Second Bank Of The United States
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The Second Bank of the United States was the second federally authorized
Hamiltonian Hamiltonian may refer to: * Hamiltonian mechanics, a function that represents the total energy of a system * Hamiltonian (quantum mechanics), an operator corresponding to the total energy of that system ** Dyall Hamiltonian, a modified Hamiltonian ...
national bank In banking, the term national bank carries several meanings: * a bank owned by the state * an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) * in the United States, an ordinary p ...
in the United States. Located in
Philadelphia Philadelphia, often called Philly, is the largest city in the Commonwealth of Pennsylvania, the sixth-largest city in the U.S., the second-largest city in both the Northeast megalopolis and Mid-Atlantic regions after New York City. Sinc ...
,
Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
, the bank was chartered from February 1816 to January 1836.. The Bank's formal name, according to section 9 of its charter as passed by Congress, was "The President Directors and Company of the Bank of the United States". While other banks in the US were chartered by and only allowed to have branches in a single state, it was authorized to have branches in multiple states and lend money to the US government. A
private corporation A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
with
public duties Public duties are performed by military personnel, and usually have a ceremonial or historic significance rather than an overtly operational role. Armenia Since September 2018, the Honour Guard Battalion of the Ministry of Defense of Armenia has ...
, the Bank handled all fiscal transactions for the U.S. Government, and was accountable to
Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
and the
U.S. Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing and t ...
. Twenty percent of its capital was owned by the federal government, the Bank's single largest
stockholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
.. Four thousand private investors held 80 percent of the Bank's capital, including three thousand Europeans. The bulk of the stocks were held by a few hundred wealthy Americans. In its time, the institution was the largest monied corporation in the world. The essential function of the Bank was to regulate the
public credit A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
issued by private banking institutions through the fiscal duties it performed for the U.S. Treasury, and to establish a sound and stable
national currency Fiat money (from la, fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically designated by the issuing government to be legal tender. Throughout history, fiat money was sometime ...
... The federal deposits endowed the Bank with its regulatory capacity. Modeled on
Alexander Hamilton Alexander Hamilton (January 11, 1755 or 1757July 12, 1804) was an American military officer, statesman, and Founding Father who served as the first United States secretary of the treasury from 1789 to 1795. Born out of wedlock in Charlest ...
's First Bank of the United States,. the Second Bank was chartered by President
James Madison James Madison Jr. (March 16, 1751June 28, 1836) was an American statesman, diplomat, and Founding Father. He served as the fourth president of the United States from 1809 to 1817. Madison is hailed as the "Father of the Constitution" for hi ...
, who in 1791 had attacked the First Bank as unconstitutional, in 1816 and began operations at its main branch in Philadelphia on January 7, 1817,. managing 25 branch offices nationwide by 1832. The efforts to renew the Bank's charter put the institution at the center of the general election of 1832, in which the Bank's president
Nicholas Biddle Nicholas Biddle (January 8, 1786February 27, 1844) was an American financier who served as the third and last president of the Second Bank of the United States (chartered 1816–1836). Throughout his life Biddle worked as an editor, diplomat, au ...
and pro-bank
National Republicans The National Republican Party, also known as the Anti-Jacksonian Party or simply Republicans, was a political party in the United States that evolved from a conservative-leaning faction of the Democratic-Republican Party that supported John Q ...
led by
Henry Clay Henry Clay Sr. (April 12, 1777June 29, 1852) was an American attorney and statesman who represented Kentucky in both the U.S. Senate and House of Representatives. He was the seventh House speaker as well as the ninth secretary of state, al ...
clashed with the " hard-money"
Andrew Jackson Andrew Jackson (March 15, 1767 – June 8, 1845) was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before being elected to the presidency, he gained fame as ...
administration and eastern banking interests in the
Bank War The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its re ...
. Failing to secure recharter, the Second Bank became a private corporation in 1836,. and underwent
liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
in 1841..


