THE JOURNAL OF ECONOMIC HISTORY

VOL. VII MAY 1947 NO. I

Jackson, Biddle, and the Bank of the United States

M ORE than forty years have passed since CatteralFs monograph

I
The Bank of the United States—the B.U.S. as Biddle and others
often called it—was a national institution of complex beginnings, for
its establishment in 1816 derived from the extreme fiscal needs of the
federal government, the disorder of an unregulated currency, and the
promotional ambitions of businessmen.1 The bank had an immense
amount of private business—as all central banks then had and as
many still have—yet it was even more definitely a government bank
than was the Bank of England, the Bank of France, or any other
similar institution at the time. The federal government owned, one
fifth of its capital and was its largest single stockholder, whereas the
capital of other central banks was wholly private. Government owner-
ship of central-bank stock has become common only in very recent
years.2 Five of the bank's twenty-five directors, under the terms of
1
On the organization of the bank, besides R. C. H. Catterall, Second Banl^ of the U.S.
(Chicago: The University of Chicago Press, 1903), see Raymond Walters, Jr., "Origin of the
Second Bank of the U.S.," The Journal of Political Economy, LIH (1945), 115.
2
The Bank of England and the Bank of France came under government ownership in 1945.
The modern term "central bank" was not used nil nearly a century after Biddle's death.
Hamilton used the term "public bank," and the nineteenth-century equivalent was "bank of
issue."

1*
 Bray Hammond
its charter, were appointed by the President of the United States, and
no one of these five might be a director of any other bank. Two of
its three successive presidents—William Jones and Nicholas Biddlc—
were chosen from among these government directors. The charter
made the bank depository of the government and accountable to
Congress and the Secretary of the Treasury.
On this depository relation hinged control over the extension of
credit by banks in general, which is the essential function of a central
bank. The government's receipts arose principally from taxes paid by
importers to customs collectors;3 these tax payments were in bank
notes, the use of checks not then being the rule; the bank notes were
mostly those of private banks, which were numerous and provided the
bulk of the money in circulation; the B.U.S. received these notes on
deposit from the customs collectors and, becoming thereby creditor of
the private banks that issued them, presented them to the latter for pay-
ment. Banks that extended credit properly and maintained adequate
gold and silver reserves were able to pay their obligations promptly
on demand. Those that overextended themselves were not. The
pressure of the central bank upon the private banks was constant,
and its effect was to restrict their lending and their issue of notes. In
this fashion, it curbed the tendency of the banks to lend too much
and so depreciate their circulation.* Its regulatory powers were
dependent on the private banks' falling currently into debt to it. The
regulatory powers now in effect under the Federal Reserve Act depend
upon the opposite relation—that is, upon the private banks' maintain-
ing balances with the Federal Reserve Banks. The private banks
were then debtors to the central bank; they are now creditors. The
regulatory powers of the United States Bank were simpler, more
direct, and perhaps more effective than those of the Federal Reserve
Banks, though they would not be so under present-day conditions.
It was notorious that large and influential numbers of the private
banks and official state banks resented this regulation of their lending
power. All but the more conservative found it intolerable to be let and
8
E . R. Taus, Central Banking Functions of the 1/.5. Treasury, 1789-1941 (New York:
Columbia University Press, 1943), Appendix III and IV; Davis R. Dewey, Financial History of
the U.S. (New York: Longmans, Green and Company, 1931), p. 168; John Spencer Bassctt,
The Life of Andrew Jackson (New York: The Macmillan Company, 1931), p. 586.
4
I use the term "private banks" in preference to the common term "state banks" because it
brings out the essential differences between the central bank and the units of the banking
system regulated by it. I therefore include as private those "state banks" proper owned in
whole or part by state governments; for functionally these "state banks" proper differed little
if any from the private banks.
 Jackson, Biddle, and the United States Bank $
hindered by the dunning of the B.U.S. and forced to reduce their
debts instead of enlarging their loans. Many of them had the
effrontery to insist as a matter of right that they be allowed to pay
the central bank if and when they pleased.5 The effort of various
states, especially Maryland and Ohio, to levy prohibitory taxes on the
United States Bank's branches reflects this desire of the private banks
to escape regulation quite as much as it reflects the states' jealousy of
their "invaded" sovereignty; the efforts were economic as well as
political.6
In 1831, Gallatin commended the bank for its conduct during the
twenties; it had "effectually checked excessive issues" by the state
banks; "that very purpose" for which it had been established had been
fulfilled. On the regulatory operation of the bank, "which requires
particular attention and vigilance and must be carried on with great
firmness and due forbearance, depends almost exclusively the stability
of the currency . . . ." The country's "reliance for a sound currency
and, therefore, for a just performance of contracts rests on that institu-
tion." 7 In 1833 he wrote to Horslcy Palmer, of the Bank of England,
that "the Bank of the United States must not be considered as afford-
ing a complete remedy," for the ills of overexpansion, "but as the best
and most practicable which can be applied"; and its action "had been
irreproachable" in maintaining a proper reserve position "as late as
November 1830."8 Though Gallatin did not say so, this was in effect
praise of Nicholas Biddle's administration of the bank.
The powerful expansion of the economy in the nineteenth century
made it necessary for the regulatory action of the bank to be mostly
one of restraint, but there was occasion also for it to afford ease as
holder of the ultimate reserves and lender of last resort. One of the
first things it did was to end the general suspension that the country
had been enduring for more than two years; and a crucial factor in
the willingness and ability of the private banks to resume payment of
their obligations was the pledge of the United States Bank that it
would support them.9 This, Vera Smith writes, was "a very early

5
R . C. H. Cattcrall, Second Bank, P- 85.
'McCullocA v. Maryland (1819), 4 Whcaton, p. 315; Osborn v. Bank, of the United States
(1824), 9 Wheaton, p. 737. The arguments in these cases were constitutional, not economic.
7
Albert Gallatin, Writings, ed. Henry Adams (Philadelphia: J. B. Lippincott and Company,
1879), HI, 334, 336, 390; II, 426.
8
Ibid., II, 461. Sec also Mies' Weekly Register, XXXV (1828-19), 37.
9
R. C. H. Catterall, Second Ban\, pp. 24-26; American State Papers, Finance (Washington:
Gales and Seaton, 1858), IV, 768-69.
 Bray Hammond
declaration of the view that it is the duty of the central bank to act as
lender of last resort."10
The regulatory functions of the bank were not always well per-
formed. Its first president, William Jones, was a politician who
extended credit recklessly, rendered the bank impotent to keep the
private banks in line, and nearly bankrupted it—all in a matter of
three years. Langdon Cheves put the bank back in a sound condition
by stern procedures that were unavoidably unpopular. When Nicholas
Biddle succeeded Cheves in 1823, the bank was strong in every respect
but good will. Biddle repressed the desires of the stockholders for
larger dividends, keeping the rate down and accumulating reserves.
