Editing Nicholas Biddle (section)

==The Bank of the United States==
===Early years===
After Biddle moved to the [[Pennsylvania State Senate]], he lobbied for the rechartering of the [[First Bank of the United States]].{{sfn|Govan|1959|pp=28-34}} It was on this subject that he made his first major speech, which attracted general attention at the time, and was warmly commended by Chief Justice [[John Marshall]] and other leaders of public opinion.{{sfn|Wilson|Fiske|1900}}

The First Bank had been established in 1791 under the administration of President [[George Washington]]. Congress opted not to renew its twenty-year charter in 1811, and as a result, the First Bank closed its doors. After economic hardships, monetary pressures, and problems financing the federal government during the [[War of 1812]], Congress and the president granted a new twenty-year charter to the [[Second Bank of the United States]] in 1816. The Second Bank was in many ways a revived and reorganized version of the First Bank. President [[James Monroe]] subsequently appointed Biddle as a government director. When Bank President [[Langdon Cheves]] resigned in 1822, Biddle became the institution's new president.<ref>{{cite web |url= https://www.federalreservehistory.org/people/nicholas_biddle|title= Nicholas Biddle|author= Federal Reserve Bank of Richmond|date= <!-- not stated-->|website= www.federalreservehistory.org|publisher= Federal Reserve History|access-date= November 17, 2018}}</ref> During his association with the Bank, President Monroe, under authority from Congress, directed him to prepare a "Commercial Digest" of the laws and trade regulations of the world and the various nations. For many years after, this Digest was regarded as an authority on the subject.{{sfn|Wilson|Fiske|1900}}

In late 1818, $4 million of interest payments on the bonds previously sold in 1803 to pay for the [[Louisiana Purchase]] were due, in either gold or silver, to European investors. The Treasury Department, therefore, had to acquire additional amounts of [[Bullion coin|specie]]. As the federal government's chief fiscal agent, the Bank was obligated to make these payments on behalf of the Treasury. The Bank demanded that private and state-chartered commercial banks, many of which had loaned excessively and previously served as fiscal agents during the War of 1812, now pay the Second Bank in specie, which was then sent to Europe to pay the federal government's creditors. This rather sudden contraction of the country's monetary base after three years of speculation helped contribute to the financial [[Panic of 1819]].{{sfn|Browning|2019|pp=4-14}}

Meanwhile, in [[Tennessee]], military hero and future presidential candidate [[Andrew Jackson]] was hard-pressed to pay his debts during this period. He developed a lifelong hostility to all banks that were not completely backed by gold or silver deposits. This meant, above all, hostility to the new [[Second Bank of the United States]].{{sfn|Campbell|2019|p=10}}

As a banker, Biddle promulgated a nationalistic vision with an emphasis on regulation and flexibility. He was also innovative.{{sfn|Govan|1959|p=88}} Biddle occasionally engaged in the relatively new techniques of [[central bank]]ing–-controlling the nation's money supply, regulating interest rates, lending to state banks, and acting as the Treasury Department's chief fiscal agent. When state banks became excessive in their lending practices, Biddle's Bank acted as a restraint. In a few instances, he even rescued state banks to prevent the risk of "contagion" spreading.{{sfn|Campbell|2019|pp=3-4}}

In 1823, Biddle started concentrating the Bank's facilities in the West, Southwest, and South to meet the demands for credit generated by the expansion of land, cotton, and slavery. He did this by directing his branch officers to circulate large quantities of branch drafts and by buying and selling millions of dollars of bills of exchange.{{sfn|Catterall|1902|pp=136-143}}{{sfn|Smith|1953|pp=39-44}} As cotton moved downriver in the winter and spring months, merchants drew up bills of exchange representing the value of cotton exports, presenting them to the Bank's southern branches. Using its interregional network of branch offices and the transportation improvements then under way, the Bank would ship these bills to the Northeast where merchants could use them to pay for imported manufactured goods arriving from Great Britain in the summer and fall.{{sfn|Knodell|2016|pp=69-73}} The result was that Biddle helped provide an economic infrastructure that facilitated long-distance trade, propagated a relatively stable and uniform currency, and played a major role in integrating and consolidating fiscal operations at the federal level.{{sfn|Knodell|2016|p=15}} Indeed, Biddle won praise for the Bank by making steady payments to reduce the country's public debt, by preventing a potentially harmful recession in the winter of 1825–1826, and more generally, by smoothing out variations in prices and trade.