History


Establishment

The political support for the revival of a national banking system was rooted in the early 19th century transformation of the country from simple Jeffersonian agrarianism towards one interdependent with industrialization and finance.. In the aftermath of the
War of 1812 The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of America and its indigenous allies against the United Kingdom and its allies in British North America, with limited participation by Spain in Florida. It bega ...
, the federal government suffered from the disarray of an unregulated currency and a lack of fiscal order; business interests sought security for their government bonds. A national alliance arose to legislate a
national bank In banking, the term national bank carries several meanings: * a bank owned by the state * an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) * in the United States, an ordinary p ...
to address these needs.. The political climate—dubbed the
Era of Good Feelings The Era of Good Feelings marked a period in the political history of the United States that reflected a sense of national purpose and a desire for unity among Americans in the aftermath of the War of 1812. The era saw the collapse of the Fed ...
—favored the development of national programs and institutions, including a
protective tariff Protective tariffs are tariffs that are enacted with the aim of protecting a domestic industry. They aim to make imported goods cost more than equivalent goods produced domestically, thereby causing sales of domestically produced goods to rise, ...
,
internal improvements Internal improvements is the term used historically in the United States for public works from the end of the American Revolution through much of the 19th century, mainly for the creation of a transportation infrastructure: roads, turnpikes, canal ...
and the revival of a Bank of the United States. Southern and western support for a bank, led by Republican nationalists John C. Calhoun of South Carolina and
Henry Clay Henry Clay Sr. (April 12, 1777June 29, 1852) was an American attorney and statesman who represented Kentucky in both the U.S. Senate and House of Representatives. He was the seventh House speaker as well as the ninth secretary of state, al ...
of Kentucky, was decisive in the successful chartering effort. The charter was signed into law by James Madison on April 10, 1816. Subsequent efforts by Calhoun and Clay to earmark the Bank's $1.5 million establishment "bonus", and annual dividends estimated at $650,000, as a fund for internal improvements, were vetoed by President Madison, on
strict constructionist In the United States, strict constructionism is a particular legal philosophy of judicial interpretation that limits or restricts such interpretation only to the exact wording of the law (namely the Constitution). Strict sense of the term ...
grounds. Opposition to a new bank emanated from two interests.
Old Republican The tertium quids (sometimes shortened to quids) were various factions of the Democratic-Republican Party in the United States from 1804 to 1812. In Latin, ''tertium quid'' means "a third something". Initially, ''quid'' was a disparaging term th ...
s, represented by
John Taylor of Caroline John Taylor (December 19, 1753August 21, 1824), usually called John Taylor of Caroline, was a politician and writer. He served in the Virginia House of Delegates (1779–81, 1783–85, 1796–1800) and in the United States Senate (1792–94, 1803 ...
and
John Randolph of Roanoke John Randolph (June 2, 1773May 24, 1833), commonly known as John Randolph of Roanoke,''Roanoke'' refers to Roanoke Plantation in Charlotte County, Virginia, not to the city of the same name. was an American planter, and a politician from Virg ...
, characterized the Second Bank as both constitutionally illegitimate and a direct threat to Jeffersonian agrarianism, state sovereignty and the institution of
slavery Slavery and enslavement are both the state and the condition of being a slave—someone forbidden to quit one's service for an enslaver, and who is treated by the enslaver as property. Slavery typically involves slaves being made to perf ...
, expressed by Taylor's statement that "...if Congress could incorporate a bank, it might emancipate a slave." Hostile to the regulatory effects of the national bank,. private banks—proliferating with or without state charters—had scuttled rechartering of the First Bank in 1811. These interests played significant roles in undermining the institution during the administration of U.S. President
Andrew Jackson Andrew Jackson (March 15, 1767 – June 8, 1845) was an American lawyer, planter, general, and statesman who served as the seventh president of the United States from 1829 to 1837. Before being elected to the presidency, he gained fame as ...
(1829–1837).