The art of central banking was not so clearly recognized then as it
has since become, but Biddle advanced it, and with better luck he
might well be memorable for having developed means of mitigating
the tendency to disastrous, periodic crises characteristic of the nine-
teenth century in the United States.11
But Biddle, with all his superior talents, was not very discreet. He
had an airy way of speaking that shocked his more credulous enemies
and did him irreparable harm; and, when he described the functions of
the bank, he contrived to give a livelier impression of its power than
of its usefulness. Once when asked by a Senate committee if the
B.U.S. ever oppressed the state banks, he said, "never": although
nearly all of them might have been destroyed, many had been saved
and still more had been relieved. This was ineffable in a man of
Biddle's exceptional abilities. It put a normal situation in a sinister
and uncouth light. A wanton abuse of regulatory powers is always
possible, and abstention from it is not to be boasted of—any more than
a decent man would boast of not choosing to be a burglar. By talking
so, Biddle made his opponents feel sure he had let the cat out of the
bag. For Thomas Hart Benton he had proved entirely too much—
that he had a dangerous power "over the business and fortunes of
nearly all the people."12 Jackson referred in his veto to Biddle's
remark, and Roger Taney was still shuddering at the disclosure many
years later. He believed then and he believed still, he wrote, that
10
Vera C. Smith, Rationale of Central Banking (London: P. S. King and Son, 1936), p. 40.
11
Statements on Biddle's central-bank policy will be found in Reginald C. McGrane,
Correspondence of Nicholas Biddle (Boston: Houghton Mifflin Company, 1919), pp. 34-36,
5'i 56-58. Catterall discusses the subject admirably in his chapter v, with the limitation that
central banking was no better understood in his day than in Biddle's—if as well. See also J. S
Bassett, Andrew Jackson, pp. 585-86.
12
T. H. Benton, Thirty Years' View (New York: D. Appleton and Company, 1897), I, 159.
 Jackson, Biddle, and the United States Bank 5
there was a scheme to close every state bank in the Union. He believed
"that the matter had been thought of, and that the manner in which
it could be done was well understood." 13 That people believed such
things, Biddle had his own jauntiness, naivete, and political ineptitude
to thank.
II
When Jackson became president in 1829, the B.U.S. had survived
what then seemed its most crucial difficulties. The Supreme Court had
affirmed and reaffirmed its constitutionality and ended the attempts
of unfriendly states to interfere with it. The Treasury had long
recognized its efficient services as official depository. The currency was
in excellent condition. Yet in his first annual message, Jackson told
Congress that "both the constitutionality and the expediency of the
law creating the bank were well questioned by a large portion of our
fellow-citizens, and it must be admitted by all that it has failed in the
great end of establishing a uniform and sound currency."
There is nothing remarkable about Jackson's doubts of the bank's
constitutionality, for he did not defer his own judgment to John
Marshall's nor, in general, had the Supreme Court's opinions attained
their later prestige.14 His statement that the bank had failed in estab-
lishing a good currency is more difficult to understand, for it was
plainly untrue in the usual sense of the words. But he was evidently
using the words in the special sense of locofoco hard-money doctrine,
according to which the only good money was gold and silver; the
Constitution authorized Congress to coin it and regulate its value; the
states were forbidden to issue paper and the federal government was
not empowered to do so. Jackson, wrote C. J. Ingersoll, "considers all
the state banks unconstitutional and impolitic and thinks that there
should be no currency but coin . . . ." 15 There were practical con-
siderations no less important than the legal. It was evident to the
antibank people that banking was a means by which a relatively small
number of persons enjoyed the privilege of creating money to be lent,
for the money obtained by borrowers at banks was in the form of
13
C B. Swisher, Life of Taney (New York: The Macmillan Company, 1935), pp. 166-69.
14
Even Gallatin in 1831 took pains to defend the bank's constitutionality without a
reference to the court's decisions, of which he remarked in a footnote he had not known.
Gallatin, Writings, III, 327. He was in Europe when McCulloch v. Maryland was decided, but
not Osborn v. Banl( of the United States. It is notable that he would discuss constitutionality
without learning till he was through that the Supreme Court had said something on the subject.
15
R. C. McGranc, Correspondence of Biddle, 172. For Bcnton's ideas, see his Thirty Years'
View, I, 436.
 Bray Hammond
the banks' own notes. The fruits of the abuse were obvious: notes
were overissued, their redemption was evaded, they lost their value,
and the innocent husbandman and mechanic who were paid in them
were cheated and pauperized. "It is absurd," wrote Taney, "to talk
about a sound and stable paper currency."16 There was no such thing.
So, in Jackson's opinion, if the United States Bank was not establishing
a metallic currency, it was not establishing a constitutional or sound
and uniform one. His words might seem wild to the contaminated,
like Gallatin and Biddle, but they were plain gospel truth to his sturdy
antibank, hard-money agrarians."
Hard money was a cardinal tenet of the left wing of the Democratic
party. It belonged with an idealism in which America was still a land
of refuge and freedom rather than a place to make money. Its aim
was to clip the wings of commerce and finance by restricting the
credit that paper money enabled them to obtain. There would then
be no vast debt, no inflation, no demoralizing price changes; there
would be no fluctuant or disappearing values, no swollen fortunes,
and no grinding poverty. The precious metals would impose an
automatic and uncompromising limit on the volatile tendencies of
trade. "When there was a gold and silver circulation," said an agrarian
in the Iowa constitutional convention of 1844, "there were no fluctua-
tions; everything moved on smoothly and harmoniously."18 The
Jacksonians were even more devoted to the discipline of gold than
the monetary conservatives of the present century.
There was also a pro-bank, "paper-money wing," which harbored
the Democratic party's less spiritual virtues.10 Its strength lay with
free enterprise, that is, with the new generation of businessmen,
promoters, and speculators, who found the old Hamiltonian order of
the Federalists too stodgy and confining. These were "Democrats by
trade," as distinguished from "Democrats in principle"; one of the
latter wrote sarcastically in the Democratic Review in 1838, "Being a
good Democrat, that is to say, a Democrat by trade (Heaven forefend
that any son of mine should be a Democrat in principle)—being a

18
J. S. Bassett, Correspondence of Andrew Jackson (Washington, D.C.: Carnegie Institution,
IQ
3 ' ) i v > 49 1 ; Benton, Thirty Years' View, I, 436.
17
The principal argument against the bank's constitutionality was not this, of course, but
that Congress had no power to charter a bank outside the District of Columbia.
18
Benjamin F. Shambaugh, Fragments of the Debates of the Iowa Constitutional Conven-
tions of 1844 and 1846 (Iowa City: State Historical Society of Iowa, 1900), pp. 69, 70, 71.
