil War" (1957). Pulitzer prize winner; the standard history. Pro-Bank
* Hammond, Bray. "The Second Bank of the United States. "Transactions of the American Philosophical Society," New Ser., Vol. 43, No. 1 (1953), pp. 80-85 [ in JSTOR]
* Ratner, Sidney, James H. Soltow, and Richard Sylla. "The Evolution of the American Economy: Growth, Welfare, and Decision Making." (1993)
* 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.
* Schweikart, Larry. "Banking in the American South from the Age of Jackson to Reconstruction" (1987)
*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.

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).

ee also

*The Federal Reserve
*Federal Reserve Act
*Panic of 1837
*History of central banking in the United States

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]

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