Economic functions

The Second Bank was a
national bank In banking, the term national bank carries several meanings: * a bank owned by the state * an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) * in the United States, an ordinary p ...
. However, it did not serve the functions of a modern
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
: It did not set
monetary policy Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often a ...
, regulate private banks, hold their
excess reserves Excess reserves are bank reserves held by a bank in excess of a reserve requirement for it set by a central bank. In the United States, bank reserves for a commercial bank are represented by its cash holdings and any credit balance in an account ...
, or act as a
lender of last resort A lender of last resort (LOLR) is the institution in a financial system that acts as the provider of liquidity to a financial institution which finds itself unable to obtain sufficient liquidity in the interbank lending market when other faci ...
. The Bank was launched in the midst of a major global market readjustment as Europe recovered from the
Napoleonic Wars The Napoleonic Wars (1803–1815) were a series of major global conflicts pitting the French Empire and its allies, led by Napoleon I, against a fluctuating array of European states formed into various coalitions. It produced a period of Fren ...
.. It was charged with restraining uninhibited private bank note issue—already in progress—that threatened to create a
credit bubble An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be ...
and the risks of a financial collapse. Government land sales in the West, fueled by European demand for agricultural products, ensured that a speculative bubble would form. Simultaneously, the national bank was engaged in promoting a democratized expansion of credit to accommodate
laissez-faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
impulses among eastern business entrepreneurs and credit-hungry western and southern farmers. Under the management of its first president William Jones, the Bank failed to control paper money issued from its branch banks in the West and South, contributing to the post-war speculative land boom. When the U.S. markets collapsed in the
Panic of 1819 The Panic of 1819 was the first widespread and durable financial crisis in the United States that slowed westward expansion in the Cotton Belt and was followed by a general collapse of the American economy that persisted through 1821. The Panic ...
—a result of global economic adjustments—the Bank came under withering criticism for its belated tight money policies—policies that exacerbated mass unemployment and plunging property values.. Further, it transpired that branch directors for the
Baltimore Baltimore ( , locally: or ) is the List of municipalities in Maryland, most populous city in the U.S. state of Maryland, fourth most populous city in the Mid-Atlantic (United States), Mid-Atlantic, and List of United States cities by popula ...
office had engaged in fraud and larceny. Resigning in January 1819, Jones was replaced by
Langdon Cheves Langdon Cheves ( September 17, 1776 – June 26, 1857) was an American politician, lawyer and businessman from South Carolina. He represented the city of Charleston in the United States House of Representatives from 1810 to 1815, where he played ...
, who continued the contraction in credit in an effort to stop inflation and stabilize the Bank, even as the economy began to correct. The Bank's reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a protracted
recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...
with mass unemployment and a sharp drop in property values that persisted until 1822. The financial crisis raised doubts among the American public as to the efficacy of paper money, and in whose interests a national system of finance operated.. Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the Bank in the 1830s. The Bank was in general disrepute among most Americans when
Nicholas Biddle Nicholas Biddle (January 8, 1786February 27, 1844) was an American financier who served as the third and last president of the Second Bank of the United States (chartered 1816–1836). Throughout his life Biddle worked as an editor, diplomat, au ...
, the third and last president of the Bank, was appointed by President
James Monroe James Monroe ( ; April 28, 1758July 4, 1831) was an American statesman, lawyer, diplomat, and Founding Father who served as the fifth president of the United States from 1817 to 1825. A member of the Democratic-Republican Party, Monroe was ...
in 1823.. Under Biddle's guidance, the Bank evolved into a powerful institution that produced a strong and sound system of national credit and currency. From 1823 to 1833, Biddle expanded credit steadily, but with restraint, in a manner that served the needs of the expanding American economy.
Albert Gallatin Abraham Alfonse Albert Gallatin (January 29, 1761 – August 12, 1849) was a Genevan–American politician, diplomat, ethnologist and linguist. Often described as "America's Swiss Founding Father", he was a leading figure in the early years o ...
, former Secretary of the Treasury under
Thomas Jefferson Thomas Jefferson (April 13, 1743 – July 4, 1826) was an American statesman, diplomat, lawyer, architect, philosopher, and Founding Fathers of the United States, Founding Father who served as the third president of the United States from 18 ...
and
James Madison James Madison Jr. (March 16, 1751June 28, 1836) was an American statesman, diplomat, and Founding Father. He served as the fourth president of the United States from 1809 to 1817. Madison is hailed as the "Father of the Constitution" for hi ...
, wrote in 1831 that the Bank was fulfilling its charter expectations.


