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Lost Opportunities for Compromise in the Bank War: A Reassessment of Jackson's Veto Message

Published online by Cambridge University Press:  11 June 2012

Edwin J. Perkins
Edwin J. Perkins
Affiliation:
Edwin J. Perkins is professor of history at the University of Southern California.
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Abstract

In this article Professor Perkins reexamines President Andrew Jackson's objections to the bill to recharter the Second Bank of the United States, as expressed in his famous veto message of 1832. He observes that, in addition to its exaggerated rhetoric, the veto message discusses at length a number of alleged deficiencies in the existing charter provisions. Professor Perkins's systematic analysis of the probable ramifications of a series of judicious alterations reveals that a compromise bill reformulated to meet most of the president's stated objections would not have seriously undermined the institution's position in American financial markets. Although several opportunities for sensible compromise arose, Nicholas Biddle and other members of the probank faction disregarded them. Perkins argues that the failure of bank supporters to consider comparatively modest modifications in the terms of recharter was a major blunder that ultimately doomed the Second Bank.

Type
Articles
Information
Business History Review , Volume 61 , Issue 4 , Winter 1987 , pp. 531 - 550
Copyright
Copyright © The President and Fellows of Harvard College 1987

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References

1 The literature on Jackson and the issue of banking and finance is vast. A representative sample of a few important books includes: Hammond, Bray, Banks and Politics in America from the Revolution to the Civil War (Princeton, N.J., 1957)Google Scholar; Schlesinger, Arthur Jr, The Age of Jackson (Boston, 1945)Google Scholar; McFaul, John, The Politics of Jacksonian Finance (Ithaca, N.Y., 1972)Google Scholar; Sharp, James R., The Jacksonians versus the Banks: Politics in the States after the Panic of 1837 (New York, 1970)Google Scholar; Shade, William, Banks or No Banks: The Money Issue in Western Politics (Detroit, Mich., 1972)Google Scholar; Pessen, Edward, Jacksonian America: Society, Personality, and Politics (Homewood, Ill., 1969)Google Scholar. The best account of the conflict between Jackson and the Second Bank remains Robert Remini's Andrew Jackson and the Bank War (New York, 1967)Google Scholar; Remini, covers much of the same territory in volume 2 of Andrew Jackson and the Course of American Freedom (New York, 1981), 331–73Google Scholar.

2 See, for example, Smith, Walter B., Economic Aspects of the Second Bank of the United States (Cambridge, Mass., 1953)Google Scholar; Redlich, Fritz, The Molding of American Banking, 2d ed. (New York, 1968), 1:96–181Google Scholar; Timberlake, Richard, The Origins of Central Banking in the United States (Cambridge, Mass., 1978)Google Scholar. Every textbook written by an economic historian over the last quarter-century, and there have been many, including one of my own, provides a generally positive assessment of the accomplishments of the bank under the leadership of Nicholas Biddle.

3 President Jackson, Andrew, “Veto Message,” 10 July 1832, House Miscellaneous Documents, 53d Cong., 2d sess. (Washington, D.C., 1893–1894), 2: 576–91Google Scholar. The complete text of the message plus excerpts from books and articles related to the controversy, both pro and con, are found in Jackson vs. Biddle's Bank: The Struggle over the Second Bank of the United States, ed. Taylor, George Rogers, 2d ed. (Lexington, Mass., 1972), 10–29Google Scholar.

4 Jackson, , “State of the Union Address,” Dec. 1829, in Messages and Papers of the Presidents, ed. Richardson, James L. (Washington, D.C., 1896–1899), 2: 462Google Scholar.

5 “Plan for a National Bank,” in Amos Kendall to Jackson, 20 Nov. 1829, box 1, file 6, Tennessee Library and Archives, Nashville. Larry Schweikart provides an in-depth analysis of the favorable attitudes of Jackson and his followers regarding the prospect of greater centralization of the banking system in his highly revisionist manuscript, “Jacksonian Ideology, Hard Money, and ‘Central Banking’: A Reappraisal,” forthcoming in The Historian.

6 An excellent source of material related to Jackson's attitudes and opinions from a participant in these events is Hamilton, James A., Reminiscences (New York, 1869)Google Scholar.

