Jackson

Jackson, Biddle, and the Bank of the United States

³Banking and Politics²

by
Bray Hammond

Most histories of Jacksonian Democracy take their bearings from the war between Andrew Jackson and the second Bank of the United States. Those writers who sympathize with the President and accept his broad identification with the democratic forces of the country see in the Bank a private institution clothed with public authority that assumed dangerous powers over the economic life of the country, served the interests of the wealthy business classes, and threatened to corrupt the government. (See A rthur M. Schlesinger, Jr., The Age of Jackson.) Historians of a strong Whig bent find little more in Jackson's war than economic ignorance, partisan ambition, and hot temper. (See Thomas Govan, Nicholas Biddle.) Between those extremes, a large body of historical literature has filled out our knowledge of the politics and economics ofbanking in the Jacksonian era, with varying emphases on the folly or wisdom of the great veto. Bray Hammond, a former official of the Federal Reserve Board, drew from his experience a distinctive perspective on the issues and consequences of the Bank War. The Bank's president and mastermind, Nicholas Biddle, brilliantly anticipated the modern conception of central banking. By using the vast resources and special powers of the national bank, he could regulate the conduct of the whole banking system and thus, to a considerable degree, control the flow of money and credit, the commercial exchanges, and even the level of activity in the national economy. Jackson, from this point of view, defeated his own agrarian ends when he destroyed the only effective instrument of economic restraint on an acquisitive and speculative society. Biddle spoke for the controlled release of energy, Jackson for a lost world of economic innocence, and the veto-in effect-for a wild scramble. The following selection states briefly the point of view that Hammond has elaborated in his comprehensive study, Banks and Politics in America. Recent critics have disputed his claims for the economic power of the Bank over the economy and questioned his evidence that state bankers from New York and elsewhere supplied the decisive support and direction for Jacksonian banking policy.

More than forty years have passed since Catterall's monograph on the second Bank of the United States was published, and, though that account has never been superseded, it antedates all recent literature on central banking and therefore presents inadequately the public purposes of the bank. Furthermore, it includes nothing about the bank's Pennsylvania successor, which failed, and thus omits the denouement of Biddle's conflict with Jackson. The inevitable effect of the failure, in the rough justice of history, was to make Jackson seem right and Biddle wrong; and this impression, especially in the absence of attention to the purpose and functions of the bank, seems in recent years to have been strengthened. 1 think it needs correction.

[1]

The Bank of the United States-the B.U.S. as Biddle and others often called it-was a national institution of complex beginnings, for its establishment in 1816 derived from the extreme fiscal needs of the federal government, the disorder of an unregulated currency, and the promotional ambitions of businessmen. The bank had an immense amount of private business-as all central banks then had and as many still have-yet it was even more definitely a government bank than was the Bank of England, the Bank of France, or any other similar institution at the time. The federal government owned one fifth of its capital and was its largest single stockholder, whereas the capital of other central banks was wholly private. Government ownership of central-bank stock has become common only in very recent years. Five of the bank's twenty-five directors, under the terms of its charter, were appointed by the President of the United States, and no one of these five might be a director of any other bank. Two of its three successive presidents-William Jones and Nicholas Biddle-were chosen from among these government directors. The charter made the bank depository of the government and accountable to Congress and the Secretary of the Treasury.

On this depository relation hinged control over the extension of credit by banks in general, which is the essential function of a central bank. The government's receipts arose principally from taxes paid by importers to customs collectors; these tax payments were in bank notes, the use of checks not then being the rule; the bank notes were mostly those of private banks, which were numerous and provided the bulk of the money in circulation; the B.U.S. received these notes on deposit from the customs collectors and, becoming thereby creditor of the private banks that issued them, presented them to the latter for payment. Banks that extended credit properly and maintained adequate gold and silver reserves were able to pay their obligations promptly on demand. Those that overextended themselves were not. The pressure of the central bank upon the private banks was constant, and its effect was to restrict their lending and their issue of notes. In this fashion, it curbed the tendency of the banks to lend too much and so depreciate their circulation.' Its regulatory powers were dependent on the private banks' falling currently into debt to it. The regulatory powers now in effect under the Federal Reserve Act depend upon the opposite relation-that is, upon the private banks' maintaining balances with the Federal Reserve Banks. The private banks were then debtors to the central bank; they are now creditors. The regulatory powers of the United States Bank were simpler, more direct, and perhaps more effective than those of the Federal Reserve Banks, though they would not be so under present-day conditions.

