The organization of many local banks followed the refusal to renew the charter of the First Bank of the United States, which had expired in 1811. These new banks, together with the existing war - 1812 - with England, produced wild financiering and bank note inflation. As a check upon these local banks and as a means of returning to specie payments, the Second Bank of the United States was chartered by Congress, April 10, 1816. It was to run for twenty years, and was established at Philadelphia, with nineteen branches in other parts of the country. The capital was $35,000,000, to which the Government subscribed for one-fifth. The charter provided for the deposit of public moneys in the bank, unless otherwise ordered by the Secretary of the Treasury. At first, the bank was not a marked success; there was more or less scandal attached to it. It went to the verge of bankruptcy as the result of the most flagrant kind of bad banking, and, instead of proving a check to the local banks in their wild careers, it excelled them in their own loose methods. Later, it became a sound and solid institution, and grew to have twenty-five branches.

Twenty directors were elected each year by the stockholders, and five appointed by the President, subject to the confirmation of the Senate. During most of the bank's existence - from 1823 until the charter expired - it was under the Presidency of Nicholas Biddle, who was both a Government director and an elected director, so during his management there were but twenty-four directors altogether.

Trouble was precipitated by opposition to the management of the Portsmouth, N. H., branch. President Jackson grew hostile to it, probably on account of not being able to control the bank's appointments and actions politically. Jackson had collected around him a little coterie of well-known characters, other than members of his cabinet, who were referred to as his "Kitchen Cabinet," prominent among whom were Duff Green and Francis P. Blair, aided by their newspapers, Isaac Hill, of New Hampshire, and Amos Kendall, of Kentucky. As Sumner well puts it, "Andrew Jackson's power and popularity, moving now under the impulse of the passions which animate an Indian on the war-path, were the engine with which these men battered down a great financial institution." An effort was made to renew the charter in 1832, and, although passed by Congress, was vetoed by Jackson. In 1833 he ordered the public moneys to be no longer deposited in the bank, but distributed among certain State banks.

Jackson professed to believe, as is shown by his message of 1835, that the bank had been in opposition to the Government for four years, which proved the evil effects of such an institution. He declared the bank to belong to a system of distrust of the popular will as a regulator of political power, and to a policy which would supplant our system by a consolidated government.

There had been more or less opposition to the bank throughout the country. At one time, the popular feeling was such that Kentucky and other States tried to tax the branches out of existence. The local banks naturally anticipated with pleasure the removal of their large competitor, and quite generally lent their aid to Jackson's scheme of destruction.

Life of Andrew Jackson by William Graham Sumner. From this admirable volume, and John Fiske's " History of the United States," the writer drew largely for information regarding the bank.

There was quite a general belief that the bank had too great a monopoly. There was an objection to the large foreign stockholding; the system of making payments at one branch with drafts on another was a grave error, etc., but in spite of all this, there was a great public confidence in the bank which nothing was able to shatter, as is evidenced by the following figures: On January 1, 1833, previous to the removal of the Government deposits, the assets stood at $80,800,000; liabilities, $37,800,000; besides a capital stock of $35,000,000, for the payment of which there was $43,000,000. The circulation was $17,500,000.

The Government shares were paid off at the rate of $115 per share. In January, 1836, about two months before the bank went out of business, the stock was quoted at $116.