18
Col. Benton on Banks and Currency, Hunt's Merchants' Magazine, XXXVIII (January
1858), 560-61.
 Jackson, Biddle, and the United States Bank 7
good Democrat by trade, he got a snug slice of the public deposites." M
Fifty years before, business had fostered the erection of a strong federal
government and inclined toward monopoly; in the early nineteenth
century it began to appreciate the advantages offered by laissez faire
and to feel that it had more to gain and less to fear from the states
than from the federal government. This led it to take on the coloration
and vocabulary of Jacksonian democracy and to exalt the rugged
individualism of the entrepreneur and speculator along with that of
the pioneer.
The private banks and their friends had helped to kill the first
Bank of the United States twenty years before, but the strength they
could muster against the second was much greater. Herein lies the
principal difference between the situation of the old bank when
Jefferson became president in 1801 and the situation of the second
when Jackson became president in 1829. Both men disapproved of
the national bank and yet were inhibited by its being accepted in their
own party and performing well its evidently important functions.
There were also the differences that Jefferson was more amenable to
reason than Jackson, that he had in Gallatin a better adviser than any
Jackson had, and that the bank was under a more passive manage-
ment in his day than in Jackson's. But of most importance was the
greater pressure the private banks were able to exert in Jackson's time
than in Jefferson's. Between 1801 and 1829 their number had greatly
increased, as had the volume of their business and the demand for
credit. The records indicate that in 1801 there were 31 banks, in 1829
there were 329, and in 1837 there were 788—an increase of 140 per cent
during Jackson's administration alone.21 These banks were associated
to a marked extent with the Democratic party, especially in New York.
Their opposition to federal regulation was therefore far greater in
1829 than in 1801, and it did more for Jackson's victory over the
national bank than did the zeal of his hard-money locofocos.
De Tocqueville wrote that "the slightest observation" enabled one to
see the advantages of the B.U.S. to the country and mentioned as
most striking the uniform value of the currency it furnished. But the
private banks, he said, submitted with impatience to "this salutary
control" exercised by the B.U.S. They bought over newspapers. "They
20
The United States Magazine and Democratic Review (Washington: Langtree and
O'Sullivan, December 1838), III, 368. Alexander Hamilton's son, James A. Hamilton, a friend
of Jackson and a speculator in New York real estate, seems to have been a Democrat by trade.
21
United States Comptroller of the Currency, Annual Report, 1916, pp. 913-14.
 8 Bray Hammond
roused the local passions and the blind democratic instinct of the
country to aid their cause . . . ." 22 Without them, it is doubtful if the
Jacksonians could have destroyed the B.U.S.
The Jacksonian effort to realize the hard-money ideals was admir-
able, viewed as Quixotism. For however much good one may find in
these ideals, nothing could have been more unsuited than they were to
the American setting. In an austere land or among a contemplative
and self-denying people they might have survived but not in one so
amply endowed as the United States and so much dominated by an
energetic and acquisitive European stock. Nowhere on earth was the
spirit of enterprise to be more fierce, the urge for exploitation more
restless, or the demand for credit more importunate. The rise of these
reprobated forces spurred the agrarians, and as business itself grew
they came to seek nothing less than complete prohibition of banking.23
Yet they chose to destroy first the institution which was curbing the
ills they disapproved, and to that end they leagued with the perpetra-
tors of those ills.24 Jackson made himself, as de Tocqueville observed,
the instrument of the private banks.25 He took the government's funds
out of the central bank, where they were less liable to speculative
use and put them in the private banks, where they were fuel to the
fire.26 He pressed the retirement of the public debt, and he acquiesced
in distribution of the federal surplus.27 These things fomented the very
evils he deplored and made the Jacksonian inflation one of the worst
in American history. They quite outweighed the Maysville veto, which
checked federal expenditures on internal improvements, and the specie
circular, which crudely and belatedly paralyzed bank credit.
As a result, Jackson's presidency escaped by only two months from
22
Alexis de Tocqueville, Democracy in America, ed. Phillips Bradley (New York: Albert A.
Knopf and Company, 1945), I, 409.
23
In a number of western states and territories they achieved prohibition: in Arkansas,
Illinois, Iowa, Wisconsin, California, and Oregon—though in the last two the impetus was
more than agrarian.
24
T. H . Benton, Thirty Years' View, I, 158.
25
Alexis de Tocqueville, Democracy in America, I, 409.
26
Taney made himself ridiculous: he told the pet banks the government funds would
enable them to lend more, he gave them checks on the B.U.S. to protect them from the monster,
and then he helplessly asked them not to use the checks.—R. C. H . Catterall, Second Bank., pp.
302-5. United States Secretary of the Treasury, Annual Reports (1833), III, 369; 23d Congress,
1st Session, Senate Document No. 16, 321 ff.
27
Retirement of the public debt was inflationary in that it spread a feeling of elate satisfac-
tion and closed a field for conservative investment. Gallatin had thought the retirement would
be a good thing but later found to his dismay that it was "a signal for an astonishing increase
in the indebtedness of the community at large."—Henry Adams, Life of Albert Gallatin
(Philadelphia: J. B. Lippincott and Company, 1879), p. 656.
 Jackson, Biddle, and the United States Bank 9
ending like Hoover's in 1933. Far from reaching the happy point
where the private banks could be extirpated and the hands of the
exploiters and speculators could be tied, Jackson succeeded only in
leaving the house swept and garnished for them; and the last state of
the economy was worse than the first. He professed to be the deliverer
of his people from the oppressions of the mammoth—but instead he
delivered the private banks from federal control and his people to
speculation. No more striking example could be found of a leader
fostering the very evil he was angrily wishing out of the way.28
But this was the inevitable result of the agrarian effort to ride two
horses bound in opposite directions: one being monetary policy and
the other states' rights. Monetary policy must be national, as the
Constitution doubly provides. The agrarians wanted the policy to be
national, but they eschewed the practicable way of making it that, and,
instead of strengthening the national authority over the monetary
system, they destroyed it. Where they were unencumbered by this
fatal aversion to centralized power, they accomplished considerable.