It was notorious that large and influential numbers of the private banks and official state banks resented this regulation of their lending power. All but the more conservative found it intolerable to be let and hindered by the dunning of the B.U.S. and forced to reduce their debts instead of enlarging their loans. Many of them had the effrontery to insist as a matter of right that they be allowed to pay the central bank if and when they pleased. The effort of various states, especially Maryland and Ohio, to levy prohibitory taxes on the United States Bank's branches reflects this desire of the private banks to escape regulation quite as much as it reflects the states' jealousy of their -invaded- sovereignty; the efforts were economic as well as political.

In 183 1, Gallatin commended the bank for its conduct during the twenties; it had -effectually checked excessive issues" by the state banks; "that very purpose" for which it had been established had been fulfilled. On the regulatory operation of the bank, "which requires particular attention and vigilance and must be carried on with great firmness and due forbearance, depends almost exclusively the stability of the currency. . . ." The country's "reliance for a sound currency and, therefore, for a just performance of contracts rests on that institution.- In 1833 he wrote to Horsley Palmer, of the Bank of England, that "the Bank of the United States must not be considered as affording a complete remedy," for the ills of overexpansion, "but as the best and most practicable which can be applied"; and its action "had been irreproachable- in maintaining a proper reserve position---aslate as November 1830." Though Gallatin did not say so, this was in effect praise of Nicholas Biddle's administration of the bank.

The powerful expansion of the economy in the nineteenth century made it necessary for the regulatory action of the bank to be mostly one of restraint, but there was occasion also for it to afford ease as holder of the ultimate reserves and lender of last resort. One of the first things it did was to end the general suspension that the country had been enduring for more than two years; and a crucial factor in the willingness and ability of the private banks to resume payment of their obligations was the pledge of the United States Bank that it would support them. This, Vera Smith writes, was---avery early declaration of the view that it is the duty of the central bank to act as lender of last resort."

The regulatory functions of the bank were not always well performed. Its first president, William Jones, was a politician who extended credit recklessly, rendered the bank impotent to keep the private banks in line, and nearly bankrupted it-all in a matter of three years. Langdon Cheves put the bank back in a sound condition by stern procedures that were unavoidably unpopular. When Nicholas Biddle succeeded Cheves in 1823, the bank was strong in every respect but good will. Biddle repressed the desires of the stockholders for larger dividends, keeping the rate down and accumulating reserves. The art of central banking was not so clearly recognized then as it has since become, but Biddle advanced it, and with better luck he might well be memorable for having developed means of mitigating the tendency to disastrous, periodic crises characteristic of the nineteenth century in the United States.

But Biddle, with all his superior talents, was not very discreet. He had an airy way of speaking that shocked his more credulous enemies and did him irreparable harm; and, when he described the functions of the bank, he contrived to give a livelier impression of its power than of its usefulness. Once when asked by a Senate committee if the B.U.S. ever oppressed the state banks, he said, "never": although nearly all of them might have been destroyed, many had been saved and still more had been relieved. This was ineffable in a man of Biddle's exceptional abilities. It put a normal situation in a sinister and uncouth light. A wanton abuse of regulatory powers is always possible, and abstention from it is not to be boasted of-any more than a decent man would boast of not choosing to be a burglar. By talking so, Biddle made his opponents feel sure he had let the cat out of the bag. For Thomas Hart Benton he had proved entirely too much-that he had a dangerous power "over the business and fortunes of nearly all the people." Jackson referred in his veto to Biddle's remark, and Roger Taney was still shuddering at the disclosure many years later. He believed then and he believed still, he wrote, that there was a scheme to close every state bank in the Union. He believed ---thatthe matter had been thought of, and that the manner in which it could be done was well understood." That people believed such things, Biddle had his own jauntiness, naivete, and political ineptitude to thank.