Jackson's Bank War

By the time of Jackson's inauguration in 1829, the Bank appeared to be on solid footing. The Supreme Court had affirmed its constitutionality in '' McCulloch v. Maryland'', the 1819 case which
Daniel Webster Daniel Webster (January 18, 1782 – October 24, 1852) was an American lawyer and statesman who represented New Hampshire and Massachusetts in the U.S. Congress and served as the U.S. Secretary of State under Presidents William Henry Harrison, ...
had argued successfully on its behalf a decade earlier, the Treasury recognized the useful services it provided, and the American currency was healthy and stable. Public perceptions of the national bank were generally positive. The Bank first came under attack by the Jackson administration in December 1829, on the grounds that it had failed to produce a stable national currency, and that it lacked constitutional legitimacy.. Both houses of Congress responded with committee investigations and reports affirming the historical precedents for the Bank's constitutionality and its pivotal role in furnishing a uniform currency. Jackson rejected these findings, and privately characterized the Bank as a corrupt institution, dangerous to American liberties. Biddle made repeated overtures to Jackson and his cabinet to secure a compromise on the Bank's rechartering (its term due to expire in 1836) without success. Jackson and the anti-bank forces persisted in their condemnation of the Bank, provoking an early recharter campaign by pro-bank National Republicans under
Henry Clay Henry Clay Sr. (April 12, 1777June 29, 1852) was an American attorney and statesman who represented Kentucky in both the U.S. Senate and House of Representatives. He was the seventh House speaker as well as the ninth secretary of state, al ...
. Clay's political ultimatum to Jackson—with Biddle's financial and political support—sparked the
Bank War The Bank War was a political struggle that developed over the issue of rechartering the Second Bank of the United States (B.U.S.) during the presidency of Andrew Jackson (1829–1837). The affair resulted in the shutdown of the Bank and its re ...
and placed the fate of the Bank at center of the 1832 presidential election. Jackson mobilized his political base by vetoing the recharter bill and, the veto sustained, easily won reelection on his anti-bank platform. Jackson proceeded to destroy the Bank as a financial and political force by removing its federal deposits, and in 1833, federal revenue was diverted into selected private banks by executive order, ending the regulatory role of the Second Bank. In hopes of extorting a rescue of the Bank, Biddle induced a short-lived financial crisis that was initially blamed on Jackson's executive action. By 1834, a general backlash against Biddle's tactics developed, ending the panic, and all recharter efforts were abandoned.


State bank

In February 1836, the Bank became a private corporation under Pennsylvania law. A shortage of hard currency ensued, causing the Panic of 1837 and lasting approximately seven years. The bank suspended payment from October 1839 to January 1841, and permanently in February 1841. It then started a lengthy liquidation process, complicated by lawsuits, that ended in 1852 when it assigned its remaining assets to trustees and surrendered the state charter.


