The rise and fall of a financial titan

Perhaps best known today as Broadway's answer to "How can history be made relevant," to contemporaries Alexander Hamilton was notorious for his support of central banking. In the 19th century, however, it was another banker that stole the spotlight: Philadelphian Nicholas Biddle.

The fledgling country's dire financial situation in 1816 - specie-starved and saddled with crippling wartime debt from its recent bout with the British - led President James Madison to reauthorize the Second Bank of the United States for 20 years. (The charter of Hamilton's First Bank of the United States had lapsed in 1811.)

Its ham-fisted handling of the "Panic of 1819" - Americans' first major peacetime financial crisis - aroused the animal spirits of many who doubted the bank's efficacy and constitutionality.

Enter Nicholas Biddle. The scion of a wealthy family who cut his financial teeth auditing the Louisiana Purchase, Biddle was appointed the bank's third president in 1823. By the close of the decade, his deft management had done much to bolster the bank's public image and shore up the nation's fiscal policies.

This changed, however, with the 1829 inauguration of Andrew Jackson, a man suspicious of fiat money in general and fearful of central banks' power in particular. Old Hickory summed up his feelings while addressing a delegation of bankers: "You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."

For the populist Jackson, Biddle could not have been a more tempting target: urbane and literary, Biddle had little in common with the Tennessee frontiersman now sitting in the White House.

Biddle, for his part, wasn't fond of the seventh president, either. "This worthy president thinks that because he has scalped Indians and imprisoned judges, he is to have his way with the bank," he wrote in 1834.

A personal animus between the two soon played out in the panels of newspapers' political cartoons, in a tussle that became known as the "Bank War."

While Jackson was certainly antagonistic, Biddle's hypersensitivity sealed his - and the bank's - fates. Intentionally curtailing credit to punish Jackson and his supporters, Biddle confirmed the worst suspicions surrounding central bankers. Mobs of angry Philadelphians swarmed his home in 1834, and efforts to extend the life span of the central bank were soon abandoned.

The Federal Reserve system, the current central bank, would not emerge until 1913.

Today, the Second Bank's value is denominated not in bills and notes, but rather in fine art and architectural significance. A Greek revival building at 420 Chestnut St. modeled on the Parthenon, it has been converted into a portrait gallery boasting 85 portraits by Charles Willson Peale and is open to the public.

This month, the Historical Society of Pennsylvania completed its three-year project to conserve and organize 650 volumes from the Bank of North America. Proposed by Robert Morris and Alexander Hamilton and chartered by the Second Continental Congress in 1781 - a decade before the First Bank of the United States - its records are now available for research.

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