[ II ]

When Jackson became president in 1829, the B.U.S. had survived what then seemed its most crucial difficulties. The Supreme Court had affirmed and reaffirmed its constitutionality and ended the attempts of unfriendly states to interfere with it. The Treasury had long recognized its efficient services as official depository. The currency was in excellent condition. Yet in his first annual message, Jackson told Congress that "both the constitutionality and the expediency of the law creating the bank were well questioned by a large portion of our fellow-citizens, and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency."

There is nothing remarkable about Jackson's doubts of the bank's constitutionality, for he did not defer his own judgment to John Marshall's nor, in general, had the Supreme Court's opinions attained their later prestige. His statement that the bank had failed in establishing a good currency is more difficult to understand, for it was plainly untrue in the usual sense of the words. But he was evidently using the words in the special sense of Locofoco hard-money doctrine, according to which the only good money was gold and silver; the Constitution authorized Congress to coin it and regulate its value; the states were forbidden to issue paper and the federal government was not empowered to do so. Jackson, wrote C. J. Ingersoll,²considers all the state banks unconstitutional and impolitic and thinks that there should be no
currency but coin.² There were practical considerations no less important than the
legal. It was evident to the antibank people that banking was a means by which a relatively small number of persons enjoyed the privilege of creating money to be lent, for the money obtained by borrowers at banks was in the form of the banks' own notes. The fruits of the abuse were obvious: notes were overissued, their redemption was evaded, they lost their value, and the innocent husbandman and
mechanic who were paid in them were cheated and pauperized. "It is absurd," wrote Taney, ³to talk about a sound and stable paper currency." There was no such thing. So, in Jackson's opinion, if the United States Bank was not establishing a metallic currency, it was not establishing a constitutional or sound and uniform one. His words might seem wild to the contaminated, like Gallatin and Biddle, but they were plain gospel truth to his sturdy antibank, hard-money agrarians.

Hard money was a cardinal tenet of the left wing of the Democratic party. lt belonged with an idealism in which America was still a land of refuge and freedom rather than a place to make money. Its aim was to clip the wings of commerce and finance by restricting the credit that paper money enabled them to obtain. There would then be no vast debt, no inflation, no demoralizing price changes; there would be no fluctuant or disappearing values, no swollen fortunes, and no grinding poverty. The precious metals would impose an automatic and uncompromising limit on the volatile tendencies of trade. "When there was a gold and silver circulation," said an agrarian in the Iowa constitutional convention of 1844, -there were no fluctuations; everything moved on smoothly and harmoniously." The Jacksonians were even more devoted to the discipline of gold than the monetary conservatives of the present century.

There was also a probank, -papermoney wing," which harbored the Democratic party's less spiritual virtues. Its strength lay with free enterprise, that is, with the new generation of businessmen, promoters, and speculators, who found the old Hamiltonian order of the Federalists too stodgy and confining. These were -Democrats by trade," as distinguished from -Democrats in principle"; one of the latter wrote sarcastically in the Democratic Review in 1838, ---Beinga good Democrat, that is to say, a Democrat by trade (Heaven forefend that any son of mine should be a Democrat in principle)-being a good Democrat by trade, he got a snug slice of the public deposites." Fifty years before, business had fostered the erection of a strong federal government and inclined toward monopoly; in the early nineteenth century it began to appreciate the advantages offered by laissez faire and to feel that it had more to gain and less to fear from the states than from the federal government. This led it to take on the coloration and vocabulary of Jacksonian democracy and to exalt the rugged individualism of the entrepreneur and speculator along with that of the pioneer.