Branches

The Bank maintained the following branches. Listed is the year each branch opened. *
Augusta, Georgia Augusta ( ), officially Augusta–Richmond County, is a consolidated city-county on the central eastern border of the U.S. state of Georgia (U.S. state), Georgia. The city lies across the Savannah River from South Carolina at the head of its navig ...
(1817, closed 1817) *
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(1817) * Boston, Massachusetts (1817) *
Charleston, South Carolina Charleston is the largest city in the U.S. state of South Carolina, the county seat of Charleston County, and the principal city in the Charleston–North Charleston metropolitan area. The city lies just south of the geographical midpoint o ...
(1817) * Chillicothe, Ohio (1817) *
Cincinnati, Ohio Cincinnati ( ) is a city in the U.S. state of Ohio and the county seat of Hamilton County. Settled in 1788, the city is located at the northern side of the confluence of the Licking and Ohio rivers, the latter of which marks the state line wit ...
(1817) * Fayetteville, North Carolina (1817) *
Lexington, Kentucky Lexington is a city in Kentucky, United States that is the county seat of Fayette County, Kentucky, Fayette County. By population, it is the List of cities in Kentucky, second-largest city in Kentucky and List of United States cities by popul ...
(1817) *
Louisville, Kentucky Louisville ( , , ) is the largest city in the Commonwealth of Kentucky and the 28th most-populous city in the United States. Louisville is the historical seat and, since 2003, the nominal seat of Jefferson County, on the Indiana border ...
(1817) *
Middletown, Connecticut Middletown is a city located in Middlesex County, Connecticut, United States, Located along the Connecticut River, in the central part of the state, it is south of Hartford, Connecticut, Hartford. In 1650, it was incorporated by English settler ...
(1817) *
New Orleans, Louisiana New Orleans ( , ,New Orleans
Merriam-Webster.
; french: La Nouvelle-Orléans , es, Nuev ...
(1817) *
New York City, New York New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
(1817) *
Norfolk, Virginia Norfolk ( ) is an independent city in the Commonwealth of Virginia in the United States. Incorporated in 1705, it had a population of 238,005 at the 2020 census, making it the third-most populous city in Virginia after neighboring Virginia Be ...
(1817) *
Portsmouth, New Hampshire Portsmouth is a city in Rockingham County, New Hampshire, United States. At the 2020 census it had a population of 21,956. A historic seaport and popular summer tourist destination on the Piscataqua River bordering the state of Maine, Portsmou ...
(1817) *
Providence, Rhode Island Providence is the capital and most populous city of the U.S. state of Rhode Island. One of the oldest cities in New England, it was founded in 1636 by Roger Williams, a Reformed Baptist theologian and religious exile from the Massachusetts Bay ...
(1817) *
Richmond, Virginia (Thus do we reach the stars) , image_map = , mapsize = 250 px , map_caption = Location within Virginia , pushpin_map = Virginia#USA , pushpin_label = Richmond , pushpin_m ...
(1817) *
Savannah, Georgia Savannah ( ) is the oldest city in the U.S. state of Georgia (U.S. state), Georgia and is the county seat of Chatham County, Georgia, Chatham County. Established in 1733 on the Savannah River, the city of Savannah became the Kingdom of Great Br ...
(1817) *
Washington, D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...
(1817) *
Mobile, Alabama Mobile ( , ) is a city and the county seat of Mobile County, Alabama, United States. The population within the city limits was 187,041 at the 2020 United States census, 2020 census, down from 195,111 at the 2010 United States census, 2010 cens ...
(1826) *
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(1827) *
Portland, Maine Portland is the largest city in the U.S. state of Maine and the seat of Cumberland County. Portland's population was 68,408 in April 2020. The Greater Portland metropolitan area is home to over half a million people, the 104th-largest metropol ...
(1828) *
Buffalo, New York Buffalo is the second-largest city in the U.S. state of New York (behind only New York City) and the seat of Erie County. It is at the eastern end of Lake Erie, at the head of the Niagara River, and is across the Canadian border from South ...
(1829) *
St. Louis, Missouri St. Louis () is the second-largest city in Missouri, United States. It sits near the confluence of the Mississippi River, Mississippi and the Missouri Rivers. In 2020, the city proper had a population of 301,578, while the Greater St. Louis, ...
(1829) *
Burlington, Vermont Burlington is the most populous city in the U.S. state of Vermont and the seat of Chittenden County. It is located south of the Canada–United States border and south of Montreal. As of the 2020 U.S. census, the population was 44,743. It ...
(1830) *
Utica, New York Utica () is a Administrative divisions of New York, city in the Mohawk Valley and the county seat of Oneida County, New York, United States. The List of cities in New York, tenth-most-populous city in New York State, its population was 65,283 ...
(1830) *
Natchez, Mississippi Natchez ( ) is the county seat of and only city in Adams County, Mississippi, United States. Natchez has a total population of 14,520 (as of the 2020 census). Located on the Mississippi River across from Vidalia in Concordia Parish, Louisiana, N ...
(1830)


Presidents

* William Jones, January 7, 1817 – January 25, 1819 * James Fisher, January 25, 1819 – March 6, 1819 *
Langdon Cheves Langdon Cheves ( September 17, 1776 – June 26, 1857) was an American politician, lawyer and businessman from South Carolina. He represented the city of Charleston in the United States House of Representatives from 1810 to 1815, where he played ...
, March 6, 1819 – January 6, 1823 *
Nicholas Biddle Nicholas Biddle (January 8, 1786February 27, 1844) was an American financier who served as the third and last president of the Second Bank of the United States (chartered 1816–1836). Throughout his life Biddle worked as an editor, diplomat, au ...
, January 6, 1823 – March 1839 * Thomas Dunlap, March 1839 – February 1841 *
William Drayton William Drayton (December 30, 1776May 24, 1846) was an American politician, banker, and writer who grew up in Charleston, South Carolina. He was the son of William Drayton Sr., who served as justice of the Province of East Florida (1765–17 ...
, 1841 * James Robertson, 1841 – March 22, 1852


