What was the formal name of the Second Bank of the United States as stated in its charter?

According to Section 9 of its charter, the formal name of the Second Bank of the United States was 'The President, Directors, and Company, of the Bank of the United States'.

When was the Second Bank of the United States chartered and when did it cease operations?

The Second Bank of the United States was chartered in February 1816 and operated until January 1836, with its federal charter expiring then. Its operations eventually ceased with liquidation in 1841.

Where was the Second Bank of the United States located?

The main branch of the Second Bank of the United States was located in Philadelphia, Pennsylvania.

How was the Second Bank of the United States structured in terms of ownership?

The Second Bank was a public-private partnership where 20 percent of its capital was owned by the federal government, making it the single largest stockholder. The remaining 80 percent was held by private investors, including a significant portion by Europeans.

On what model was the Second Bank of the United States based?

The Second Bank of the United States was modeled after Alexander Hamilton's First Bank of the United States.

Who signed the charter for the Second Bank of the United States, and when did it begin operations?

President James Madison signed the charter for the Second Bank in 1816. The bank began operations at its main branch in Philadelphia on January 7, 1817.

What significant political event involved the Second Bank of the United States in 1832?

The efforts to renew the bank's charter placed it at the center of the general election of 1832, leading to the conflict known as the 'Bank War'.

What was the ultimate fate of the Second Bank of the United States after its federal charter expired?

After failing to secure a recharter, the Second Bank transitioned into a private corporation in 1836 and underwent liquidation, which was completed in 1841.

Which political figures were key proponents of the Second Bank's charter from the South and West?

Republican nationalists John C. Calhoun of South Carolina and Henry Clay of Kentucky were decisive in the successful chartering effort for the Second Bank.

What were the main arguments against the establishment of the Second Bank by 'Old Republicans'?

'Old Republicans,' such as John Taylor of Caroline and John Randolph of Roanoke, argued that the Second Bank was constitutionally illegitimate and a threat to Jeffersonian agrarianism, state sovereignty, and even slavery, with Taylor stating that if Congress could incorporate a bank, it could also emancipate a slave.

How did the Second Bank of the United States function differently from a modern central bank?

Unlike modern central banks, the Second Bank did not set monetary policy, regulate private banks, hold their excess reserves, or act as a lender of last resort. Its primary role was fiscal agency and currency stabilization.

What global economic context influenced the launch of the Second Bank?

The bank was launched during a major global market readjustment as Europe recovered from the Napoleonic Wars.

What was the initial challenge faced by the Second Bank under its first president, William Jones?

Under William Jones, the bank failed to control the paper money issued by its branch banks in the West and South, which contributed to the post-war speculative land boom and was followed by the Panic of 1819.

How did the bank's actions during the Panic of 1819 affect public perception?

The bank's belated tight money policies during the Panic of 1819 exacerbated unemployment and property value declines, leading to public disaffection and doubts about the efficacy of paper money and the interests served by the national financial system.

Who succeeded William Jones as president of the Second Bank, and what was his approach?

Langdon Cheves succeeded William Jones. He continued the contraction of credit in an effort to stop inflation and stabilize the bank, even as the economy began to correct, which resulted in a protracted recession.

What significant change occurred in the bank's standing when Nicholas Biddle became president?

Under Nicholas Biddle, the bank evolved into a powerful institution that produced a strong and sound system of national credit and currency, expanding credit steadily but with restraint between 1823 and 1833.

What was the outcome of the Supreme Court case *McCulloch v. Maryland* regarding the Second Bank?

In the 1819 case of *McCulloch v. Maryland*, the Supreme Court affirmed the constitutionality of the Second Bank of the United States, a decision argued successfully by Daniel Webster.

What were President Andrew Jackson's primary criticisms of the Second Bank?

President Jackson criticized the bank for failing to produce a stable national currency and for lacking constitutional legitimacy. He privately characterized it as a corrupt institution dangerous to American liberties.

How did Henry Clay and Nicholas Biddle attempt to secure the bank's recharter?

Henry Clay, with financial and political support from Nicholas Biddle, led an early recharter campaign, making it a central issue in the 1832 presidential election by presenting a political ultimatum to President Jackson.

What action did President Jackson take against the bank after winning reelection in 1832?

Following his reelection, Jackson vetoed the recharter bill and proceeded to destroy the bank's financial and political influence by removing federal deposits and diverting revenue into selected private banks via executive order.

What tactic did Nicholas Biddle employ in an attempt to force a rescue of the bank?

In hopes of extorting a rescue, Biddle induced a short-lived financial crisis, which was initially blamed on Jackson's executive actions, but a backlash against Biddle's tactics eventually ended the panic.

What was the consequence of the bank becoming a private corporation in 1836?

After becoming a private corporation under Pennsylvania law in 1836, a shortage of hard currency ensued, contributing to the Panic of 1837, which lasted for approximately seven years.