In Indiana they set up an official State Bank, with branches, which
from 1834 to 1853 was the only source of bank credit permitted and
yet was ample for all but the most aggressive money-makers, who
finally ended its monopoly. In Missouri, they established the Bank
of Missouri, with branches, a state monopoly which lasted from 1837
to 1857, when it too succumbed to free enterprise. And in Iowa,
another monopoly, the Bank of Iowa, with branches, was in operation
from 1858 till 1865, when free banking penetrated the state under
authority of the National Bank Act. These instances indicate that if
the hard-money agrarians had had a conception of national govern-
ment less incompatible with their social purposes, they might have
tempered rather than worsened the rampant excesses of nineteenth-
century expansion that so offended them.29
But as it was, they helped an acquisitive democracy take over the
conservative system of bank credit introduced by Hamilton and by
28
See a contemporary English observer, "Causes and Consequences of the Crisis in the
American Trade," Edinburgh Review, LXV (July 1837), 227-28. The impetus given new
banks by the prospect of closing the B.U.S. was observed everywhere. Benton exclaimed
that he had not joined in putting it down in order "to put up a wilderness of local banks."—
34th Congress, 2d Session, January 1837, Register of Debates, p. 610. See also Jabez Hammond,
History of Political Parlies in New Yor\ (Coopcrstown: H. and E. Phinncy, 1846), II, 434, 489.
29
See Hugh McCulloch, Men and Measures of Half a Century (New York: Charles Scribner's
Sons, 1889); John Ray Cable, The Bank, of the State of Missouri (New York: Columbia Uni-
versity. Press, 1923); Howard H. Preston, History of Banking in Iowa (Iowa City: State Histori-
cal Society of Iowa, 1922).
io Bray Hammond
the merchants of Philadelphia and New York and limber it up to
suit the popular wish to get rich quick. Wringing their hands, they
let bank credit become the convenient key to wealth—the means of
making capital accessible in abundance to millions of go-getting
Americans who otherwise could not have exploited their natural
resources with such whirlwind energy. The excesses of that energy
have forced the Jacksonian hard-money heroics to be slowly undone:
the federal government's authority over money, the Treasury's close
operating contact with the banking system, and the central-bank
controls over credit have been haltingly restored. Credit itself, in the
surviving American tradition, is not the virus the agrarians held it
to be but the lifeblood of business and agriculture, and the Jacksonian
hard-money philosophy has been completely forgotten, especially by
Jackson's own political posterity.
Ill
Jackson had not committed himself against the bank during the
early part of his first term but worried both those who wanted him
to support recharter and those who wanted him to prevent it. In
November 1829 he was friendly to Biddle and assured him that he had
no more against the B.U.S. than against "all banks." The next month
he slurred the bank in his message to Congress. In 1831 when the
cabinet was changed, two important portfolios went to friends of
Biddle: Livingston became Secretary of State and McLane Secretary
of the Treasury. Both wanted the bank continued and. hoped to
influence Jackson. Biddle deferred to their hopes, but the tension was
evidently too severe for him. The bank's enemies were growing more
provocative, and in the summer of 1831 his brother, a director of the
bank's St. Louis branch, was killed in a duel, more than usually
shocking, which arose from the controversy over recharter.80 What-
ever the reasons, he let impatience get the upper hand and decided
that the bank, without further temporizing, should ask Congress that
the charter be renewed.81
Jackson was offended by this direct action, and notwithstanding
improvements in the new charter and concessions to his views, he
vetoed the bill of renewal. The economic reasoning of the veto message
was, in Catterall's. language, "beneath contempt," and the most
80
St. Louis Beacon, September i, 1831, September 12, 1831; Nilet' Weekly Register, Sep-
tember 17, 1831, p. 37. The duel was fought with pistols at five feet, Major Biddle being
nearsighted, and each man killed the other.
81
R. C. H. Catterall, Second Bank, PP- »M ff.
 Jackson, Biddle, and the United States Bank 11
appealing allegations in it were "demonstrably and grossly false."S2
Biddle was deluded enough to have 30,000 copies printed and dis-
tributed in the bank's own interest. One may regard this as evidence
of contempt for Jackson or of a faith in the democracy as sincere as
Jackson's own; but it is also evidence of the limitations on Biddle's
political sense. In the election that fall the bank was the leading issue,
and hopes for recharter went to nothing with Jackson's overwhelming
majority. Jackson's purpose now was to stop using the bank as govern-
ment depository. How firmly accepted it was in Washington as the
peculiar agency of the government is indicated by the resistance he
encountered. He had to get rid of two Treasury heads successively
before he found a third who would execute his wishes, the law giving
only the Secretary of the Treasury the power to remove the govern-
ment's deposits from the bank; and he had also to disregard a House
resolution declaring that the government deposits were safe as they
were.
With loss of the deposits, the bank lost the means of regulating the
private banks' extension of credit. Biddle had made enough mistakes
already, but he now made the fatal one of failing to resign and let the
bank be liquidated; there is a limit beyond which the head of a
central bank cannot decently go against the head of the government,
even when he is right and the head of the government is wrong.
Moreover, although a central bank is a very useful institution, it never
possesses the kind of virtues that count in conflict against an intensely
popular leader. By resigning, Biddle would have stultified Jackson and
justified himself, as it turned out; for when the panic came in 1837,
Jackson would have got the blame, with considerable justice. Further-
more, Biddle would have spared himself a tragic end. The bank was
in a better condition than it came to be later, and conditions were
much more favorable for liquidation, in spite of the recession of
1833-1834. Incidentally, this recession was produced, it was averred,
by a vindictive curtailment of the bank's loans. There certainly was
resentment mixed into the bank's policy, but on the other hand, the
bank could not go out of existence, as its enemies desired, without cur-
tailing its credit, and curtailment is always unpopular, scarcely less in a
period of general expansion than in one of depression.
Instead of going out of existence the bank became a private cor-
poration under Pennsylvania charter in February 1836, a fortnight
12
Ibid., p. 139.
 12 Bray Hammond
before its federal charter expired.33 A little more than a year later the
panic of 1837 broke. It began May 10 and involved all the banks in the
country, about 800 in number, with an aggregate circulation of
$150,000,000 and deposits of $125,000,000. It precipitated three distinct
monetary programs—one of hard money by the anti-bank administra-
tion in Washington, one of easy money by Biddle in Philadelphia, and
one of convertibility by the banks of Wall Street under the sage but
incongruous leadership of the venerable Jeffersonian, Albert Gallatin.
The administration, with Van Buren now president, took the oppor-
tunity to urge an independent Treasury system, with complete
"divorce of bank and state." Its course was that urged by Jackson, who
wrote, July 9, 1837:
Now is the time to separate the Government from all banks, receive and
disburse the revenue in nothing but gold and silver coin, and the circulation of
our coin through all public disbursements will regulate the currency forever
hereafter. Keep the Government free from all embarrassments, whilst it leaves
the commercial community to trade upon its own capital, and the banks to accom-
modate it with such exchange and credit as best suits their own interests—both
being money making concerns, devoid of patriotism, looking alone to their own
interests—regardless of all others. It has been, and ever will be a curse to the
Government to have any entanglement or interest with either, more than a ,
general superintending care of all.34

Wall Street paid little attention to this program but set about
preparations to resume specie payments as soon as possible, getting its
own house in order and urging the banks elsewhere to send delegates
to a convention "for the purpose," in Gallatin's words, "of agreeing
on a uniform course of measures and on the time when the
resumption should take place."35
Nicholas Biddle took a course opposed to that of both Wall Street
and the administration. He demanded that the Treasury scheme be
abandoned and the specie circular repealed. He contended that
Jackson's policies were responsible for the financial distress and that
the basic condition of recovery was their repudiation by Congress. Till
these things were done, the banks should not resume redemption
33
The authorized capital of the bank under Pennsylvania charter was $35,000,000, as it
had been under national charter. It appears, however, that the shares ($7,000,000 par) held by
the government under the national charter were not reissued to new owners and that the
actual paid-in capital of the Pennsylvania corporation was only $28,000,000.—John J. Knox,
History of Banking (New York: Bradford, Rhodes, and Company, 1903), pp. 78-79.
