In Jackson's first State of the Union Address, he made a very measured and moderate statement regarding Nicholas Biddle's Bank. Jackson said it was too soon to consider any proposals to renew the Bank's 20-year charter. In 1829, one could hardly call it a war against the Bank, but perhaps it was a smoke signal to its opponents. Within weeks and months, Jackson supporters and leading Democratic newspapers began publishing scathing opinion pieces to play on the fears of the people and drum up opposition to the Bank.
On April 10, 1816 President James Madison signed into law a 20-year charter for the Second Bank of the United states from February 1816 until January 1836. The bank was a private corporation with public duties including the handling of all fiscal transactions for the U.S. Government. One-fifth of the bank's reserves was held by the U.S. Government making it the single largest stock holder and accountable to both Congress and the U.S. Treasury. The bank served as a repository for public funds which it could use for its own banking purposes without interest.
By Jackson's first year in office the Bank appeared to be on solid footing and was declared to be healthy and stable by the U. S. Treasury, but by then even advocates of the Bank began to concede that the charter gave too much power to a private corporation. Without question, the Bank enjoyed a virtual monopoly over currency and had almost complete control over credit and price levels. Nicholas Biddle, president of the Bank insisted that it was not accountable to the government or the people, and maintained that from the moment the Bank's directors were appointed, they were no longer to be interfered with by anyone in the Government from the President downward. Biddle viewed the bank as an independent corporation on par with the states, beyond political good or evil, but supporters in Congress took a more moderate view similar to what Hamilton described in his Report on the Bank as a "political machine of the greatest importance to the state".
While some conservative Jeffersonians had come to accept the bank as a necessary evil, others were profoundly convinced of the evil of paper money. Andrew Jackson himself had promoted hard-money views for years and had the support of senators like Thomas Hart Benton who concluded after the panic of 1819 that the only safe-guard against future disaster was that the government should only deal in gold and silver. In 1829, one could hardly call the debates over Hamilton's bank versus hard money a war. Even the antagonist views of Jackson's populist supporters had yet to become manifest. Ten years earlier in 1819, the bank recalled species and limited the distribution of paper money leading to a distrust of paper money, but few people in the 1820’s viewed the bank itself as an enemy of the people. Most calls to refuse the re-charter of the bank did not come until 1831 or later. Therefore, it is not surprising to find that in the beginning of December 1829, Jackson was not yet calling for an end to the National Bank. Jackson merely stated that it was "too soon" to present to Congress any proposals to renew the Bank's charters. In later years, Jackson would argue that the Bank was violating state sovereignty, but here in 1829 he was speaking out only against the dangers of paper money and "constitutional difficulties" of putting trust in a private corporation. Nevertheless, his words signaled future actions. Jackson suggested to Congress if a national bank is so important to the fiscal operations of the Government, then perhaps they should consider removing these functions from any private institution and have them be fully controlled by the federal government.
"The charter of the Bank of the United States expires in 1836, and its stock holders will most probably apply for a renewal of their privileges. In order to avoid the evils resulting from precipitancy in a measure involving such important principles and such deep pecuniary interests, I feel that I can not, in justice to the parties interested, too soon present it to the deliberate consideration of the Legislature and the people. Both the constitutionality and the expediency of the law creating this bank are 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 an uniform and sound currency.Just three weeks later, Francis Preston Blair Sr, better known as Preston Blair, editor of the Globe a major newspaper of the Democratic party. In 1829, Blair was an adviser to President Jackson and a major contributor to Amos Kendall's paper the Frankfort Argus in Kentucky. Kendall was a newspaper editor who became Jackson's auditor for the Treasury Department. Blair posted a large-scale blast against the bank where he appealed to the fear of Kentuckians that the Eastern banks were taking control of the government. Throughout the next year, the Argus continued to focus on the power and privileges of the Bank and its consequences on the Commonwealth Bank of Kentucky. The attacks were never on paper money, but rather the undue influence of the National Bank. By doing so, he aligned the latent antagonism of the Western frontier with the enemies of Nicholas Biddle and the Bank in Congress. It was the beginning of the war against the Bank.
Under these circumstances, if such an institution is deemed essential to the fiscal operations of the Government, I submit to the wisdom of the Legislature whether a national one, founded upon the credit of the Government and its revenues, might not be devised which would avoid all constitutional difficulties and at the same time secure all the advantages to the Government and country that were expected to result from the present bank."
References
Presidency.ucsb.edu. (2018). First Annual Message | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/first-annual-message-3 [Accessed 16 Dec. 2018].Schlesinger, A. (1989). The age of Jackson. New York: Book-of-the-Month Club, pp.74-79.
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