Terms of charter

The Second Bank was America's national bank, comparable to the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
and the Bank of France, with one key distinction – the United States government owned one-fifth (20 percent) of its capital. Whereas other national banks of that era were wholly private, the Second Bank was more characteristic of a government bank. Under its charter, the Bank had a capital limit of $35 million, $7.5 million of which represented the government-owned share. It was required to remit a "bonus" payment of $1.5 million, payable in three installments, to the government for the privilege of using the public funds, interest free, in its private banking ventures. The institution was answerable for its performance to the U.S. Treasury and Congress. and subject to Treasury Department inspection. As exclusive fiscal agent for the federal government, it provided a number of services as part of its charter, including holding and transfer of all U.S. deposits, payment and receipt of all government transactions, and processing of tax payments. In other words, the Bank was "the depository of the federal government, which was its principal stockholder and customer." The chief personnel for the Bank comprised 25 directors, five of whom were appointed by the President of the United States, subject to Senate approval. Federally appointed directors were barred from acting as officials in other banks. Two of the three Bank presidents, William Jones and Nicholas Biddle, were chosen from among these government directors. Headquartered in Philadelphia, the Bank was authorized to establish branch offices where it deemed suitable, and these were immune from state taxation.


Regulatory mechanisms

The primary regulatory task of the Second Bank, as chartered by Congress in 1816, was to restrain the uninhibited proliferation of paper money (bank notes) by state or private lenders, which was highly profitable to these institutions. In this capacity, the Bank would preside over this democratization of credit,. contributing to a vast and profitable disbursement of bank loans to farmers, small manufacturers and entrepreneurs, encouraging rapid and healthy economic expansion. Historian
Bray Hammond Bray Hammond (November 20, 1886 – July 20, 1968) was an American financial historian and assistant secretary to the Board of Governors of the Federal Reserve System in 1944–1950. He won the 1958 Pulitzer Prize for History The Pulitzer Prize ...
describes the mechanism by which the bank exerted its anti-inflationary influence: Under this banking regime, the impulse towards over-speculation, with the risks of creating a national financial crisis, would be avoided, or at least mitigated. It was just this mechanism that the local private banks found objectionable, because it yoked their lending strategies to the fiscal operations of the national government, requiring them to maintain adequate gold and silver reserves to meet their debt obligations to the U.S. Treasury. The proliferation of private-sector banking institutions – from 31 banks in 1801 to 788 in 1837 – meant that the Second Bank faced strong opposition from this sector during the Jackson administration.


