Nicholas Biddle, President of the Second Bank of the United States (1786 - 1844) MP

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About Nicholas Biddle, President of the Second Bank of the United States

http://en.wikipedia.org/wiki/Nicholas_Biddle_(banker)

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

Nicholas Biddle was born in Philadelphia, Pennsylvania. Ancestors of the Biddle family immigrated to Pennsylvania when William Penn visited, 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. Also, an uncle with the same name, Nicholas Biddle, whose residence was in Philadelphia, was an early naval hero. Another uncle, Edward Biddle, was a member of the Congress of 1774. Young Nicholas Biddle was very bright and he would become well educated; as he was enrolled at a prestigious academy in Pennsylvania at a very early age. Due to his rapid educational progress, he entered the University of Pennsylvania at the age of 10. When the university refused to award the teenager a degree, he transferred to Princeton and graduated in 1801, at 15, the class valedictorian. His older brother, Thomas Biddle, was a War of 1812 hero, who would die in a duel defending the honor of Nicholas.

Biddle was offered an official position before he had even finished his law studies. As secretary to John Armstrong, a United States minister to France, he went abroad in 1804, and was in Paris at the time of Napoleon's coronation. Afterward, he 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 with Cambridge professors involving comparison between modern Greek dialect and that of Homer; the incident captured Monroe's attention.

In 1807, Biddle returned home to Philadelphia. He practiced law and wrote, contributing papers to different publications on various subjects, but chiefly in the fine arts. He became associate editor of a magazine called Port-Folio, which was published from 1806 to 1823. He married Jane Margaret Craig (b. 1792) in 1811, and together they had six children.[1] When editor Joseph Dennie died in 1812, Biddle took over the magazine and lived on 7th St near Spruce Street.

Lewis and Clark

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 in the work, as he was elected to the state legislature (1810–1811) and was compelled to turn over the project to Paul Allen (editor), who supervised its publication. With the consent of all parties, Allen was then recognized as the editor.[2] Nevertheless, Robert T. Conrad has said that Biddle actually wrote the two volumes from Lewis and Clark's notes.

Pennsylvania legislature

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 Pennsylvania 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 federal government director. Upon the resignation of Bank president Langdon Cheves in 1822, Biddle became president. During his association 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. For many years after, it 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. In late 1818, $4 million of interest payments on the bonds sold in 1803 to pay for the Louisiana Purchase was due, in either gold or silver, to European investors. 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 the 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 rather sudden 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 his debts in this period. He developed a lifelong hostility to all banks that were not completely backed by gold or silver. This meant, above all, the Second Bank of the United States.

On August 26, 1831, Biddle's brother, Thomas, 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 just 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 the bank, which was being pushed by Senator Henry Clay of Kentucky in preparation for another Presidential run later that year. Jackson, well-known as a man whom one did not want to anger, still harbored ill will towards Clay from the 1824 Presidential election. Clay's strategy failed, and Jackson gained great support from the public for his veto. Clay lost to Jackson again in November despite massive funding of over $3 million in bankers' support.

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 to 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 had lost its biggest depositor, by far.

To fight back, Biddle decided to shrink the money supply and cause a recession in 1834 in order 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. And so, the Bank was doomed. Its charter expired 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. Biddle was arrested and charged with fraud; he was later acquitted. He died soon after while still involved in civil suits.

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.

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Nicholas Biddle, President of the Second Bank of the United States's Timeline

1786
January 8, 1786
1815
May 8, 1815
Age 29
1819
1819
Age 32
1823
1823
Age 36
1844
February 27, 1844
Age 58
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