34
J. S. Bassett, Correspondence of Jackson, V, 495, 498, 500, 504 ff.; Condy Raguet,
Financial Register, II (Philadelphia: Adam Waldie, 1838), 58.
35
Albert Gallatin, Writings, III, 398.
 Jackson, Biddle, and the United States Bank 13
of their notes. Wall Street's program he denounced as premature
and sacrificial. He advocated instead an active and flexible policy that
should be remedial for the prostrate economy—that should check the
credit contraction and the fall of prices. His own objects during the
past eighteen months, he wrote James Gordon Bennett, October 1838,
had been "to sustain the national character abroad by paying our debts
and at the same time to protect the securities and the staples of the
country from the ruinous depreciation to which they were inevitably
sinking."36 It was evident to him, he wrote John Quincy Adams in
December, "that if resort was had to rigid curtailments, the ability to
pay would be proportionally diminished; . . . . the only true system
was to keep the country as much at ease as consisted with its safety, so
as to enable the debtors to collect their resources for the discharge of
their debts."ST Lenity for the banks would mean lenity for their
debtors, foreclosures and bankruptcies would be avoided, and values
protected from collapse. Suspension, he had already said, was "wholly
conventional between the banks and the community" and arose from
"their mutual conviction that it is for their mutual benefit."88
The situation was one in which the more conservative settled back
to let deflation, as it came to be called a century later, run its bitter
course; and the hard-money agrarians sardonically joined them in
hoping for the worst. But both the agrarians and Wall Street testified
to the popularity of Biddle's ideas. Governor Ford of Illinois observed,
with the sarcasm of a hard-money Democrat, that although the banks
owed more than they could pay and although the people owed each
other and the banks more than they could pay, "yet if the whole people
could be persuaded to believe the incredible falsehood that all were
able to pay, this was 'confidence.'"S9 In Wall Street it was said that
suspension made lawbreakers of every one. "Instead of the permanent
and uniform standard of value provided by the Constitution, and by
which all contracts were intended to be regulated, we have at once
fifty different and fluctuating standards, agreeing only in one respect,
that of impairing the sanctity of contracts."40 The believers in Biddle
were themselves eloquent in the new faith. Following the later
89
Presidents' Letter Book, No. i, 542, Biddle MSS, Library of Congress.
87
29th Congress, 1st Session, House Document No. 3x6, p. 405.
88
Condy Raguet, Financial Register, I, 342—46.
89
Thomas Ford, History of Illinois (Chicago: S. C. Griggs and Company; N e w York:
Ivison and Phinney, 1854), p. 227.
40
Report of delegates to the Bank Convention, New York, November 1837; Condy Raguet,
Financial Register, I, 229.

Vol. 7
5
14 Bray Hammond
debacle of the B.U.S., the Philadelphia Gazette said: "The immediate
effect of the suspension will be an ease in the money market, a cessa-
tion of those cares and disquietudes with which the business men of
our community have been annoyed The great error . . . . to
which all subsequent errors are in a measure to be traced was in the
premature resumption in August 1838 The banks are just as
good, and better and more solid, under a season of suspension as under
its opposite."41
Meanwhile, the New York banks had succeeded in resuming pay-
ment of their obligations, May 10, 1838, the anniversary of the sus-
pension. This was a real hard-money achievement, due largely to
Gallatin and the Bank of England, in which the professedly hard-
money administration had little if any part. Instead it had to violate
with its eyes open the professions that Jackson had violated without
knowing what he was doing. While still trying to distribute a federal
"surplus" which had turned into a deficit, it had to resort to issues of
Treasury notes, which its hard-money zealots believed unconstitutional.
It had to go still further and tolerate what Biddle had demanded: the
specie circular was repealed in May 1838, the subtreasury bill was
defeated in June, and in July the Treasury had to accept—to its sub-
stantial relief—a credit of four to five million dollars on the books
of the Bank of the United States in anticipated payment of amounts
due the government in liquidation of its shares.42 This last transaction
made the bank a depository of the government some five years after
Jackson had ordered that its predecessor, a better institution, cease to
be used as depository.
By the fall of 1838, banks everywhere were back on a specie basis,
and, although this was mainly due to the efforts of Wall Street and
Albert Gallatin, it was Biddle who had the prestige. He was riding
on the crest. "All that it was designed to do has been done," he wrote
John Quincy Adams in December 1838; and he was about to retire.43
Two months later, February 1839, he was Van Buren's guest of honor
41
Philadelphia Gazette, October 10, 1839.
42
These represented payment of $7,900,000 to the government for its stock in the bank.
This sum included a premium of about $1,000,000, besides which the government had
received dividends of over $7,000,000 during the twenty years bf the bank's existence. The
net gain to the government from its original investment of $7,000,000, which it paid for
in bonds, is estimated by Knox at $6,000,000 and by Cattcrall at $8,000,000—John J. Knox,
History of Banking, p. 79; R. C. H. Catterall, Second Bank., P- 474- In the settlement for the
government stock, agreed upon in 1837 (Catterall, Second Bank., pp. 373-75), the administration
had held out for a premium in a way which indicated it had no doubt of the bank's solvency.
48
29th Congress, 1st Session, House Document No. 226, p. 408.
 Jackson, Biddle, and the United States Bank 15
at the White House. "This dinner went off very well," according to
James A. Hamilton, "Biddle evidently feeling as the conqueror. He
was facetious and in intimate converse with the President." ** A month
later Biddle retired from the bank, its affairs being, he said, in a state
of great prosperity and in able hands.45 The same day the directors
were unanimous in describing him as one who had "performed so
much and so faithfully" and was leaving the bank "prosperous in all
its relations . . . . and secure in the respect and esteem of all who
are connected with it in foreign or domestic intercourse."48
Six months later, in the fall of 1839, the bank suspended payment
of its obligations. It resumed and then suspended again. In 1841, after
two years of dismayed inquiry and recrimination, it was assigned to
trustees for liquidation.
The stockholders were stunned, and then they turned on Biddle.