Architecture

The architect of the Second Bank was William Strickland (1788–1854), a former student of
Benjamin Latrobe Benjamin Henry Boneval Latrobe (May 1, 1764 – September 3, 1820) was an Anglo-American Neoclassical architecture, neoclassical architect who emigrated to the United States. He was one of the first formally trained, professional architects in t ...
(1764–1820), the man who is often called the first professionally trained American
architect An architect is a person who plans, designs and oversees the construction of buildings. To practice architecture means to provide services in connection with the design of buildings and the space within the site surrounding the buildings that h ...
. Latrobe and Strickland were both disciples of the
Greek Revival The Greek Revival was an architectural movement which began in the middle of the 18th century but which particularly flourished in the late 18th and early 19th centuries, predominantly in northern Europe and the United States and Canada, but a ...
style. Strickland went on to design many other American public buildings in this style, including financial structures such as the Mechanics National Bank (also in Philadelphia). He also designed the second building for the main U.S. Mint in Philadelphia in 1833, as well as the
New Orleans New Orleans ( , ,New Orleans
Merriam-Webster.
; french: La Nouvelle-Orléans , es, Nuev ...
,
Dahlonega The city of Dahlonega () is the county seat of Lumpkin County, Georgia, United States. As of the 2010 census, the city had a population of 5,242, and in 2018 the population was estimated to be 6,884. Dahlonega is located at the north end of ...
, and
Charlotte Charlotte ( ) is the most populous city in the U.S. state of North Carolina. Located in the Piedmont region, it is the county seat of Mecklenburg County. The population was 874,579 at the 2020 census, making Charlotte the 16th-most populo ...
branch mints in the mid-to-late 1830s. Strickland's design for the Second Bank is in essence based on the
Parthenon The Parthenon (; grc, Παρθενών, , ; ell, Παρθενώνας, , ) is a former temple on the Athenian Acropolis, Greece, that was dedicated to the goddess Athena during the fifth century BC. Its decorative sculptures are considere ...
in
Athens Athens ( ; el, Αθήνα, Athína ; grc, Ἀθῆναι, Athênai (pl.) ) is both the capital and largest city of Greece. With a population close to four million, it is also the seventh largest city in the European Union. Athens dominates ...
, and is a significant early and monumental example of Greek Revival architecture.. 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 In classical Greek architecture, a stylobate ( el, στυλοβάτης) is the top step of the crepidoma, the stepped platform upon which colonnades of temple columns are placed (it is the floor of the temple). The platform was built on a level ...
. On top of these, Strickland placed eight severe
Doric Doric may refer to: * Doric, of or relating to the Dorians of ancient Greece ** Doric Greek, the dialects of the Dorians * Doric order, a style of ancient Greek architecture * Doric mode, a synonym of Dorian mode * Doric dialect (Scotland) * Doric ...
columns, which are crowned by an entablature containing a
triglyph Triglyph is an architectural term for the vertically channeled tablets of the Doric frieze in classical architecture, so called because of the angular channels in them. The rectangular recessed spaces between the triglyphs on a Doric frieze are ...
frieze In architecture, the frieze is the wide central section part of an entablature and may be plain in the Ionic or Doric order, or decorated with bas-reliefs. Paterae are also usually used to decorate friezes. Even when neither columns nor ...
and simple triangular
pediment Pediments are gables, usually of a triangular shape. Pediments are placed above the horizontal structure of the lintel, or entablature, if supported by columns. Pediments can contain an overdoor and are usually topped by hood moulds. A pedimen ...
. 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 a large arched fan window. The building's exterior uses Pennsylvania blue
marble Marble is a metamorphic rock composed of recrystallized carbonate minerals, most commonly calcite or Dolomite (mineral), dolomite. Marble is typically not Foliation (geology), foliated (layered), although there are exceptions. In geology, the ...
, which, due to the manner in which it was cut, has begun to deteriorate due to weak parts of the stone being exposed to the elements. 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 with the earlier, Federal style in architecture used for the First Bank of the United States, which 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 The Corinthian order (Greek: Κορινθιακός ρυθμός, Latin: ''Ordo Corinthius'') is the last developed of the three principal classical orders of Ancient Greek architecture and Roman architecture. The other two are the Doric order ...
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 A baluster is an upright support, often a vertical moulded shaft, square, or lathe-turned form found in stairways, parapets, and other architectural features. In furniture construction it is known as a spindle. Common materials used in its con ...
, and the heavy modillions adorning the pediment give the First Bank an appearance much more like a
Roman villa A Roman villa was typically a farmhouse or country house built in the Roman Republic and the Roman Empire, sometimes reaching extravagant proportions. Typology and distribution Pliny the Elder (23–79 AD) distinguished two kinds of villas n ...
than a Greek temple.


Current building use

Since the Bank's closing in 1841, the edifice has performed a variety of functions. Today, it is part of
Independence National Historical Park Independence National Historical Park is a federally protected historic district in Philadelphia, Pennsylvania that preserves several sites associated with the American Revolution and the nation's founding history. Administered by the National P ...
in Philadelphia. The structure is open to the public free of charge and serves as an art gallery, housing a large collection of portraits of prominent early Americans painted by
Charles Willson Peale Charles Willson Peale (April 15, 1741 – February 22, 1827) was an American Painting, painter, soldier, scientist, inventor, politician and naturalist. He is best remembered for his portrait paintings of leading figures of the American Revolu ...
and many others. The building was designated a
National Historic Landmark A National Historic Landmark (NHL) is a building, district, object, site, or structure that is officially recognized by the United States government for its outstanding historical significance. Only some 2,500 (~3%) of over 90,000 places listed ...
in 1987 for its architectural and historic significance. The
Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...
branch in New York City was converted into the United States Assay Office before it was demolished in 1915. The federal-style façade was saved and installed in the American Wing of the
Metropolitan Museum of Art The Metropolitan Museum of Art of New York City, colloquially "the Met", is the largest art museum in the Americas. Its permanent collection contains over two million works, divided among 17 curatorial departments. The main building at 1000 ...
in 1924.