When did the Second Bank suspend payment and eventually liquidate?

The bank suspended payment from October 1839 to January 1841, and permanently in February 1841, beginning a lengthy liquidation process that concluded in 1852.

How many branch offices did the Second Bank of the United States manage by 1832?

By 1832, the Second Bank of the United States managed 25 branch offices nationwide.

What was the capital limit set for the Second Bank by its charter?

Under its charter, the Second Bank had a capital limit of $35 million.

What 'bonus' payment was the Second Bank required to make to the government?

The bank was required to remit a 'bonus' payment of $1.5 million, payable in three installments, for the privilege of using public funds interest-free for its private banking ventures.

What services did the Second Bank provide as the exclusive fiscal agent for the federal government?

As the exclusive fiscal agent, the bank held and transferred all U.S. deposits, processed payment and receipt of all government transactions, and handled tax payments.

How many directors served on the chief personnel of the bank, and how were they appointed?

The chief personnel comprised 25 directors, five of whom were appointed by the President of the United States, subject to Senate approval. Federally appointed directors were prohibited from holding positions in other banks.

What was the primary regulatory task assigned to the Second Bank by its 1816 charter?

The primary regulatory task of the Second Bank was to restrain the uninhibited proliferation of paper money (bank notes) issued by state or private lenders, which was highly profitable for those institutions.

How did the Second Bank exert its anti-inflationary influence on local banks?

The bank exerted its influence by receiving checks and notes from local banks deposited by government revenue collectors. It then demanded settlements in specie (silver and gold coin) from these local banks, which automatically regulated their lending by reducing their specie reserves.

Why did private banks object to the Second Bank's regulatory mechanism?

Private banks objected because the mechanism yoked their lending strategies to the national government's fiscal operations, requiring them to maintain adequate gold and silver reserves to meet their debt obligations to the U.S. Treasury.

Who was the architect of the Second Bank of the United States?

The architect of the Second Bank was William Strickland, a former student of Benjamin Latrobe.

What architectural style did William Strickland employ for the Second Bank, and what inspired it?

William Strickland designed the Second Bank in the Greek Revival style, drawing inspiration from the Parthenon in Athens. This style is evident in its Doric columns, stylobate, and pediments.

How does the architecture of the Second Bank contrast with that of the First Bank of the United States?

The Second Bank's Greek Revival style, with its Doric columns, contrasts with the First Bank's Federal style, which featured more Roman-influenced Corinthian columns and a balustrade, giving it the appearance of a Roman villa.

What material was used for the exterior of the Second Bank, and what issue has it faced?

The exterior of the Second Bank uses Pennsylvania blue marble. Due to the way it was cut, parts of the stone have begun to deteriorate when exposed to the elements, most noticeably on the Doric columns of the south facade.

What is the current use of the Second Bank building?

Today, the Second Bank building is part of Independence National Historical Park in Philadelphia and serves as a free public art gallery housing portraits of prominent early Americans and a wooden statue of George Washington by William Rush.

When was the Second Bank building designated a National Historic Landmark?

The building was designated a National Historic Landmark in 1987 due to its architectural and historical significance.

How did Charles Dickens describe the Second Bank building in his writings?

In his 1842 travelogue *American Notes for General Circulation*, Charles Dickens described the building as having a 'mournful ghost-like aspect,' calling it the 'Tomb of many fortunes' and the 'Great Catacomb of investment,' reflecting the gloom over Philadelphia after its closure.

What happened to the Wall Street branch of the Second Bank?

The Wall Street branch in New York City was converted into the United States Assay Office before its demolition in 1915. Its federal-style facade was preserved and installed in the American Wing of the Metropolitan Museum of Art.

What was the number of private banks in the U.S. in 1837, and how did this compare to 1801?

The number of private banks proliferated from 31 in 1801 to 788 in 1837, indicating a significant growth in the private banking sector that would later oppose the national bank.

What was the role of the Second Bank in managing government finances?

The Second Bank acted as the exclusive fiscal agent for the federal government, holding and transferring all U.S. deposits, processing government transactions, and receiving tax payments.

Who were the key presidents of the Second Bank of the United States?

The key presidents of the Second Bank were William Jones (1817-1819), Langdon Cheves (1819-1823), and Nicholas Biddle (1823-1836).

What was the significance of the 'Era of Good Feelings' in relation to the Second Bank?

The political climate of the 'Era of Good Feelings' favored national programs and institutions, including a national bank, contributing to the successful chartering of the Second Bank.

What was the 'bonus' payment made by the bank to the government, and what was its purpose?

The bank paid a $1.5 million 'bonus' to the government in installments as a fee for the privilege of using public funds interest-free for its private banking operations.

What was the impact of the Currency Acts of 1751 and 1764 on colonial banking?