In the summer of 1840 he was told that he owed the bank an "over-
advance" of about $320,000 on an old account. This he denied. Never-
theless, "though he did not recognize the claim" and although
"neither law or equity made it necessary to pay," he did so—mostly in
Texas bonds which were accepted at more than market value. The
stockholders next turned to litigation and thereafter seem to have kept
Biddle continuously in the courts. In January 1842, he and former
associates in the bank were arrested on charges of criminal conspiracy
and put on $10,000 bail each. The charge was that they had conspired
"to cheat and defraud the bank by obtaining therefrom large advances
upon shipments of cotton to Europe," and "by the unlawful receipt
and expenditure of large sums of money, the application of which is
not specified upon the books."4T The court of General Sessions was
occupied two weeks with habeas corpus hearings, twenty witnesses
being examined and "all the books and papers of the bank brought
into court, where they underwent a most searching investigation."
Biddle's attorneys let his case stand on the evidence of the prosecutors.
"As soon as the testimony for the prosecution was finished, the counsel
for Mr. Biddle offered to leave the matter to the court without argu-
ment." 48 The court found evidence lacking that the acts charged
44
R. C. McGrane, Correspondence of Biddle, p. 337; Reminitcenses of James A. Hamilton
(New York: Charles Scribncr's Sons, 1869), p. 312.
"Mies' Weekly Register. LVI (April 6, 1839), p. 84.
48
29th Congress, 1st Session, House Document No. 226, p . 486.
47
29th Congress, 1st Session, House Document No. 226, 4119 &., 475 ff.; also opinion of
Judge Barton, Philadelphia Inquirer, May 10, 1842.
48
Philadelphia Public Ledger, April 11, 1842.

2 Vol. 7
 16 Bray Hammond
involved fraud; for they were known to the directors and approved
by them. Of any fraudulent coalition it found nothing to justify even
a reasonable suspicion.40 Two judges concurred in this decision; one
dissented.
A few weeks later another suit was instituted. The stockholders
filed a bill of equity in which they asked that Biddle and one of his
former associates be required to account for $400,000 of the bank's
funds. The bill was dismissed December 1844, the court holding that
information which might incriminate the defendants could not be
required of them.50 But Biddle was no longer living. He had died ten
months before, February 27, 1844, aged fifty-eight.

IV '
The failure of the B.U.S. leaves two questions one would like to
have answered: What was the actual condition of the bank? How
responsible was Biddle for it? The Jacksonians had easy answers, of
course, and jeered triumphantly; matters had proved to be even worse
than they had said, Biddle had known the bank was rotten, and
having enriched himself he had striven to leap clear in time but had
been caught. The Democratic press was hot with invective and ribald
ridicule of the great Regulator, the old Nick, the prestidigitatorial
wizard who had crowned a career of astounding performances by
consummately destroying everything he had done, and himself with
it.51
To say with Biddle's political enemies that the bank was "rotten"
is putting it both vigorously and vaguely. No one can be precise in
such a matter, for in a long and complicated liquidation involving
suits and technical decisions respecting the admissibility of claims, the
completeness of the settlement must be subject to interpretation. But,
according to a trustee quoted by Knox, the creditors were paid in full,
principal and interest, though the bank's capital was entirely absorbed,
and the stockholders got nothing.52 This would mean a shrinkage of
about one fourth of the value of the bank's assets, roughly speaking.
The 7,000 bank failures in the United States in the ten years, 1921-1930,
entailed estimated losses of about one third of the total deposit
49
Philadelphia Public Ledger, April 30, 1842. The court had much to say of "the singularly
loose method" by which the directors had conducted the business of the corporation.
s° Bank of the United States v. Biddle, Parsons' Select Cases in Equity (Philadelphia, 1888),
II, 33 B-
51
Democratic Review, III (December 1838), 372-73.
62
John J. Knox, History of Banking, p. 79.
 Jackson, Biddle, and the United States Bank 17
liabilities.88 The comparison is crude, but I think it warrants the
opinion that the condition of the B.U.S. was rotten only in a hyper-
bolical sense. Moreover, it is to be borne in mind that values usually
diminish in liquidation, that the portfolio to be liquidated was the
country's largest, and that the process, which ran to 1856, had to be
undertaken in a period when buyers were not eager nor prices buoyant.
The stockholders in 1841 insisted to the legislature that the bank
could pay all its creditors and requested lenity so that losses might be
minimized.54 These things make me think that the bank in 1839 may
have been in a situation little if any worse than that which Jones had
got its predecessor into twenty years before and from which Cheves
rescued it.
As for the second question—Biddle's responsibility—it seems to me
clear that policies put into effect by him led to the bank's failure but
that he had no realization or suspicion of what was developing. The
policies included prodigal loans on stocks, especially to officers and
directors of the bank, heavy investments in corporate stocks and
speculative bonds, and purchases of cotton and other agricultural
commodities for export. The cotton transactions were undertaken in
the emergency of 1837 as a means of sustaining domestic commodity
prices and providing European exchange. They succeeded initially,
but once begun they were hard to stop, and they produced loss, litiga-
tion, and recrimination that was probably more damaging to Biddle
himself than to the bank. The loan and investment policy was begun
as early as 1835 when it looked as if the bank would have to liquidate:
the active assets were converted into loans on stocks in preparation for
a long period of liquidation. But when the Pennsylvania charter was
obtained, the policy was not abandoned. Instead it was adapted to the
vaster prospects of manifest destiny and empire building. Loans were
made with a lax grandiosity. "It seems to have been sufficient," accord-
ing to a stockholders' committee report later, "to obtain money on
loan, to pledge the stock of 'an incorporated company', however
remote its operations or uncertain its prospects." Partly from choice
and partly from the extortionate requirements of its charter—which
Biddle should never have accepted—the bank also became the
owner of such stocks outright; in 1840 it had shares in more than
twenty other banks, some of which it wholly controlled, and great
holdings in railways, toll bridges, turnpikes, and canals, besides
58
Federal Deposit Insurance Corporation, Annual Report (Washington, 1940), p. 66.
s
* 29th Congress, 1st Session, House Document No. 226, p. 533.
2 *
 18 Bray Hammond
speculative bonds issued to finance "public improvements."85 These
investments immobilized the bank's funds so that it was without active
means to repay the government for its stock, to honor its $20,000,000
of circulating notes, which soon began to be rapidly presented for
redemption, and to meet its charter obligations, which in five years
made it divert more than a third of its capital "to purposes of the
state." To meet these requirements, the bank was driven into the
market as borrower, both at home and abroad. These borrowings were
begun by Biddle, and his successors turned to them more and more.
