Wednesday, November 7, 2007
The Second National Bank
The Second National Bank of the United States opened in 1816, the main purpose of the bank was to stabilize the nation's money supply. This included reducing the amount of paper money, to do this the Second Bank promised to redeem paper notes for gold and silver coins. Collecting these paper notes helped the Second Bank keep the state banks from issuing too much paper money. Throughout the 1820s the Second Bank continued to remain stable by closing reckless state banks as well as keeping expansion-minded bankers in the western states. This made the bankers and entrepreneurs with capital investments that were underwriting economic development happy. But the American people were afraid because of the the bank's power to force other banks to close which left them with worthless paper notes. Some bankers didn't like that all of the federal governments specie was being deposited in the Second Bank and wanted some of it deposited in their banks, while others just didn't like the idea of any kind of supervision by a central bank. In 1832 Henry Clay and Daniel Webster attempted to get Biddle to get an early extension on the bank's charter hoping that Jackson would veto the bill and thus split the Democrats before the 1832 elections. In the end Jackson vetoed the bill that rechartered the bank saying that the bank has no constituional authority to charter the national bank and that it was "dangerous to the liberties of the people. Lastly he pointed out that British aristocrats owned most of the bank's stock and that any institution that powerful shoudl be "purely American." This attack on the bank lead to his victory in the election of 1832.
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9 comments:
The Second National Bank was thought of by Andrew Jackson. The bank was doing great things for our economy. Understandingly, the American people were scared that the government was going to gain too much power with all of their money going towards the National Bank and not their own individual.
I think it's interesting to note the amount of power the bank's president, Nicholas Biddle held. He claimed he had more power than any President enjoys. His arrogance also led to the distrust of Americans towards the Second Bank.
the establishment of the second bank helped give america a steady source for our economy. with biddle having such high power and the government using their money through this bank, the public became very worried about our government
It is interesting to loook back and see how many years American's feared a strong central government with a National Bank. We continue to see this fear of "too much" power spring up in todays government.
This whole controversy kind of led to something positive - the whig party. Abraham Lincoln followed this party's ideas, which eventually became the Rebulican party that was in power during the Civil War.
The Second National Bank was certainly a good thing at first, in terms of helping the economy. But having all the governments money and a lot of power really would not be a good thing in any way. Its a good thing Jackson pulled the plug before it got too out of hand.
I agree the Americans had the right to be scared about the status of their money. It is much easier to trust a local banker rather than a National Bank who is taking care of many more people. When dealing with a president such as Nicholas Biddle it also makes you more apprehensive about the safety of your money.
I agree that the American people have a reason to fear too much federal government power with the Second Bank of the US. Also it is definitely a good idea to have to switch the paper money over to gold and silver coins. That would be pretty scary to only have a piece of paper signifying your wealth and you don't know if this piece of paper will become worthless since the bank system wasn't exactly very steady.
It seems like ever since the British left America, people have been worrying constantly about the United States having too much power. We all know what happens when a government gets too much power, the corruption begins.
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