American Biography – Nicholas Biddle (1786 –
1844)
Nicholas was born in Philadelphia, the son of a wealthy
merchant and politician. A precocious child, he entered the
University of Pennsylvania when he was only 10 years
old. Three years later he completed all the courses he
needed to graduate. But, because of his extreme youth,
the University refused to grant him a diploma. Therefore,
he entered Princeton University. He graduated when he
was 15 years old and was the class valedictorian.
In 1807, he began to practice law. He also became
the editor of the first literary journal in the United States.
In 1814, he co-edited the “History of the Expedition of
Lewis and Clark”, a book based on the explorers’
journals.
In 1810, he was elected to the lower house of the
Pennsylvania Legislature, while he father was elected to
its upper house. That same year he married Jane Craig,
the daughter of one of Philadelphia’s wealthiest families.
In 1819, he authored a study for the State
department on foreign legislation affecting the U.S. trade. At the same time, he was defeated in
a bid to enter Congress. Therefore, he was appointed to the Board of Directors of the second
Bank of the United States by his friend, President Monroe. By 1822 he had been appointed
president of the B.U.S. Under his leadership, the Bank grew and the economy prospered. The
Bank issued sound currency, thereby checking inflation and it cautiously extended credit for the
expansion of the country.
In 1828, Andrew Jackson was elected President. He referred to the Bank as “the
Monster”. The Bank’s charter was up for renewal in 1836 but Biddle petitioned Congress to
recharter the Bank in 1832. Congress passed the necessary legislation but President Jackson
vetoed the Bill. (To his Vice-President Jackson said, “The Bank, Mr. Van Buren, is trying to
kill me, but I will kill it!). In his Veto Message, President Jackson argued that the Bank was
unconstitutional. He also denounced it as a monopoly that operated to the advantage of a small
and irresponsible group of wealthy people who lived in the East and even in foreign countries.
Biddle decided to fight back. The conflict, called “The Bank War”, was almost like a
personal duel – between “The aristocrat” (as Jackson referred to Biddle as) and the westerner.
Biddle threw his support behind Jackson’s political opponents in the Presidential election of 1832.
But, Jackson was re-elected by an even greater majority than in 1828. Jackson was a vengeful
man who regarded his political battles as personal conflicts. There was no doubt that he would
not allow the Bank or Biddle to thrive.
To weaken the Bank, Jackson ordered that the government withdraw its deposits. The
money was distributed to five state banks, called the “pet banks”. In response, Nicholas
decided that he had to prove to the President and the nation how essential the Bank was. He
began to curtail credit by demanding that the loans paid out by the Bank to other banks and
individuals be repaid at once. He caused a financial crisis. Businesses were ruined. Biddle’s
actions seemed to confirm what Jackson had been saying about the Bank and Biddle all along.
They were too powerful and were not above using their power for personal advantage and public
disadvantage.
Although Nicholas tried to reverse his policies, it was too late. The Bank was not
rechartered in 1836. The financial chaos caused by the Bank War emerged during the
administration of Jackson’s successor, Martin Van Buren. The country was thrown into a deep
economic depression, called the Panic of 1837, for the next four years.
Nicholas had over-extended the financial capabilities of his bank. In 1841, the Bank
collapsed, although Nicholas paid off in full all those to whom he owed money. He retired to his
estate, where he indulged his love of Greek statuary. He died in Philadelphia.
The conflict over the Bank set the direction for American economic policy over the next
hundred years. No more central banks would be chartered. In 1913, the Americans did adopt a
rather decentralized Federal Reserve System to regulate the economy as a Central bank
would have done. In the meantime, the banking system of the United States was free-wheeling
and competitive, and did not provide the sound economic basis that the country needed.
Question for thought:
Most historians feel that Biddle was right and Jackson wrong in the Bank War.
The Bank did need to be curbed not destroyed. To what extent do you think
that the personalities of the two men made impossible a rational conclusion to
the Bank War?
Complete Explanation:
Satire on the Jackson administration's continuing battle against the Bank of the United States. The print was
specifically occasioned by the re-chartering of the Bank by the Whig-controlled Pennsylvania Legislature in defiance of
the administration. The artist also ridicules the ambitions of Jackson's vice-president and would-be successor Martin
Van Buren.
Jackson, holding a broken cane labeled "Veto," flees to the left away from Bank president Nicholas Biddle (right) who
displays a two-faced demon's head and the Bank's new charter. Biddle stands on the front step of the "Old United
States Bank" and says, "General allow me to introduce an old friend with a new face."
Jackson: "The Monster! the many headed Monster's come to life! Old Nick! Old Nick! I'll cut stick and fly to Araby!. . ."
Van Buren (who clings to Jackson's discarded cloak, labeled "Collar presses, No Monopoly, Deposits, Appropriation,
Globe, Specie Currency"): "Stop General! Like the Prophet Elisha he has left his mantle with me. I hope it will fit!"