Hence the bank came to be progressively incurring new obligations
harder to meet than the old. The pressure mounted swiftly, so that a
situation of apparent comfort in the spring of 1839 had passed into one
of agony in the fall. These were the six months between Biddle's
retirement and the bank's suspension. The bank had for years been
growing more and more illiquid, but the condition had remained
concealed by confidence. Once the illiquidity was suspected, however,
the bank's creditors woke up with a start, and its obligations became
instantly menacing. The suddenness of the change depended not on
existence of the condition but on recognition of it.
According to one view, Biddle cannot be blamed for the bank's
failure—it happened six months after he had retired. Well, granted
that Biddle was gone, the bank was in the hands of successors who
besides being heirs to his policies had been trained in his school. And
this school, according to the evidence of stockholders' reports and court
records, was one of extreme administrative inefficiency. The directors,
dazzled by Biddle, knew nothing and approved everything. There
were special procedures for special transactions, items being carried
in the teller's drawer till it was expedient to post them. Accounts of
the old bank were continued on the books of the new as if the cor-
porate continuity was unbroken; and the notes of the old were kept
in circulation by the new—a practice which particularly outraged
Gallatin. It was in this atmosphere that Biddle's successors learned to
manage the bank, and if they came to grief it cannot be said that it

05
Laws of Pennsylvania 1835-36, p. 43; 29th Congress, 1st Session, House Document No. 226,
p. 532. See report of the stockholders' committee, April 3, 1841, 29th Congress, 1st Session,
House Document No. 226, esp. pp. 414-16, 425 6. This report confirms, it seems to me, the
opinion of Judge Barton a year later. I do not go into the cotton transactions, which Judge
Barton discusses at length, because to discuss them adequately takes too much space. They
show Biddle's audacity, ingenuity, and casuistry, but it is not clear that they cost the bank
much, except indirectly by deterioration of management. The loan policy, though less irregular,
did the bank more direct damage.
 Jackson, Biddle, and the United States Bank 19
was merely because they had not his ability. He would have come to
grief himself.58
That Biddle must bear responsibility for the bank's condition is one
thing; but that he had a guilty consciousness of its condition is quite
another. Although the tradition of his dishonesty is held both by the
Jacksonian partisans and by some scholars, I think it rests on a trite
and stiffly moralistic view of the facts. If he realized how seriously
wrong things were, it was an instance of objective analysis and cold
self-appraisal unique in his career. I cannot believe him capable of it.
He was eminently of a sanguine disposition, as is emphasized in the
characterization of him by Catterall, who has given him more atten-
tion than any other historian. Caution and modesty were probably
never among his more conspicuous virtues, and Jackson's attack did
not enhance them. In the years 1836 to 1839, when he was laying down
a new course for the bank, he was at the height of his career, it then
seemed, and flushed with victory. He had blundered when he forced
the issue of recharter in 1832, and Jackson had whipped him in the
elections that year, in the veto, and in the removal of the deposits in
1833. But by 1838 he seemed to have retrieved his blunder and defeat.
He had found sanctuary for the bank in the Pennsylvania jurisdiction,
where Jackson could only gnash his teeth at it. He could point scornr
fully at the situation compounded of the panic of 1837, the specie
circular, and distribution of the federal surplus. By 1839 he was the
honored guest of Van Buren in the White House, and he could boast
that the bank was again a government depository, that the inde-
pendent Treasury scheme was rejected, and that the specie circular
was repealed. He had triumphed over the Jacksonians on the points he
cared most about. He even claimed credit for resumption, patronized
Wall Street, and acted as the impresario of national monetary policy.
It was in the fatuous mood of wishful thinking and expansive imagina-
tion stimulated by these illusive developments that he administered
the bank after the failure of Jackson's attempt to annihilate him.
If Biddle, at the height of his success in the winter of 1838-1839,
examined his achievements objectively and concluded that all he had
done mounted up to either a colossal fraud or a colossal mistake, he
must have been a very remarkable character indeed. Yet that is what
the tradition of his moral guilt requires one to believe. I find more
56
For some account of the bank's methods, see Sister M. Grace Madeleine, Monetary and
Banking Theories of Jacksonian Democracy (Philadelphia: The Dolphin Press, 1943), chaps, iv
and v. The author seems to believe Biddle morally culpable.
20 Bray Hammond
credible the less dramatic possibility that, being a man of very sanguine
susceptibilities, he was simply carried away by success and self-con-
fidence, by the grand scale of his activities, and by the daily exercise
of more power, as he put it, than the President of the United States
possessed. I believe he had lost the faculty of recognizing his own
mistakes. The series of letters he wrote in 1841—prolix, specious,
declamatory compositions in which he unconvincingly insisted that
the bank had been in sound condition when he left it—seem to me
the pathetic efforts of a man confounded by other things than guilt:
by surprise, incredulousness, grief, anxiety, and shock.57 His friends
were at no less a loss; the most they could say in his favor was to
protest at those who had been his sycophants while hoping to prosper
but who turned against him with a "malicious prosecution" when
their common fortunes collapsed.58
The hostility of Jackson to the Bank of the United States was in the
first instance a matter of principle, the bank belonging to a monetary
system and to a theory of federal powers which he disapproved; but
later he and his followers could allege also that the bank was rotten
and Biddle dishonest. That allegation was, in fact, emphasized more
than the original principle. But if the bank was not rotten and Biddle
was not dishonest, then what may be called the moral grounds for
Jackson's action disappear leaving no defense except in charity
to his good intentions. All he did was destroy a wisely developed
monetary system. The administration of that system by the B.U.S.
was admirable but might have been strengthened and improved had
not Jackson's views been so radical and his temper so intransigent. In
particular, had his demoralizing attack never been made Biddle would
not have been stimulated to undertake his later grandiose and tragic
course. But the blame must be shared by Biddle. The fury and the
folly of these two ruined an excellent monetary system—as good as
any the country has ever possessed—and left a reckless, booming
anarchy.
When the career of Nicholas Biddle is given the study its importance
deserves, it may appear that the earlier part of it, when he was a
central banker, was something less than brilliant and that the later
part, when he was an empire builder, was something worse than
overweening. But, as it is, the evidence indicates an inventive, facile,
dynamic person—vain and not too painfully honest under pressure—
57
29th Congress, 1st Session, House Document No. 226, pp. 475-516.
58
Philadelphia Public Ledger, April 1, 1842.