The Currency Acts, passed by the British Parliament, restricted the colonies' ability to issue paper money, impacting colonial banking practices before the establishment of the United States.

How did the Second Bank's charter compare to those of European national banks of the era?

While comparable to banks like the Bank of England and Bank of France, the Second Bank of the United States was distinct because the U.S. government owned 20 percent of its capital, making it more akin to a government bank than a wholly private institution.

What was the purpose of the Aldrich-Vreeland Act of 1908?

The Aldrich-Vreeland Act was enacted to provide an emergency currency system and was a precursor to the Federal Reserve Act, addressing issues in the U.S. financial system prior to the establishment of a central bank.

What historical event directly preceded the establishment of the Second Bank of the United States?

The War of 1812 preceded the establishment of the Second Bank. The federal government's financial difficulties during and after the war highlighted the need for a national banking system.

What was the significance of the 'Bank War'?

The 'Bank War' was a political struggle between President Andrew Jackson and Nicholas Biddle over the rechartering of the Second Bank of the United States, ultimately leading to the bank's demise and shaping Jacksonian democracy.

Second Bank Of The United States Wiki: The Second Bank of the United States: Architect of Early American Fiscal Policy

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Overview

Federally Authorized Bank

The Second Bank of the United States was the second federally authorized national bank, operating from February 1816 to January 1836. Its formal name was "The President, Directors, and Company, of the Bank of the United States." Unlike many state-chartered banks, it possessed the authority to establish branches across multiple states and to provide financial services to the U.S. government.

Public-Private Partnership

Structured as a private corporation with public responsibilities, the bank managed all fiscal transactions for the U.S. government. Twenty percent of its capital was held by the federal government, making it the largest single stockholder. The remaining capital was owned by private investors, including a significant portion held by European financiers and wealthy Americans.

Regulating Credit and Currency

A primary objective of the Second Bank was to regulate the nation's credit system by overseeing the issuance of paper money by private banking institutions. Through its fiscal duties for the U.S. Treasury, it aimed to establish a stable national currency and mitigate the risks associated with an unregulated financial market.

Historical Context

Establishment Context

Following the War of 1812, the nation faced fiscal disarray and an unstable currency. This period, often termed the "Era of Good Feelings," saw a shift from agrarianism towards industrialization and finance. Business interests advocated for a national banking system to secure government bonds and stabilize the economy.

Political Support and Charter

A national alliance, including Republican nationalists like John C. Calhoun and Henry Clay, championed the revival of a national bank. Despite initial constitutional objections from some quarters, President James Madison signed the charter into law on April 10, 1816. The bank commenced operations in Philadelphia in January 1817.

Early Challenges and Opposition

The bank's early years were marked by controversy. Initial mismanagement and belated contractionary policies exacerbated the Panic of 1819, leading to public distrust. Opposition also arose from "Old Republicans" who viewed the bank as a threat to state sovereignty and agrarian ideals, and from private banks wary of its regulatory influence.

Economic Functions

Role in the Economy

While not a modern central bank in function (it did not set monetary policy or act as a lender of last resort), the Second Bank played a crucial role. It managed U.S. government deposits, processed government transactions, and facilitated tax payments, acting as the nation's primary fiscal agent.

Regulatory Mechanism

The bank exerted influence by demanding settlements in specie (gold and silver) from state banks whose notes it held. This mechanism pressured local banks to maintain adequate reserves, thereby regulating their lending practices and curbing the proliferation of paper money, which helped prevent excessive speculation and financial crises.

Promoting Credit Expansion

Simultaneously, the bank facilitated a democratization of credit, providing loans to farmers, small manufacturers, and entrepreneurs. This supported economic expansion and accommodated the growing demands of a developing nation, fostering a sound national credit system under Nicholas Biddle's presidency.

The Bank War

Central Conflict

The Second Bank became a focal point of political conflict during President Andrew Jackson's administration. The charter renewal debate ignited the "Bank War," pitting Jackson's anti-bank stance against the bank's president, Nicholas Biddle, and his pro-bank allies, notably Henry Clay.

Jackson's Veto

Jackson viewed the bank as an unconstitutional and corrupt institution detrimental to American liberties. He vetoed the recharter bill in 1832, a decision that resonated strongly with his supporters and became a key issue in the presidential election, which Jackson decisively won.

Demise and Aftermath

Following the veto, Jackson proceeded to dismantle the bank's power by removing federal deposits and redirecting them to state banks. Biddle's attempt to provoke a financial crisis to force Jackson's hand backfired, leading to widespread backlash. The bank's federal charter expired in 1836, and it eventually liquidated its operations in 1841, contributing to the subsequent Panic of 1837.

Architectural Significance

Greek Revival Masterpiece

Designed by William Strickland, a disciple of Benjamin Latrobe, the Second Bank's edifice is a seminal example of Greek Revival architecture in the United States. Its design draws inspiration from the Parthenon, featuring prominent Doric columns, a stylobate, and a classical pediment.

