If the tariff and land questions had stood alone, the Northeast and the West might have found it easier to draw together in 1830, but the old banking and currency issue that had plagued America since the days of George III was once more to the front in a virulent form.  The second United States Bank, chartered for twenty years in 1816 to enable the Jeffersonians to finance their war, was becoming in the minds of western farmers and eastern mechanics the very citadel of tyrannical money power.

Radical Democrats had denounced it on principle from the beginning and their attacks steadily increased in animosity.  Others acquired their views from practice.  The notes of the Bank, sound throughout the Union, drove from circulation the paper currency of shaky institutions chartered by state politicians, thus inflaming village states-men with anger against the "rich and well-born."  Its managers were accused of showing favoritism to friendly politicians and of discriminating against the followers of Jackson in making loans;  indeed a "psychic injury" of this character, alleged to have been inflicted on one of the President's friends, seems to have been the original source of his special rage against the Bank.  The managers were likewise charged with using their power to contract the currency for the purpose of punishing their enemies, with giving retainers to some of their orators in Congress, and with spending corporate funds for campaign purposes.  So the natural hostility of the masses to the plutocracy was intensified by dark and sinister rumors about a new "corrupt squadron."'

That many of the charges against the Bank were groundless was later revealed by historical research.  If some of Jackson's men were denied loans for business reasons, it was never proved that discriminations were made against Democratic politicians merely on account of their doctrinal views.  If the Bank refused to be used by the brokers in spoils, its motive was economic rather than partisan.  In the beginning at least, its president, Nicholas Biddle, it seems, tried to steer his way "on sound business lines" through the maze of politics.

After the war on the Bank commenced, however, both he and his colleagues laid hold of the various weapons at hand.  From that time forward, the allegation that members of Congress received retainers from the Bank certainly rested on a substantial basis.  In any case its mightiest spokesman in the Senate, Daniel Webster, was on the payroll of the corporation, a fact made clear in distant days by the publication of Biddle's letters and papers.  In those documents it is recorded that, two weeks after the opening of a congressional session in which a battle royal was to be fought over its charter, Webster wrote to Biddle, shrewdly conveying the information that he had declined to take a case against the Bank and adding with charming frankness:  “I believe my retainer has not been renewed or refreshed as usual.  If it be wished that my relation to the bank should be continued, it may be well to send me the usual retainers.”

Equally well established now is the charge that the Bank contracted its loans for the purpose of producing distress and breaking the back of the political opposition.  Beyond all question, in the midst of the contest a term of financial stringency was deliberately inflicted on the country;  Biddle, sure of his ground, declaring to the head of the Boston branch that "nothing but the evidence of suffering abroad will produce any effect in Congress."  Webster himself, convinced that pressure on the populace would be useful, wrote to Biddle that "this discipline, it appears to me, must have very great effects on the general question of rechartering the Bank."

In fact, the private correspondence of the period now open to the student shows that the supporters and beneficiaries of the Bank had effected a strong union of forces for the purpose of controlling a large section of the press, dictating to politicians, frightening indifferent business men, and defying Jackson and his masses.  "This worthy President," laughed Biddle, "thinks that because he has scalped Indians and imprisoned Judges, he is to have his way with the Bank.  He is mistaken."

Pride was, nevertheless, riding for a fall.  Jackson's anger, once aroused, was terrible to behold; it was the anger of the warrior rushing on his foe heedless of wounds and death, not the cold and calculating wrath of the counting house.  Moreover, he had behind him the accumulating discontent of the agrarian and labor elements in the new democracy an unrest which he steadily fanned into flame by very clever tactics.  In his first message to Congress, Jackson attacked the Bank openly but not with might and main.  In his second and third messages, he deftly referred to the subject, warily leaving the decision to "an enlightened people and their representatives."

If the opposition had maintained a discreet silence, a dash might have been avoided; but, boasting of its wisdom, it chose another course.  The Bank was uneasy about the future; and Clay, sniffing the presidential air in 1832, decided to make an issue of it then and there.  Though its charter had four more years to run, the Bank applied for a renewal and Congress, under the leadership of Clay, passed the bill granting the petition.

Jackson's reply to this defiance was a veto and a ringing message calling on the masses to support his position.  Paying his respects to high sentiments, he took his stand by the Ark of the Covenant, declaring the Bank unconstitutional.  Knowing full well that the Supreme Court had held otherwise a few years before, Jackson countered this uncomfortable verdict with the bald statement that each officer took the oath to support the Constitution as he understood it, not as it was understood by others — a doctrine that probably set all aged gentlemen in horsehair and robes trembling for the future of their country, while pleasing Old Hickory's followers immensely.

