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Nicholas Biddle (banker)
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Nicholas Biddle (January 8 1786–February 27 1844), was an American financier who served as the president of the Second Bank of the United States.
le was born in Philadelphia, Pennsylvania. Ancestors of the Biddle family immigrated to Pennsylvania with William Penn, and fought in the pre-Revolutionary colonial struggles. Nicholas's father, Charles Biddle, was prominent in his devotion to the cause of American Independence and served as Vice-President of Pennsylvania, alongside President Benjamin Franklin, while his uncle, Nicholas Biddle was an early naval hero.
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Nicholas Biddle (January 8 1786–February 27 1844), was an American financier who served as the president of the Second Bank of the United States.
Ancestry and early life
Biddle was born in Philadelphia, Pennsylvania. Ancestors of the Biddle family immigrated to Pennsylvania with William Penn, and fought in the pre-Revolutionary colonial struggles. Nicholas's father, Charles Biddle, was prominent in his devotion to the cause of American Independence and served as Vice-President of Pennsylvania, alongside President Benjamin Franklin, while his uncle, Nicholas Biddle was an early naval hero. Another uncle, Edward Biddle, was a member of the Congress of 1774. Biddle was well educated; as he began his education at a prestigious academy in Pennsylvania. Due to his rapid educational progression, he entered the University of Pennsylvania at age 10 and when the university refused to award the teenager a degree, he transferred to Princeton and graduated in 1801, at age 15, as valedictorian. His brother was Thomas Biddle, a War of 1812 hero, who would die in a duel defending his brother's honor.
Biddle was offered an official position before he had finished his law studies. As secretary to John Armstrong, a United States minister to France, he went abroad in 1804, was in Paris at the time of Napoleon's coronation, and afterward participated in an audit related to the Louisiana Purchase, acquiring his first experience in financial affairs. Biddle traveled extensively through Europe, returning to England to serve as secretary for James Monroe, then United States minister to the Court of St. James's. At Cambridge, Biddle took part in a conversation involving a comparison between the modern Greek dialect with that of Homer with Cambridge professors; the incident captured Monroe's attention.
In 1807, Biddle returned home to practice law and write, contributing papers on various subjects, but chiefly on the fine arts, to different publications. He became associate editor of a magazine called Port-Folio, which ran from 1806 to 1823. He married Jane Margaret Craig (b. 1792) in 1811, and together they had six children. When editor Joseph Dennie died in 1812, Biddle took over the magazine. Biddle then lived on 7th St near Spruce Street.
Biddle also prepared Lewis and Clark's report of their exploratory expedition to the mouth of the Columbia River for publication, and he encouraged President Thomas Jefferson to write an introductory memoir of Captain Meriwether Lewis. However, Biddle's name does not appear on the work, as he was elected to the state legislature (1810–1811) and was compelled to turn over the project to Paul Allen, who supervised its publication, and, with the consent of all parties, was then recognized as the editor. Nevertheless, Robert T. Conrad has said that Biddle actually wrote the two volumes from Lewis and Clark's notes.
Biddle quickly became prominent in the Pennsylvania legislature. He originated a bill favoring popular education almost a quarter of a century in advance of the times. Though the bill was initially defeated, it resurfaced repeatedly in different forms until, in 1836, the Pennsylvania common-school system was inaugurated as an indirect result of his efforts.
The Bank of the United States
After Biddle moved to the state senate, he lobbied for the rechartering of the Second Bank of the United States. The Bank was rechartered in 1816, and President Monroe appointed Biddle as a government director. Upon the resignation of Bank president Langdon Cheves in 1822, Biddle became president. During his connection with the Bank, he was directed by Monroe, under authority from Congress, to prepare a "Commercial Digest" of the laws and trade regulations of the world, which for many years was regarded as an authority on the subject.
During the Panic of 1819, a banking crisis and economic recession, critics charged that the Bank was to blame because of its tight credit policy. The Bank had no choice. In late 1818, $4 million in payments in either gold or silver were due to European investors on the bonds sold in 1803 to pay for the Louisiana Purchase. The government had to get its hands on silver or gold. The Bank, as the government's fiscal agent, was required to make this payment on behalf of the government. The Bank was forced to demand that commercial banks that had been lent money in the form of fiat paper now repay in gold or silver—specie. This specie was sent to Europe. This contraction of the monetary base after three years of inflated currency and rampant speculation based on debt led to the panic of 1819.