The private banks and their friends had helped to kill the first Bank of the United States twenty years before, but the strength they could muster against the second was much greater. Herein lies the principal difference between the situation of the old bank when Jefferson became president in 1801 and the situation of the second when Jackson became president in 1829. Both men disapproved of the national bank and yet were inhibited by its being accepted in their own party and performing well its evidently important functions. There were also the differences that Jefferson was more amenable to reason than Jackson, that he had in Gallatin a better adviser than any Jackson had, and that the bank was under a more passive management in his day than in Jackson's. But of most importance was the greater pressure the private banks were able to exert in Jackson's time than in Jefferson's. Between 1801 and 1829 their number had greatly increased, as had the volume of their business and the demand for credit. The records indicate that in 1801 there were 31 banks, in 1829 there were 329, and in 1837 there were 788-an increase of 140 percent during Jackson's administration alone. These banks were associated to a marked extent with the Democratic party, especially in New York. Their opposition to federal regulation was therefore far greater in 1829 than in 1801, and it did more for Jackson's victory over the national bank than did the zeal of his hardmoney Locofocos. De Tocqueville wrote that "the slightest observation" enabled one to see the advantages of the B.U.S. to the country and mentioned as most striking the uniform value of the currency it furnished. But the private banks, he said, submitted with impatience to ³this salutary control- exercised by the B.U.S. They bought over newspapers. "They roused the local passions and the blind democratic instinct of the country to aid their cause. . . ." Without them, it is doubtful if the Jacksonians could have destroyed the B.U.S.

The Jacksonian effort to realize the hardmoney ideals was admirable, viewed as Quixotism. For however much good one may find in these ideals, nothing could have been more unsuited than they were to the American setting. In an austere land or among a contemplative and self-denying people they might have survived but not in one so amply endowed as the United States and so much dominated by an energetic and acquisitive European stock. Nowhere on earth was the spirit of enterprise to be more fierce, the urge for exploitation more restless, or the demand for credit more importunate. The rise of these reprobated forces spurred the agrarians, and as business itself grew they came to seek nothing less than complete prohibition of banking. Yet they chose to destroy first the institution which was curbing the ills they disapproved, and to that end they leagued with the perpetrators of those ills. Jackson made himself, as de Tocqueville observed, the instrument of the private banks. He took the government's funds out of the central bank, where they were less liable to speculative use and put them in the private banks, where they were fuel to the fire. He pressed the retirement of the public debt, and he acquiesced in distribution of the federal surplus. These things fomented the very evils he deplored and made the Jacksonian inflation one of the worst in American history. They quite outweighed the Maysville veto, which checked federal expenditures on internal improvements, and the specie circular, which crudely and belatedly paralyzed bank credit.

As a result, Jackson's presidency escaped by only two months from ending like Hoover's in 1933. Far from reaching the happy point where the private banks could be extirpated and the hands of the exploiters and speculators could be tied, Jackson succeeded only in leaving the house swept and garnished for them; and the last state of the economy was worse than the first. He professed to be the deliverer of his people from the oppressions of the mammoth-but instead he delivered the private banks from federal control and his people to speculation. No more striking example could be found of a leader fostering the very evil he was angrily wishing out of the way.

But this was the inevitable result of the agrarian effort to ride two horses bound in opposite directions: one being monetary policy and the other states' rights. Monetary policy must be national, as the Constitution doubly provides. The agrarians wanted the policy to be national, but they eschewed the practicable way of making it that, and, instead of strengthening the national authority over the monetary system, they destroyed it. Where they were unencumbered by this fatal aversion to centralized power, they accomplished considerable. In Indiana they set up an official State Bank, with branches, which from 1834 to 1853 was the only source of bank credit permitted and yet was ample for all but the most aggressive money-makers, who finally ended its monopoly. In Missouri, they established the Bank of Missouri, with branches, a state monopoly which lasted from 1837 to 1857, when it too succumbed to free enterprise. And in Iowa, another monopoly, the Bank of Iowa, with branches, was in operation from 1858 till 1865, when free banking penetrated the state under authority of the National Bank Act. These instances indicate that if the hard-money agrarians had had a conception of national government less incompatible with their social purposes, they might have tempered rather than worsened the rampant excesses of nineteenth-century expansion that so offended them.