Materials and Design

Constructed between 1818 and 1824, the building is primarily faced with Pennsylvania blue marble. While lending an imposing aesthetic, the marble's susceptibility to weathering has led to deterioration in some areas, particularly noticeable on the columns of the south facade.

Architectural Contrast

The Second Bank's Greek Revival style stands in contrast to the earlier, Roman-influenced Federal style of the First Bank of the United States, located nearby. This stylistic difference highlights evolving architectural trends and the distinct identities of these foundational financial institutions.

Current Use and Recognition

Post-Banking Era

After its federal charter expired, the bank transitioned into a private corporation under Pennsylvania law. This period saw financial instability, including the Panic of 1837. The institution eventually underwent liquidation, concluding its operations in 1852.

National Historic Landmark

Today, the Second Bank building is a significant component of Independence National Historical Park in Philadelphia. It serves as an art gallery, housing a notable collection of portraits of early American figures, including works by Charles Willson Peale and a statue of George Washington by William Rush.

Cultural Depictions

The building's imposing and somewhat somber presence left an impression on contemporary observers. Charles Dickens, in his 1842 travelogue American Notes, described it as a "Tomb of many fortunes" and a "Great Catacomb of investment," reflecting the economic gloom Philadelphia experienced following the bank's closure.

Legacy and Details

Presidents and Branches

The Second Bank operated under several presidents, most notably William Jones, Langdon Cheves, and Nicholas Biddle. It maintained a network of 25 branch offices across the United States by 1832, facilitating its national operations.

William Jones: January 7, 1817 – January 25, 1819
James Fisher (acting): January 25, 1819 – March 6, 1819
Langdon Cheves: March 6, 1819 – January 6, 1823
Nicholas Biddle: January 6, 1823 – March 1836
Matthew L. Bevan: March 1836 – 1837? (federal bank estate)
Nicholas Biddle: March 1836 – February 1839
Thomas Dunlap: March 1839 – February 1841
William Drayton: 1841
James Robertson: 1841 – March 22, 1852

Charter Terms

The bank's charter stipulated a capital limit of $35 million, with the U.S. government owning 20%. In return for the privilege of using public funds interest-free, the bank paid a $1.5 million bonus to the government. It was accountable to the U.S. Treasury and Congress, subject to departmental inspection.

Further Exploration

The Second Bank's history is intertwined with key developments in American finance and politics. Its operations and the controversies surrounding it offer valuable insights into the nation's early economic challenges and the evolution of its financial institutions.

Banking in the Jacksonian Era
Federal Reserve
First Bank of the United States
History of central banking in the United States
McCulloch v. Maryland
Panic of 1837

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References

See Andrew Jackson's State of the Union Addresses 1829â1836 Gutenberg

A full list of references for this article are available at the Second Bank of the United States Wikipedia page

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The Second Bank of the United States

💡 Dive in with Flashcard Learning! 💡

Overview ℹ️

🏛️ Federally Authorized Bank

⚖️ Public-Private Partnership

💰 Regulating Credit and Currency

Historical Context 📜

📈 Establishment Context

🤝 Political Support and Charter

📉 Early Challenges and Opposition

Economic Functions ⚙️

🏦 Role in the Economy

🔗 Regulatory Mechanism

🚀 Promoting Credit Expansion

The Bank War ⚔️

💥 Central Conflict

🚫 Jackson's Veto

📉 Demise and Aftermath

Architectural Significance 🎨

🏛️ Greek Revival Masterpiece

💎 Materials and Design

🏛️ Architectural Contrast

Current Use and Recognition 🏛️

📜 Post-Banking Era

🏞️ National Historic Landmark

✍️ Cultural Depictions

Legacy and Details 🔗

👥 Presidents and Branches

📜 Charter Terms

📚 Further Exploration

Teacher's Corner 🧑‍🏫

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References

📜 References

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Disclaimer ⚠️

📜 Important Notice

Dive in with Flashcard Learning!

Overview

Federally Authorized Bank

Public-Private Partnership

Regulating Credit and Currency

Historical Context

Establishment Context

Political Support and Charter

Early Challenges and Opposition

Economic Functions

Role in the Economy

Regulatory Mechanism

Promoting Credit Expansion

The Bank War

Central Conflict

Jackson's Veto

Demise and Aftermath

Architectural Significance

Greek Revival Masterpiece

Materials and Design

Architectural Contrast

Current Use and Recognition

Post-Banking Era

National Historic Landmark

Cultural Depictions

Legacy and Details

Presidents and Branches

Charter Terms

Further Exploration

Teacher's Corner

True or False?

Test Your Knowledge!

Gamer's Corner

Discover other topics to study!

References

Feedback & Support

Disclaimer

Important Notice