Post-Revolutionary War to Civil War
1840 (Third) Bank of the United States of America Issued Partly-Printed and Issued Stock Certificate for 20 Shares
October 19, 1840-Dated, Partly-Printed Document, The (Third) Bank of the United States of America, Issued Stock Certificate for 20 Shares, Choice Very Fine or better.
The Third Bank of the United States was founded out of a desperation to stabilize the currency by the administration of U.S. President James Madison. President Andrew Jackson had a famous dispute with the bank's president, Nicholas Biddle. It lost its federal charter in 1836, and ceased operations in 1841.
This lovely Partly-Printed Document measures about 10" x 7" and is printed on bond paper. Being an Issued Stock Certificate for "20 Shares" to "Charles Morris of the Inner temple, London Esquire & John Parkinson of Argyle Street, London Esquire..." Imprint of Underwood, Bald, Spencer & Hufty. Boldly printed Certificate with uniform pattern lathe frame design all around. Top center, under frame, white outlined title on banner on shaded lathe. Left of obligations, lovely vignette with Ms. Liberty, American Eagle and Shield with Sailing Ship behind, engraved near top left on this share type.
To right, obligation in mixed fonts. Signature spaces for bank officers at bottom. Ornate embossed bank seal in lower left blank space. Fully accomplished ans signed, clean and bold in appearance, thus excellent for display. Provenance Ex: Stack's NY Americana Sale, January 2011.
The Third Bank of the United States was founded out of a desperation to stabilize the currency by the administration of US President James Madison. President Andrew Jackson had a famous dispute with the bank's president, Nicholas Biddle. It lost its federal charter in 1836, and ceased operations in 1841.
The "Bank War" began when President Andrew 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.
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, but there were also pressures for an early application emanating from the Bank's stockholders and board of directors.
President Jackson vetoed the bill in a stunning move that carried significant consequences for the relationship between Congress and the executive branch. 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 and continued to harbor resentment toward Clay from the earlier "Corrupt Bargain" accusation following the presidential election of 1824.
At Biddle's direction, the Bank poured tens of thousands of dollars into a campaign to defeat Andrew Jackson in the 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.
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.
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. Ultimately, Clay's strategy failed, and in November he lost handily to Jackson, who was reelected to a second term.
In early 1833, President Andrew Jackson, despite opposition from some members of his cabinet, decided to withdraw the Treasury Department's public (or federal) deposits from the Bank.
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 State Department. 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.
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.
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. 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.
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. It was in the later years of his career that Biddle began to invest significant financial resources not only in internal improvement projects, but also in the booming expansion of land, cotton, and slavery in the Old Southwest.
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. 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.
Indeed, post-notes issued by the BUSP helped conclude one of the treaties that removed the Cherokee from their ancestral lands. In addition, Biddle purchased bonds in the Republic of Texas, opposed territorial expansion into Oregon, and denounced abolitionists.
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 greater on 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.
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.
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. Biddle was arrested and forced to pay compensation to creditors using the remainder of his personal fortune. The charges were later dismissed.
On February 27, 1844, at the age of fifty-eight, Biddle died at the Andalusia estate from complications related to bronchitis and edema. Funds from his wife's family supported the ongoing civil lawsuits that plagued Biddle toward the end of his life.
KEYWORDS:
American Banking System, U.S. President James Madison, President Andrew Jackson, Bank of the United States