In popular culture

The Second Bank building was described by
Charles Dickens Charles John Huffam Dickens (; 7 February 1812 – 9 June 1870) was an English writer and social critic. He created some of the world's best-known fictional characters and is regarded by many as the greatest novelist of the Victorian e ...
in a chapter of his 1842 travelogue ''American Notes for General Circulation'', Philadelphia, and its solitary prison:
We reached the city, late that night. Looking out of my chamber-window, before going to bed, I saw, on the opposite side of the way, a handsome building of white marble, which had a mournful ghost-like aspect, dreary to behold. I attributed this to the sombre influence of the night, and on rising in the morning looked out again, expecting to see its steps and portico thronged with groups of people passing in and out. The door was still tight shut, however; the same cold cheerless air prevailed: and the building looked as if the marble statue of Don Guzman could alone have any business to transact within its gloomy walls. I hastened to inquire its name and purpose, and then my surprise vanished. It was the Tomb of many fortunes; the Great Catacomb of investment; the memorable United States Bank.
The stoppage of this bank, with all its ruinous consequences, had cast (as I was told on every side) a gloom on Philadelphia, under the depressing effect of which it yet laboured. It certainly did seem rather dull and out of spirits..


See also

*
Banking in the Jacksonian Era The Second Bank of the United States opened in January 1817, six years after the First Bank of the United States lost its charter. The Second Bank of the United States was headquartered in Carpenter's Hall, Philadelphia, the same as the First Ba ...
*
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
*
Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. The Pani ...
* First Bank of the United States *
History of central banking in the United States This history of central banking in the United States encompasses various bank regulations, from early wildcat banking practices through the present Federal Reserve System. 1781–1836: Bank of North America and First and Second Bank of the Uni ...
* '' McCulloch v. Maryland'' * Panic of 1837 *
List of National Historic Landmarks in Philadelphia There are 67 National Historic Landmarks within Philadelphia, Pennsylvania. See also the List of National Historic Landmarks in Pennsylvania, which covers the 102 landmarks in the rest of the state. Current listings ...
*
National Register of Historic Places listings in Center City, Philadelphia National may refer to: Common uses * Nation or country ** Nationality – a ''national'' is a person who is subject to a nation, regardless of whether the person has full rights as a citizen Places in the United States * National, Maryland, c ...


Notes


References


Bibliography

* *
online review
* * * * * * Feller, Daniel. "The Bank War", in Julian E. Zelizer, ed. ''The American Congress'' (2004), pp 93–111. * . * * * * * * * * * Kahan, Paul. ''The Bank War: Andrew Jackson, Nicholas Biddle, and the Fight for American Finance'' (Yardley: Westholme, 2016. xii, 187 pp. * *
online review
* * * * * * * * * Ratner, Sidney, James H. Soltow, and Richard Sylla. ''The Evolution of the American Economy: Growth, Welfare, and Decision Making''. (1993) * * * * * * 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). * Temin, Peter. ''The Jacksonian Economy'' (1969) * * * *


External links


Second Bank
– official site at Independence Hall National Historical Park
Documents produced by the Second Bank of the United States
on
FRASER Fraser may refer to: Places Antarctica * Fraser Point, South Orkney Islands Australia * Fraser, Australian Capital Territory, a suburb in the Canberra district of Belconnen * Division of Fraser (Australian Capital Territory), a former federal e ...

Andrew Jackson on the Web : Bank of the United States
* {{Authority control Bank buildings in Philadelphia Art museums and galleries in Philadelphia Buildings and structures in Independence National Historical Park Museums in Philadelphia Banks based in Philadelphia Defunct banks of the United States Former central banks Commercial buildings completed in 1824 Bank buildings on the National Register of Historic Places in Philadelphia National Historic Landmarks in Pennsylvania Presidency of Andrew Jackson Presidency of James Madison 14th United States Congress Banks established in 1816 Banks disestablished in 1841 1816 establishments in Massachusetts Defunct companies based in Pennsylvania Financial history of the United States Independence National Historical Park Historic American Buildings Survey in Philadelphia 1820s architecture in the United States Greek Revival architecture in Pennsylvania Neoclassical architecture in Pennsylvania American companies disestablished in 1841