But as it was, they helped an acquisitive democracy take over the conservative system of bank credit introduced by Hamilton and by the merchants of Philadelphia and New York and limber it up to suit the popular wish to get rich quick. Wringing their hands, they let bank credit become the convenient key to wealth-the means of making capital accessible in abundance to millions of go-getting Americans who otherwise could not have exploited their natural resources with such whirlwind energy. The excesses of that energy have forced the Jacksonian hard-money heroics to be slowly undone: the federal government's authority over money, the Treasury's close operating contact with the banking system, and the central-bank controls over credit have been haltingly restored. Credit itself, in the surviving American tradition, is not the virus the agrarians held it to be but the lifeblood of business and agriculture, and the Jacksonian hardmoney philosophy has been completely forgotten, especially by Jackson's own political posterity.

Jackson had not committed himself against the bank during the early part of his first term but worried both those who wanted him to support recharter and those who wanted him to prevent it. In November 1829 he was friendly to Biddle and assured him that he had no more against the B.U.S. than against---all banks." The next month he slurred the bank in his message to Congress. In 1831 when the cabinet was changed, two important portfolios went to friends of Biddle: Livingston became Secretary of State and McLane Secretary of the Treasury. Both wanted the bank continued and hoped to influence Jackson. Biddle deferred to their hopes, but the tension was evidently too severe for him. The bank's enemies were growing more provocative, and in the summer of 1831 his brother, a director of the bank's St. Louis branch, was killed in a duel, more than usually shocking, which arose from the controversy over recharter. Whatever the reasons, he let impatience get the upper hand and decided that the bank, without further temporizing, should ask Congress that the charter be renewed.

Jackson was offended by this direct action, and notwithstanding improvements in the new charter and concessions to his views, he vetoed the bill of renewal. The economic reasoning of the veto message was, in Catterall's language, -beneath contempt," and the most appealing allegations in it were -demonstrably and grossly false.---Biddle was deluded enough to have 30,000 copies printed and distributed in the bank's own interest. One may regard this as evidence of contempt for Jackson or of a faith in the democracy as sincere as Jackson's own; but it is also evidence of the limitations on Biddle's political sense. In the election that fall the bank was the leading issue, and hopes for recharter went to nothing with Jackson's overwhelming majority. Jackson's purpose now was to stop using the bank as government depository. How firmly accepted it was in Washington as the peculiar agency of the government is indicated by the resistance he encountered. He had to get rid of two Treasury heads successively before he found a third who would execute his wishes, the law giving only the Secretary of the Treasury the power to remove the government's deposits from the bank; and he had also to disregard a House resolution declaring that the government deposits were safe as they were.

With loss of the deposits, the bank lost the means of regulating the private banks' extension of credit. Biddle had made enough mistakes already, but he now made the fatal one of failing to resign and let the bank be liquidated; there is a limit beyond which the head of a central bank cannot decently go against the head of the government, even when he is right and the head of the government is wrong. Moreover, although a central bank is a very useful institution, it never possesses the kind of virtues that count in conflict against an intensely popular leader. By resigning, Biddle would have stultified Jackson and justified himself, as it turned out; for when the panic came in 1837, Jackson would have got the blame, with considerable justice. Furthermore, Biddle would have spared himself a tragic end. The bank was in a better condition than it came to be later, and conditions were much more favorable for liquidation, in spite of the recession of 1833-1834. Incidentally, this recession was produced, it was averred, by a vindictive curtailment of the bank's loans. There certainly was resentment mixed into the bank's policy, but on the other hand, the bank could not go out of existence, as its enemies desired, without curtailing its credit, and curtailment is always unpopular, scarcely less in a period of general expansion than in one of depression.