He was also important in the 1833 establishment of [[Girard College]], an early free private school for poor orphaned boys in Philadelphia, under the provisions of the will of his friend and former legal client, [[Stephen Girard]] (1750–1831), one of the wealthiest men in America. Girard had been the original promoter of the revival and reorganization of the Second Bank and its largest investor.<ref>A. B. Hepburn, A History of Currency in the United States (New York: The Macmillan Co., 1903; reprinted, August M. Kelly Publishers, 1967) p. 95</ref>

===Bank War===
The [[Bank War]] began when President Jackson started criticizing the Bank early in his first term. Beyond the long list of personal and ideological objections that Jackson maintained toward the Bank, there were rumors that Bank officers at some of the branch offices had interfered in the presidential contest of 1828 by providing financial assistance to the National Republican candidate, [[John Quincy Adams]]. Although Biddle traveled to the branch offices to examine the veracity of these claims in person, and denied them unequivocally, Jackson continued to believe that they were true.{{sfn|McGrane|1919|p=67-74}}{{sfn|Remini|1967|p=49-59}} In January 1832, Biddle submitted an application to Congress for a renewal of the Bank's twenty-year charter, four years before the current charter was due to expire. [[Henry Clay]] and other Bank supporters hoped to force Jackson into making an unpopular decision that might cost him during an election year,{{sfn|Wilson|Fiske|1900}} but there were also pressures for an early application emanating from the Bank's stockholders and board of directors.{{sfn|Campbell|2019|p=63-66}} President Jackson vetoed the bill in a stunning move that carried significant consequences for the relationship between Congress and the executive branch.{{sfn|Remini|1967|p=176-178}} The reasons for Jackson's veto were legion and included concerns over the Bank's monopoly power and concentrated wealth, constitutional scruples, states' rights, the Bank's foreign stockholders and ability to foreclose on large parcels of land, sectional animosity toward eastern financiers, and political patronage. An additional factor was Jackson's personality. The president was well known for his stubbornness{{sfn|Remini|1967|p=22}}  and continued to harbor resentment toward Clay from the earlier "[[Corrupt bargain#Election of 1824|Corrupt Bargain]]" accusation following the [[1824 United States presidential election|presidential election of 1824]].

At Biddle's direction, the Bank poured tens of thousands of dollars into a campaign to defeat Jackson in the [[1832 United States presidential election|presidential election of 1832]]. This was a continuation of a strategy that one historian has referred to as one of the earliest examples in the country's history of an interregional corporate lobby and public relations campaign.{{sfn|Campbell|2019|p=48}} Articles, stockholders' reports, editorials, essays, philosophical treatises, petitions, pamphlets, and copies of congressional speeches were among the diverse forms of media that Biddle transmitted to various sections of the country through loans and Bank expenditures. Reports of unusually generous loans to pro-BUS politicians and even small bribes to sympathetic newspaper editors, the details of which came to light in a congressional report published in April 1832, helped convince hard-line Jacksonians that the corrupt "Monster Bank" must be destroyed.{{sfn|Govan|1959|pp=150}}{{sfn|Campbell|2019|pp=71-77}} Biddle was told that such vigorous campaign spending would only give credence to Jackson's theory that the Bank interfered in the American political process, but chose to dismiss the warning.{{sfn|Remini|1981|p=376}} Ultimately, Clay's strategy failed, and in November he lost handily to Jackson, who was reelected to a second term.{{sfn|Remini|1967|p=106}}

In early 1833, Jackson, despite opposition from some members of his cabinet, decided to withdraw the Treasury Department's public (or federal) deposits from the Bank.<ref>{{cite web |url=https://www.federalreservehistory.org/essays/second_bank_of_the_us |title=The Second Bank of the United States (1816–1841) |last=Hill |first=Andrew T. |date=February 5, 2015 |website=Federal Reserve History |access-date=July 8, 2017}}</ref> The incumbent secretary of the treasury, [[Louis McLane]], a member of Jackson's Cabinet, professed moderate support for the Bank. He therefore refused to withdraw the federal deposits directed by the president and would not resign, so Jackson then transferred him to the [[United States State Department|State Department]].{{sfn|Remini|1984|pp=57–58; 171}} McLane's successor, [[William J. Duane]], was also opposed to the Bank, but would not carry out Jackson's orders either. After waiting four months, President Jackson summarily dismissed Duane, replacing him with Attorney General [[Roger B. Taney]] as a [[recess appointment]] when Congress was out of session.{{sfn|Wilentz|2006|p=395}} In September 1833, Taney helped transfer the public deposits from the Bank to seven state-chartered banks. Faced with the loss of the federal deposits, Biddle decided to raise interest rates. A mild [[financial panic]] ensued from late 1833 to mid-1834.{{sfn|Wilentz|2006|pp=396–400}} Intended to force Jackson into a compromise and demonstrate the utility of a national bank for the nation's economy, the move had the opposite effect of increasing anti-Bank sentiment.<ref>{{cite web |url=https://www.federalreservehistory.org/essays/second_bank_of_the_us |title=The Second Bank of the United States (1816–1841) |last=Hill |first=Andrew T. |date=February 5, 2015 |website=Federal Reserve History |access-date=July 8, 2017 |url-status=live |archive-url=https://web.archive.org/web/20170711064727/https://www.federalreservehistory.org/essays/second_bank_of_the_us |archive-date=July 11, 2017  }}</ref>{{sfn|Wilentz|2006|pp=396–400}} Meanwhile, Biddle and other Bank supporters attempted to renew the Bank's charter on numerous occasions. All their attempts failed because they did not have the two-thirds majorities in Congress to overcome a [[presidential veto]].{{sfn|Wilentz|2006|pp=396–400}}

