A lot of what follows below is from my book, which is due to come out in January with the University Press of Kansas. I have added in some things for clarity and to walk the reader slowly through all of the evidence. Most of my book deals with how both sides in the Bank War engaged nationwide communications networks funded by public and private money. The Bank used its interregional network of branch offices and subsidized newspaper editors with loans and printing orders while the Jacksonians appropriated the powers of the federal bureaucracy, including the Post Office, to defeat the Bank. So the topic of this post is only a sub-argument of one chapter. If what you read below seems a bit too insider baseball and lacks context, you can always buy my book! I'm such a great capitalist, right?
My basic point is this: it was not Clay and Webster, but Thomas Cadwalader and the Bank’s board of directors, who were most influential in pushing Biddle for re-charter. On September 1, 1831, Biddle attended an important board meeting in Philadelphia with the Bank’s leading stockholders, directors, and managers. The purpose of this gathering of financial higher-ups was to comment on the condition and future of the Bank. Biddle submitted a report to the stockholders detailing the Bank’s assets and liabilities, and the Bank paid for its printing and dispersal. One section stated, “[The Bank’s] circulation is in all respects equal, and in most respects superior, in value, to any metallic currency of the same amount” and went on to say that never had there been any paper currency, spread out over such an extensive country, that was comparable to the Bank’s bills and notes in its security, convertibility, and uniformity of value. This was strikingly similar in tone and language to the early-1830 reports on the Bank’s currency presented in the Senate by Samuel Smith and in the House by George McDuffie. One likely explanation is that Biddle had authored all three reports.[ii]
According to the Bank’s charter, this type of meeting only happened every three years, which meant that the next meeting would not convene until September 1834. If one assumed that procuring a bill to re-charter the Bank, and then passing it through Congress, would take several months, then waiting until the next triennial meeting to authorize an application to re-charter would fall perilously close to the Bank’s expiration in March 1836. Most businessmen dread uncertainty and for an institution as economically influential as the BUS, it was not unreasonable to wonder if the Bank, once discontinued, might have to wind up its affairs and call in all of its obligations with potentially disruptive consequences. Put another way, if the Bank wanted to apply without unsettling risks, it needed to apply now. The power that the stockholders invested in the Bank’s president and directors was broad and elastic: “if at any time before the next triennial meeting… it shall be deemed expedient by the president and directors to apply… for a renewal of the charter… they are hereby authorised to make such application.”[iii]
Having received the go-ahead from the board, Biddle needed to find the right time to submit his application for re-charter to Congress, which involved delicate political considerations and a range of options. I would group the four different options as follows:
Option 1: pass the Bank bill and try to get a 2/3 majority to override the president’s veto. This was only a remote possibility. Party discipline was already a key attribute among Jacksonian politicians and enough congressmen would rally to the president’s aid under almost any circumstance.
Option 2: modify the Bank’s charter enough to assuage Jackson’s objections. In many ways this is what actually transpired (see Chapter 4 of my book), but many Bank War scholars have missed or downplayed the ways in which Jackson was fairly consistent in his opposition to the Bank. Biddle hoped to reach an agreement with Jackson over a significantly modified bill to re-charter with the likes of Treasury Secretary Louis McLane, William Berkeley Lewis, and Secretary of State Edward Livingston acting as intermediaries. McLane had authored a report praising the Bank’s functions and recommending re-charter “at the proper time” while the president had refrained from criticizing the Bank in his third annual message to Congress, feeding rumors that Jackson might be softening his stance.[iv] The most intimate of Jackson’s correspondents knew otherwise. As a somewhat irritated Jackson wrote to John Randolph, “You have done me no more than justice when you repelled with indignation that I had changed my views of the Bank of the United States.” The president declared emphatically, “I have uniformly on all proper occasions held the same language in regard to that institution.”[v] In volume 10 of the Jackson Papers, see Jackson’s letters to John Coffee and Alan Ditchfield Campbell for more of his consistency on the Bank question. The unfortunate reality for Biddle was that he almost never corresponded with Jackson directly and the intermediaries he used may have overestimated their ability to persuade the president. When viewed in combination with Jackson’s call for a substitute national bank in 1829 upon entering office, Jackson’s letter to Randolph illustrates that, contrary to what some scholars have speculated, the president was rather consistent in opposing the BUS even if many of his cabinet members were open to a modified re-charter.[vi]
Option 3: wait until after the presidential election of 1832: There were some who cautioned Biddle not to provoke Jackson until after the presidential election. This contingent included one of the Bank’s cashiers, Edward Shippen, Senator Samuel Smith of Maryland, and McLane. Jackson, they said, would interpret an early application as a hostile act and would place the Bank question at the center of the upcoming election. As I show below, this was Clay’s view in 1830.