Instead of going out of existence the bank became a private corporation under Pennsylvania charter in February 1836, a fortnight before its federal charter expired. A little more than a year later the panic of 1837 broke. It began May 10 and involved all the banks in the country, about 800 in number, with an aggregate circulation of $150,000,000 and deposits of $125,000,000. It precipitated three distinct monetary programs-one of hard money by the antibank administration in Washington, one of easy money by Biddle in Philadelphia, and one of convertibility by the banks of Wall Street under the sage but incongruous leadership of the venerable Jeffersonian, Albert Gallatin.

The administration, with Van Buren now president, took the opportunity to urge an independent Treasury system, with complete -divorce of bank and state.---Its course was that urged by Jackson, who wrote, July 9, 1837:
Now is the time to separate the Government from all banks, receive and disburse the revenue in nothing but gold and silver coin, and the circulation of our coin through all public disbursements will regulate the currency forever hereafter. Keep the Government free from all embarrassments, whilst it leaves the commercial community to trade upon its own capital, and the banks to accommodate it with such exchange and credit as best suits their own interests-both being moneymaking concerns, devoid of patriotism, looking alone to their own interestsregardless of all others. It has been, and ever will be a curse to the Government to have any entanglement or interest with either, more than a general superintending care of all, Wall Street paid little attention to this program but set about preparations to resume specie payments as soon as possible, getting its own house in order and urging the banks elsewhere to send delegates to a convention---for the purpose," in Gallatin's words, "of agreeing on a uniform course of measures and on the time when the resumption should take place."

Nicholas Biddle took a course opposed to that of both Wall Street and the administration. He demanded that the Treasury scheme be abandoned and the specie circular repealed. He contended that Jackson's policies were responsible for the financial distress and that the basic condition of recovery was their repudiation by Congress. Till these things were done, the banks should not resume redemption of their notes. Wall Street's program he denounced as premature and sacrificial. He advocated instead an active and flexible policy that should be remedial for the prostrate economy-that should check the credit contraction and the fall of prices. His own objects during the past eighteen months, he wrote James Gordon Bennett, October 1838, had been ---tosustain the national character abroad by paying our debts and at the same time to protect the securities and the staples of the country from the ruinous depreciation to which they were inevitably sinking." It was evident to him, he wrote John Quincy Adams in December,---thatif resort was had to rigid curtailments, the ability to pay would be proportionally diminished; .... the only true system was to keep the country as much at ease as consisted with its safety, so as to enable the debtors to collect their resources for the discharge of their debts." Lenity for the banks would mean lenity for their debtors, foreclosures and bankruptcies would be avoided, and values protected from collapse. Suspension, he had already said, was -wholly conventional between the banks and the community" and arose from "their mutual conviction that it is for their mutual benefit."

The situation was one in which the more conservative settled back to let deflation, as it came to be called a century later, run its bitter course; and the hard-money agrarians sardonically joined them in hoping for the worst. But both the agrarians and Wall Street testified to the popularity of Biddle's ideas. Governor Ford of Illinois observed, with the sarcasm of a hard-money Democrat, that although the banks owed more than they could pay and although the people owed each other and the banks more than they could pay, "yet if the whole people could be persuaded to believe the incredible falsehood that all were able to pay, this was 'confidence. "In Wall Street it was said that suspension made lawbreakers of every one. "Instead of the permanent and uniform standard of value provided by the Constitution, and by which all contracts were intended to be regulated, we have at once fifty different and fluctuating standards, agreeing only in one respect, that of impairing the sanctity of contracts." The believers in Biddle were themselves eloquent in the new faith. Following the later debacle of the B.U.S., the Philadelphia Gazette said: "The immediate effect of the suspension will be an ease in the money market, a cessation of those cares and disquietudes with which the business men of our community have been annoyed.... The great error ... to which all subsequent errors are in a measure to be traced was in the premature resumption in August 1838.... The banks are just as good, and better and more solid, under a season of suspension as under its opposite."