Having paid his homage to the auspices, Jackson got down to the meat of the matter: the alignment of economic forces.  He called attention to the fact that the people of the western and southwestern states held only $140,000 worth of the twenty-eight millions of capital stock out-standing in private hands, whereas the capitalists of the middle and eastern states held more than thirteen millions.  He pointed out that, of the annual profits of the Bank, $1,640,000 came from nine western states where little or none of the stock was held.

The moral lesson was obvious.  It was an economic conflict that happened to take a sectional form: the people of the agricultural West had to pay tribute to eastern and foreign capitalists on the money they had borrowed to buy land, make improvements, and engage in speculation.  Jackson did not shrink from naming the contestants.  "The rich and powerful" were bending the acts of the government to their selfish purposes;  the rich were growing richer under special privilege;  "many of our rich men ... have besought us to make them richer by acts of Congress.  By attempting to gratify their desires, we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union."

That was indeed a call to arms.  The head of the Bank, Biddle, declared himself delighted with it.  "It has all the fury of the unchained panther, biting the bars of his cage.  It is really a manifesto of anarchy, such as Marat and Robespierre might have issued to the mob."  The President's cheer leaders threw up their hats with sheer joy at the spectacle.  Western farmers had been charged with seeking to avoid their honest debts;  they had replied by asserting that the money they borrowed had been made by the printing presses of the Bank under government authority.  Now Jackson embodied their theories and vehemence in a message.  If there was any frosty philosopher present, looking serenely upon the battle, he has left us no memoirs.

In the election of 1832, after a campaign of unrestrained emotions, Jackson completely discomfited his opponent, Clay, and returned to the White House like a Roman conqueror with his victims at his chariot.  The Bank had fought him; thinking in terms of war, the President proceeded to fight back.  Its charter had four years of legal life remaining; the law could not be repealed by military decree; so other means of attack were found.  Acting as head of the administration, Jackson ordered the Secretary of the Treasury to deposit no more federal revenues in the Bank or any of its branches and to withdraw in the payment of bills the government's cash already in its vaults.  Besides this he distributed the national funds among state banks, remembering to reward those which had correct political affiliations institutions which became known as "pet banks."  As the treasury surplus happened to be mounting, Congress, now in Democratic hands, got rid of it by spreading the money among the state governments, nominally in the form of loans, practically in the shape of gifts.

In 1836 the second United States Bank automatically came to the end of its checkered career and the country under the inspiration of the new democracy entered an epoch of "wild cat" finance.  The very next year, a terrible business depression fell like a blight upon the land, bringing as usual more suffering to farmers and mechanics than to the "rich and well-born";  but this calamity was likewise attributed by the masses to the machinations of the money power rather than to the conduct of their hero, President Jackson.  Nothing would induce them to retrace their steps.  For three decades a union of the South and West prevented a restoration of the centralized banking system.  Not until the planting statesmen withdrew from Congress, and the storm of the Civil War swept minor gusts before it, were the ravages wrought by Jackson repaired by the directors of affairs in Washington.

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After carrying the country in a dust storm[1840], the Whig leaders soon revealed their inmost desires.  If Harrison had not died shortly after his inauguration leaving his high office to the Vice President, John Tyler, they might have gone far on the way toward a restoration of the Hamilton system.  At any rate, with the aid of protectionist Democrats speaking for special constituencies, they were able to push through the tariff act of 1842 raising the customs duties and destroying the compromise measure enacted nine years before.  And, had no factional disputes intervened, they might have established a third United States Bank then and there.

Unfortunately for all designs veering in that direction, their two high captains, Tyler in the White House and Clay in the Senate, were looking beyond immediate results to their own possibilities in the coming election.  The President, a Virginia man originally taken up by the Whigs to catch southern votes, knew very well how unpalatable were Hamilton's doctrines below the Potomac and he would only approve a national bank of restricted powers.  On the other hand, Clay, long associated with financial interests in a practical way, deluded himself into believing that the country was ready for something more thorough.  Neither one of the contestants, therefore, did his best to bring about an accommodation; a fight seemed better to them than a truce.  So Tyler vetoed two bank bills in succession and Clay, turning back to the tactics of 1832, proposed to submit the issue to the voters at the polls.