In Tennessee, Andrew Jackson was hard-pressed to pay debts in this period. He developed a lifelong hostility to all banks that were not backed 100% by gold or silver. This meant, above all, the Second Bank of the United States.
On August 26, 1831, Biddle's brother Thomas Biddle, a War of 1812 hero was killed in a duel on Bloody Island (Mississippi River) at St. Louis, Missouri with Congressman Spencer Pettis. Thomas had taken offense to Pettis' criticizing Nicholas at the bank. After an exchange of letters to the editor Biddle accosted an ill Pettis in his hotel room. After Pettis recovered he challenged Thomas to a duel and both were killed when they exchanged shots from five feet apart.
The "Bank War" of 1832-36 was initiated by Biddle when he decided to apply for the Bank's re-charter four years before the charter was scheduled to expire. Until 1832, Jackson for three years had ignored the Bank and Biddle. But, once challenged, he decided to veto the bill to re-charter, which was being pushed by Senator Henry Clay of Kentucky in preparation for Clay's run for the Presidency later that year. Clay's strategy failed, and Jackson gained great support from the public for his veto. Clay lost to Jackson in November.
In early 1833, Jackson decided to pull the government's funds out of the Bank. The Secretary of the Treasury, Louis McLane, was favorable to the Bank. He refused to withdraw the funds and would not resign, so Jackson removed him as Secretary of the Treasury by appointing him as Secretary of State. His replacement, William Duane, deliberately delayed. After waiting four months, Jackson replaced him as well. The third man, his former Attorney General, Roger B. Taney, complied. The funds were transferred to seven state-chartered banks in late September. This put the Second Bank on the defensive. It lost its biggest depositor.
To fight back, Biddle decided to shrink the money supply and cause a recession in 1834 to force Jackson to accept a re-charter bill. The Bank demanded that old loans be repaid. It made no new loans.
There was a brief recession in the first half of 1834, but another bill to re-charter failed in the House on April 4. That was the last time the issue ever came before Congress. The Bank was doomed. Its charter would expire in April, 1836.
Biddle's friends assert that his non-partisanship provoked Jackson's hostility, a claim denied by Jackson's admirers. After the Bank lost its national charter in April, 1836, it continued to operate erratically as a state-chartered bank, partially causing the Panic of 1837.
In 1839, Biddle resigned from his post of Bank President, and in 1841, the Bank finally failed.
He was important in the establishment of Girard College under the provisions of the founder's will. Girard had been the original promoter of the Second Bank and its largest investor. Girard died in 1831.
Nicholas Biddle Estate
The Nicholas Biddle Estate in Bensalem Township, Pennsylvania, also known as Andalusia, is a National Historic Landmark.
Sources
Primary
- McGrane, Reginald C. Ed. The Correspondence of Nicholas Biddle (1919)
Secondary
- Bodenhorn, Howard. A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building (2000). Stresses how all banks promoted faster growth in all regions.
- Hammond, Bray. Banks and Politics in America from the Revolution to the Civil War (1960), Pulitzer prize; the standard history. Pro-Bank
- Remini Robert V. Andrew Jackson and the Bank War: A Study in the Growth of Presidential Power (1967), pro-Jackson.
- Govan, Thomas Payne. Nicholas Biddle: Nationalist and Public Banker, 1786-1844 (1959). Comprehensive biography of Biddle.
- Schlesinger, Arthur Meier Jr. Age of Jackson (1946), Pulitzer prize winning intellectual history; strongly pro-Jackson.
- Taylor; George Rogers, ed. Jackson Versus Biddle: The Struggle over the Second Bank of the United States (1949). Primary and secondary sources.
- Temin, Peter. The Jacksonian Economy (1969).
- Wilburn, Jean Alexander. Biddle's Bank: The Crucial Years (1967). Narrative history, pro-Bank.
- Wilentz Sean. The Rise of American Democracy: Jefferson to Lincoln (2005). Pro-Jackson.
External links
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