Option 4: Submit now because Jackson would certainly veto in his second term if he won reelection. The men who vouched for option 4 assumed that while an early application carried risks and Jackson’s future behavior was unpredictable, the president would have almost no incentive to compromise with Biddle during a second presidential term. Submitting early could potentially corner Jackson into taking an unpopular stance, which would weaken his support before the fall elections. Representatives Charles Fenton Mercer and George McDuffie in the House and Senators Clay and Webster were in this camp. On December 15, 1831, Clay wrote to Biddle, asking if the Bank president had decided to apply early. Clay stated, “The course of the President, in the event of the passage of a bill, seems to be a matter of doubt and speculation. My own belief is that, if now called upon [Jackson] would not negative the bill; but that if he should be re-elected the event might and probably would be different.” This was hardly a gung-ho, ringing endorsement of an early application as Clay expressed some doubts about Jackson’s views. We should emphasize that Biddle informed Clay a week later, on December 22, that “nothing is yet decided” on whether he would apply early.[vii]
There’s an important context to consider when we look at Clay’s letter to Biddle from December 1831. In September 1830, the Kentuckian wrote a missive to the Bank president. I’ve summarized much of it, but interested readers can look to pages 263-264 of the Seager and Hay volume. Essentially, Clay argued that to renew the Bank’s charter, they needed the president to acquiesce because they would never get a 2/3 majority in both houses of Congress. He wrote, “If you apply at the next Session of Congress, you will play into the hands of that party. They will most probably, in the event of such application, postpone the question, until another Congress is elected.” The Jacksonians, Clay predicted, would point out that there were still several years remaining in the Bank’s charter and that they ought to ascertain and follow public sentiment. In the event of a presidential veto, Clay believed that the BUS would become “the controlling question in American politics” and that “The friends of the Bank would have to argue the question before the public against the official act of the President, and against the weight of his popularity.” Unless Biddle could be assured that the president would sign the legislation, Clay held, Biddle should not submit early. The Kentuckian recommended that Biddle wait until after the election of 1832. Biddle wrote back in November 1830, largely agreeing with Clay.[viii] Something had clearly changed by December 1831, when Clay was now advocating an early re-charter. One could presume that Clay’s nomination as the National Republican candidate was one key difference, but what should be emphasized in my view is that Biddle had numerous correspondents, each with different bits of advice.
In the face of conflicting recommendations, Biddle dispatched Thomas Cadwalader to Washington to count votes in Congress and meet with prominent members of the Senate and Jackson’s cabinet. A senior BUS officer and director, Cadwalader was connected to Biddle through marriage and served as the Bank’s acting president when Biddle was absent. Excerpts from a series of letters written between the two men testified to the degree to which Biddle trusted Cadwalader’s opinion. “With you I have no reserves,” Biddle wrote in one letter, and in another, he confided, “I have not said this to anybody except yourself.” As further testimony to the close relationship the two men had, we might consider that Biddle dispatched Cadwalader to Great Britain to negotiate with Baring Brothers concerning payments on the public debt, and all without informing the Bank’s public directors. On December 25, 1831, the ever cautious Cadwalader stated to Biddle, “I do not yet decide – but incline to suppose that after the council at the Treasury, I shall advise the Comee to start the memorial.” A few days later, Biddle firmed up his decision. In a letter to Smith explaining why the Bank was moving forward at this time, Biddle underscored, first and foremost, the desires of the Bank’s stockholders and the need to avoid uncertainty.[ix]
To review, Biddle only made his decision for an early re-charter after hearing from Cadwalader, a colleague and close confidant. In his letter to Smith, the first reason he gave for an early application was avoiding uncertainty—something the Bank’s directors and stockholders emphasized. Clay’s advice in December 1831 marked a shift from a more thoughtful missive he wrote to Biddle in September 1830, where he predicted an early application would play into the Jacksonians’ hands. And while there is some evidence to show that Biddle was uncertain about an early application, he had also been waging a public relations campaign since early 1830 that included small bribes, vote counts, correspondence with financial theorists, loans to members of Congress and printing orders for newspaper editors like Gales and Seaton. Finally, Jackson predicted in his 1829 annual message to Congress that the Bank’s stockholders would submit an early application. He ended up being right.