Meanwhile, the New York banks had succeeded in resuming payment of their obligations, May 10, 1838, the anniversary of the suspension. This was a real hard-money achievement, due largely to Gallatin and the Bank of England, in which the professedly hard-money administration had little if any part. Instead it had to violate with its eyes open the professions that Jackson had violated without knowing what he was doing. While still trying to distribute a federal -surpluswhich had turned into a deficit, it had to resort to issues of Treasury notes, which its hardmoney zealots believed unconstitutional. It had to go still further and tolerate what Biddle had demanded: the specie circular was repealed in May 1838, the subtreasury bill was defeated in June, and in July the Treasury had to accept-to its substantial relief-a credit of four to five million dollars on the books of the Bank of the United States in anticipated payment of amounts due the government in liquidation of its shares. This last transaction made the bank a depository of the government some five years after Jackson had ordered that its predecessor, a better institution, cease to be used as depository.

By the fall of 1838, banks everywhere were back on a specie basis, and, although this was mainly due to the efforts of Wall Street and Albert Gallatin, it was Biddle who had the prestige. He was riding on the crest.---Allthat it was designed to do has been done," he wrote to John Quincy Adams in December 1838; and he was about to retire. Two months later, February 1839, he was Van Buren's guest of honor at the White House.---Thisdinner went off very well," according to James A. Hamilton, -Biddle evidently feeling as the conqueror. He was facetious and in intimate converse with the President." A month later Biddle retired from the bank, its affairs being, he said, in a state of great prosperity and in able hands. The same day the directors were unanimous in describing him as one who had "performed so much and so faithfully- and was leaving the bank "prosperous in all its relations .... and secure in the respect and esteem of all who are connected with it in foreign or domestic intercourse."

Six months later, in the fall of 1839, the bank suspended payment of its obligations. It resumed and then suspended again. In 184 1, after two years of dismayed inquiry and recrimination, it was assigned to trustees for liquidation....

Two things combined to give Biddle's fall a supererogatory blackness. One was the sheer drama of the event. The largest corporation in the country-one of the largest in the world-had fallen suddenly from its splendid success into sprawling collapse at the very feet of the genius who had only recently with grand gestures relinquished its management. It was a denouement that stimulated the imagination to make worse what was already bad enough. The other aggravation of the story came from political
motives. Biddle and the bank had never been warmed to by the Whigs, and Biddle's own ties were less with them than with the Democrats, but the latter naturally sought to make the bank seem Whig. They had great success; the debacle helped to disintegrate the Whigs and strengthened the Jacksonians immeasurably. As a result, partisan views have dominated subsequent judgments and given Biddle the incidental and thankless role of darkened background to the glories of Andrew Jackson; and his achievements in credit policy, especially in the earlier and more admirable phase when he was a pioneer central banker, have been forgotten. Nowhere has he been studied adequately in his own right as a man of significant accomplishments, shortcomings, and misfortunes. Yet, in intellectual capacity, force of character, public spirit, and lasting influence, he was comparable with any of the contemporaries of his prime.

The withering that overtook Biddle's fame did not extend to his philosophy and example, which turned out to be triumphant, though with no acknowledgment to him. The monetary views of Gallatin and of Jackson are both obsolete, but Biddle's have a sort of pragmatic orthodoxy. He sought to make monetary policy flexible and compensatory rather than rigid. His easy-money doctrine had its source in a vision of national development to which abundant credit was essential. The majority of his countrymen have agreed with him. They have dismissed the man, but they have followed his ideas, especially his worse ones. They have shared his bullishness and his energy. They have not liked Jackson's primitive ideals of a simple, agrarian society, except in their nostalgic moods. They have not understood Gallatin's noble aversion for the fierce spirit of enterprise. They have exploited the country's resources with abandon, they have plunged into all the debt they could, they have realized a fantastic growth, and they have slighted its cost. Gallatin personified the country's intelligence and Jackson its folklore, but Biddle personified its behavior. They closed their careers in high honor-he closed his in opprobrium and bewilderment.