 Jackson, Biddle, and the United States Bank 21
who encountered a bigoted interference with his extremely able
management of an institution purposing to restrain the inflationary
abuse of bank credit; who naively trusted the Tightness of his position,
contemned his adversary, defied him, and, after a smart defeat which
he refused to acknowledge, achieved an illusory victory; who then,
with overblown confidence in his own judgment, in the economic
future of the country, and in the alchemic powers of bank credit,
committed himself to empire building; who did things the ingenious
if not the right way; and who reckoned on a faster and less fluctuant
growth than the country actually had. In all this he went with the
times. When an opposition that was locofoco on one side and laissez
faire on the other overcame him, he joined the latter and likelier of
the two. Having been stripped of the Harniltonian garments of
central control, he gladly put on the gayer ones of free enterprise. Yet
Biddle was attracted more by the statesmanship of enterprise than by
enterprise itself. As a central banker, his policy had been governed
properly by public interest rather than profit.59 As empire builder also,
he led the bank into affairs of national scope and purpose.00 He upheld
the nation's foreign financial obligations. He intervened with both
parties on behalf of Texas, whose government he had financed.01 He
resisted Jackson's monetary measures with a determination more
patriotic than discreet. His retirement from the bank at the age of
fifty-three must have been greatly influenced, and very reasonably, by
political ambitions. Only a few weeks before announcing that he
would retire, he had been advised by Thomas Cooper that his can-
didacy for president of the United States was not immediately prac-
ticable because of the "prevailing ignorance and prejudice about
banks"—the general suspension being still a recent matter—and that
"some years hence" prospects might be better.02 The bank's difficulties
from 1839 on blanked out these prospects wholly. They did more.
Biddle had rebounded from the earlier frustration that ended his
career as central banker; from the disaster to his later career he had
no power to turn. John Quincy Adams had dinner with him en
famille, November 22, 1840, and talked long with him. "Biddle," he
58
See his criticism of "mere'men of business" as administrators of the B.U.S.—R. C.
McGrane, Correspondence of Biddle, p. 27.
60
It will be recalled that, in his earlier literary days, he prepared a popular edition of the
Lewis and Clark journals.
61
R. C. McGrane, Correspondence of Biddle, pp. 325, 333, 335; C. H. Van Tyne, Letters of
Daniel Webster (New York: McClure, Phillips and Company, 1902), p. 213.
62
R. C. McGrane, Correspondence of Biddle, p. 333. See also earlier correspondence with
Thomas Cooper regarding the presidency, pp. 272, 277-282, 293, 296, 323.
 22 Bray Hammond
wrote, "broods with smiling face and stifled groans over the wreck of
splendid blasted expectations and ruined hopes. A fair mind, a bril-
liant genius, a generous temper, an honest heart, waylaid and led
astray by prosperity, suffering the penalty of scarcely voluntary error—
'tis piteous to behold."88 He died a little more than three years later,
in reduced circumstances if not insolvent.
Besides the Jacksonian view of Biddle and the view that I have
opposed to it, there is another I have already mentioned. Its dis-
tinction is its calm silence about the unhappy events, whether
discreditable or tragic, of Biddle's last years. In R. C. McGrane's
Panic of 1837, the bank's failure is alluded to, and Biddle's connection
with it is dismissed in a footnote: "It should be noted that Biddle was
now out of office, and can not be held responsible for what the bank
did at this period." In the published correspondence of Nicholas
Biddle, edited by Mr. McGrane, there is nothing that deals with the
things that made Biddle's last years so miserably unlike those of his
prime—the bank's failure, the loss of money and esteem, the prosecu-
tion of suits against him. And similarly in the article on Biddle in the
Dictionary of American Biography, no mention is made of his last
years' being clouded by any trouble whatsoever. Such reticence and
piety contrast genteelly with the bitterness he actually suffered and
with the judgment that he belonged in jail.84
Two things combined to give Biddle's fall a supererogatory black-
ness. One was the sheer drama of the event. The largest corporation in
the country—one of the largest in the world—had fallen suddenly
from its splendid success into sprawling collapse at the very feet of
the genius who had only recently with grand gestures relinquished
its management. It was a denouement that stimulated the imagination
to make worse what was already bad enough. The other aggravation
of the story came from political motives. Biddle and the bank had
never been warmed to by the Whigs, and Biddle's own ties were less
with them than with the Democrats, but the latter naturally sought to
make the bank seem Whig.65 They had great success; the debacle
•'John Quincy Adams, Memoirs, ed. C. F. Adams (Philadelphia: J. B. Lippincott and
Company, 1876), X, 361.
•* Reginald C. McGrane, The Panic of 1837; Some Financial Problems of the Jacksonian Era
(Chicago: The University of Chicago Press, 1924), p. 205; R. C. McGrane, Correspondence of
Biddle. The Jacksonian opinion of Biddle is reflected in Arthur M. Schlesinger, Jr.'s, Age of
Jackson (Boston: Litde, Brown and Company, 1945), which I have not referred to in this
essay because I reviewed it in the May 1946 issue of this JOURNAL.
65
It is not clear which party Biddle supposed might make him president. The second Bank
of the United States was both nurtured and destroyed within the Democratic party. Its
 Jackson, Biddle, and the United States Bank 23
helped to distintegrate the Whigs and strengthened the Jacksonians
immeasurably. As a result, partisan views have dominated subsequent
judgments and given Biddle the incidental and thankless role of
darkened background to the glories of Andrew Jackson; and his
achievements in credit policy, especially in the earlier and more
admirable phase when he was a pioneer central banker, have been
forgotten. Nowhere has he been studied adequately in his own right
as a man of significant accomplishments, shortcomings, and mis-
fortunes. Yet, in intellectual capacity, force of character, public spirit,
and lasting influence, he was comparable with any of the contem-
poraries of his prime.
The withering that overtook Biddle's fame did not extend to his
philosophy and example, which turned out to be triumphant, though
with no acknowledgment to him. The monetary views of Gallatin
and of Jackson are both obsolete, but Biddle's have a sort of pragmatic
orthodoxy. He sought to make monetary policy flexible and com-
pensatory rather than rigid. His easy-money doctrine had its source in
a vision of national development to which abundant credit was essen-
tial. The majority of his countrymen have agreed with him. They have
dismissed the man, but they have followed his ideas, especially his
worse ones. They have shared his bullishness and his energy. They
have not liked Jackson's primitive ideals of a simple, agrarian society,
except in their nostalgic moods. They have not understood Gallatin's
noble aversion for the fierce spirit of enterprise. They have exploited
the country's resources with abandon, they have plunged into all the
debt they could, they have realized a fantastic growth, and they have
slighted its cost. Gallatin personified the country's intelligence and
Jackson its folklore, but Biddle personified its behavior. They closed
their careers in high honor—he closed his in opprobrium and
bewilderment.
Somerset, Chevy Chase, Maryland BRAY HAMMOND

creators and friends included Madison, Monroe, Gallatin, and Crawford; its three presidents,
Jones, Cheves, and Biddle, were party members. Its greatest enemies were likewise pillars of
the party—Jackson himself, Bcntori, and Taney. Jackson's cabinet was divided. The Whigs
championed the bank less for its own sake than because Jackson's course left them no choice,
and they abandoned it with relief as soon as they could. They were not interested in having
bank credit restricted.