===Demise of the bank===
[[File:Second Bank of the United States 1838.jpg|thumb|Share of the Second Bank of the United States, issued 18. June 1838, signed by Nicholas Biddle]]
The Second Bank's twenty-year charter expired in April 1836, but Biddle worked with the Pennsylvania state legislature to prolong the institution as a state-chartered bank, the United States Bank of Pennsylvania (BUSP). The BUSP remained open for several more years.{{sfn|Sklansky|2017|pp=164-165}} It was in the later years of his career that Biddle began to invest significant financial resources not only in internal improvement projects,{{sfn|Smith|1953|p=28}} but also in the booming expansion of land, cotton, and slavery in the Old Southwest.{{sfn|Govan|1959|p=320-323}}{{sfn|Kilbourne|2006|pp=89-92}}

In 1837 and 1838, Biddle secretively dispatched agents into the South to buy up several million dollars worth of cotton with the notes of state-chartered banks, all in an effort to restore the nation's credit and pay off foreign debts owed to British merchant bankers.{{sfn|Smith|1953|pp=195-201}} Critics called this an example of illegal cotton speculation and noted that the Bank's charter forbid the institution from purchasing commodities. Biddle also invested in and bailed out several state-chartered banks in the South whose capital was derived partially from slave mortgages. Some of these banks, including the Union Bank of Mississippi, financed the dispossession of Native Americans.<ref>{{cite web |url=https://academic.oup.com/jah/article/106/2/315/5545757 |title=Financing Dispossession: Stocks, Bonds, and the Deportation of Native Peoples in the United States |last=Saunt |first=Claudio |date=September 1, 2019 |journal=Journal of American History |volume=106 |issue=2 |pages=315–337 |doi=10.1093/jahist/jaz344 |access-date=May 15, 2021}}</ref>{{sfn|Kilbourne|2006|pp=89-94}} Indeed, post-notes issued by the BUSP helped conclude one of the treaties that removed the [[Cherokee]] from their ancestral lands.<ref>{{cite journal |url=https://muse.jhu.edu/article/793520 |title='A Very Large Extent of Virgin Land': Nicholas Biddle, Cotton, and the Expansion of Slavery, 1823-1841 |last=Campbell |first=Stephen W. |date=May 22, 2021 |journal=The Pennsylvania Magazine of History and Biography |volume=145 |pages=33–65 |doi=10.1353/pmh.2021.0001 |s2cid=236690261 |access-date=May 29, 2021|url-access=subscription }}</ref> In addition, Biddle purchased bonds in the [[Republic of Texas]], opposed territorial expansion into Oregon, and denounced [[abolitionism|abolitionists]].{{sfn|Govan|1959|p=409}}

Meanwhile, in the absence of any regulatory oversight provided by a central bank, state-chartered banks in the West and South relaxed their lending standards, took on greater risks, maintained unsafe reserve ratios, and contributed to a credit bubble that eventually burst with the [[Panic of 1837]]. In 1839, after seeing his investment in cotton speculation backfire, Biddle resigned from his post as bank president, and in 1841, with the nation still reeling from depression, the Bank finally collapsed.<ref>[https://www.minneapolisfed.org/article/2008/the-rise-and-fall-of-nicholas-biddle The Rise and Fall of Nicholas Biddle.] www.minneapolisfed.org</ref> Because the BUSP had issued loans to financial institutions and individual actors who pledged slave mortgages as collateral, the BUSP tragically became one of the largest owners of plantations, slaves, and slave-grown products in Mississippi as debtors rushed to repay creditors during the economic downturn of the early 1840s.{{sfn|Kilbourne|2006|p=2}}

Biddle and a few of his colleagues had borrowed tens of thousands of dollars of cash from the BUSP on their own account without going through the normal lending process and without informing the Bank's board, and as a result, a grand jury indicted Biddle on charges of fraud in December 1841.{{sfn|Govan|1959|pp=405}} Biddle was arrested and forced to pay compensation to creditors using the remainder of his personal fortune. The charges were later dismissed.{{sfn|Sklansky|2017|pp=164-165}} On February 27, 1844, at the age of fifty-eight, Biddle died at the [[Andalusia (estate)|Andalusia estate]] from complications related to bronchitis and edema.{{sfn|Govan|1959|p=411}} Funds from his wife's family supported the ongoing civil lawsuits that plagued Biddle toward the end of his life.{{sfn|Sklansky|2017|pp=164-165}}{{sfn|Chisholm|1911}}