7 For an analysis of political considerations, see Hammond, Banks and Politics, 326–450, and Govan, Thomas P., Nicholas Biddle: Nationalist and Public Banker, 1786–1844 (Chicago, 1959), 169–204Google Scholar.

8 Wilburn, Jean, Biddle's Bank: The Crucial Years (New York, 1967)Google Scholar, reveals the extent of broad, crosssectional support for the bank in Congress by 1832.

9 For McLane's limited role in the bank war, see Munroe, John, Louis McLane: Federalist and jacksonian (New Brunswick, N.J., 1973), 317–50Google Scholar.

10 Catterall, Ralph, The Second Bank of the United States (Chicago, 1903), 224–28Google Scholar.

11 McCulloch v. State of Maryland, 4 Wheaton, 316. For a detailed analysis of the complex legal issues, see Baker, Leonard, John Marshall: A Life in Law (New York, 1974), 588–620Google Scholar; the quotation is found on p. 603. A misleading account of the implications of the court decision, which implies that federal government agencies were thereafter exempt from all state and local taxation, is in Hammond, Banks and Politics, 262–68.

12 Nicholas Biddle to Charles Ingersoll, 26 Feb. 1832, in The Correspondence of Nicholas Biddle, ed. McGrane, Reginald (Boston, 1919), 185–86Google Scholar.

13 Catterall, Second Bank, 233.

14 Ibid., 234.

15 Curtis, James C., Andrew Jackson and the Search for Vindication (Boston, 1976), 130Google Scholar. Perhaps the strong emphasis on the social implications is found in Schlesinger, Age of Jackson, chaps. 7–10.

16 Remini, Jackson and the Bank War, 82; Latner, Richard, The Presidency of Andrew Jackson: White House Politics, 1829–1837 (Athens, Ga., 1979), 111–23Google Scholar, argues that the main concern of the drafters of the message was not the absense of absolute equality, “but special privilege, monopoly, and the abuse of governmental powers” (p. 118).

17 Jackson, “Veto Message.”

18 Ibid.

19 Ibid.

20 Ibid.

21 Ibid.

22 McCulloch v. Maryland; Baker, John Marshall, 23.

23 Biddle to Ingersoll, 26 Feb. 1832.

24 This estimate is based on my analysis of data in Van Fenstermaker, J., The Development of American Commercial Banking, 1782–1837 (Kent, Ohio, 1965), 65–69Google Scholar.

25 Hammond, Banks and Politics, 197–226.

26 In 1803 Jefferson described the First Bank as “[an institution] of the most deadly hostility existing against the principles and form of our Constitution.” He also spoke of the nation as functioning “under the vassalage” of the bank. Jefferson to Albert Gallatin, 13 Dec. 1803, in The Writings of Thomas Jefferson, ed. Washington, H. A. (New York, 1854), 4: 519Google Scholar.

27 Jackson, “Veto Message.”

28 Ibid.

29 Daniel Webster, speech to Senate on bank bill, 11 July 1832, in The Writings and Speeches of Daniel Webster (Boston, 1903), 6: 149–80Google Scholar. Excerpts from Webster's address are reprinted in Taylor, ed., Jackson vs. Biddle's Bank, 34–43.

30 Catterall, Second Bank, 240–41. Despite his biases against Jackson, Catterall concluded that the reaction of the bank's supporters to the veto message was “ludicrous and almost pathetic.”

31 Biddle's initial reaction was optimistic, since he believed that the exaggerated language was all that “the friends of the Bank and the country could desire.” Biddle to Henry Clay, 1 Aug. 1832, in The Life, Correspondence, and Speeches of Henry Clay, ed. Colton, Calvin (New York, 1857), 4: 341Google Scholar.

32 Van Buren, Martin, Autobiography, ed. Fitzpatrick, John C. (Washington, 1920), 625Google Scholar.

33 Both Robert Remini and James Curtis suggest that prior to the summer of 1832 Jackson might have been amenable to a genuine compromise on the recharter bill, but the implacable attitude of opponents stirred his combative nature; see Remini, Jackson and the Bank War, 43, and Curtis, Andrew Jackson, 121–29.

34 Biddle told a correspondent in discussing Jackson's attitude toward the institution: “I will not give way an inch in what concerns the independence of the Bank, to please all the Administrations past, present or future.” Biddle to A. Dickens, 16 Sept. 1829, in McGrane, ed., Biddle, 75–76.