Some might look at all of this and say, so what? Is there a major theoretical point at stake? My answer is “probably not,” but it’s also important to get the details right and the story straight. There’s a particular problem in the Bank War historiography of uncritically passing down received wisdom throughout the generations; of repeating things over and over that are ultimately based on thin evidence: state banks hated the BUS; Jackson hated paper money; Jackson and Biddle could have compromised. All of these subjects are very complicated. Wilentz and Baptist, who have perpetuated the interpretation that Biddle was caught up in Clay's presidential ambitions, cited only two letters in their endnotes--far less than the amount shown below. And in reexamining these letters from December 1831 and June 1832, respectively, I do not find clear evidence of Clay's political aspirations. The only clear evidence I can see is that both Clay and Webster advocated an early submission for re-charter, against the informed opinions of Biddle's other contacts. In their defense, Wilentz and Baptist were offering sweeping interpretations of broad spans of early American history, and as such, they emphasized breadth rather than depth. On the other hand, it is important to point out when major historians do not have sufficient evidence to support their claims.
I won’t be as bold to claim that what I’ve written above settles the matter once and for all. I’m open to hearing countervailing evidence. But given what I have laid out, I’d hope that any rebuttals would be quite detailed. Is anyone up to the challenge?
[i] Historians who have emphasized Clay’s role in Biddle’s decision to apply for an early re-charter include Robert Remini, Henry Clay: Statesman for the Union (New York: W.W. Norton & Company, 1991), 379; Sean Wilentz, The Rise of American Democracy: From Jefferson to Lincoln (New York: W.W. Norton & Company, 2005), 367–368; and Edward E. Baptist, The Other Half Has Never Been Told: Slavery and the Making of American Capitalism (New York: Basic Books, 2014), 250.
[ii] Niles’ Weekly Register, September 10 and October 8, 1831.
[iii] Ibid. Annals of Congress, House, 14th Congress, 1st Session, Appendix, 1812–1825. House Journal, 21st Congress, 1st Session, 11–28.
[iv] House Journal, 22nd Congress, 1st Session, 9–21; Register of Debates, 22nd Congress, 1st Session, Appendix, 25–33.
[v] Jackson to John Randolph, December 22, 1831, in Daniel Feller et al., The Papers of Andrew Jackson Volume 9, 1831 (University of Tennessee Press, 2013), 782–783.
[vi] For Jackson’s consistent opposition to the BUS, see Jackson to Van Buren, December 6, 1831; Jackson to Hamilton, December 12, 1831; Randolph to Jackson, December 19, 1831, in PAJ 9, 731–733; 768–769; 780–782. Cadwalader to Biddle, December 26, 1831, in Reginald Charles McGrane, ed., The Correspondence of Nicholas Biddle: Dealing With National Affairs, 1807-1844 (Boston: Houghton Mifflin, 1919), 160–161.
[vii] Shippen to Biddle, December 6, 1831; Mercer to Biddle, December 12, 1831; Smith to Biddle, December 17, 1831; Webster to Biddle, December 18, 1831; McLane to Biddle, January 5, 1832, in McGrane, ed., Biddle Correspondence, 88–91; 136–138; 140–146; 154–161; 165–168. Clay to Biddle, September 11, 1830 and December 15, 1831; Biddle to Clay, December 22, 1831, in Robert Seager II and Melba Porter Hay, eds., The Papers of Henry Clay, Volume 8: Candidate, Compromiser, Whig, March 5, 1829-December 31, 1836 (University Press of Kentucky, 1984), 263–264; 432–433; 435.
[viii] Clay to Biddle, September 11, 1830; Biddle to Clay, November 3, 1830, in Seager and Hay, eds., The Papers of Henry Clay, Volume 8, 263-264; 287-288.
[ix] To make the claim that Cadwalader and the Bank’s stockholders were more important in Biddle’s thinking than Clay and Webster, I had to consult a large number of letters, paying close attention to chronology. In December 1830, John Norvell wrote to Biddle, in reference to an early push for re-charter, “In any event, it appears to me to be the interest of the stockholders and officers to bring the matter at once to issue.” McGrane misspelled Norvell’s last name as “Norvall.” Norv[e]ll to Biddle, December 16, 1830; Cadwalader to Biddle, December 20, 21, 22, 23, and 25, 1831; Biddle to Cadwalader, December 24, 1831; Biddle to Smith, January 4, 1832, in McGrane, ed., Biddle Correspondence, 120; 146–158; 161–165. Biddle to Cadwalader, December 29, 1831, in Biddle Papers, LOC.