Bank Issue in The United States 19th Century

II. Bank issue

          A. Second Bank of the United States

1. Organization: Chartered in 1816 by a nationalist minded Congress, the second Bank of the United States was a private, profit-making corporation

2. 4/5 of its stock was held by private investors, and 1/5 by the federal     government, which also appointed five of the bank’s 25 directors

3. Under Nicholas Biddle, its best-known president, the bank prospered and, by a 1830, maintained some 29 branches throughout the country

                        4.   Services: the bank

a) served as the official depository for government funds and sold government bonds

b) held private deposits of money and provided loans for business purposes

c) restrained estate banks from over issuing bank notes in relation to their specie

d) issued its own big notes which constituted a sound nationwide currency

            B. the Northeast favors the bank

1. Northeastern manufacturers and financial interests generally improve the bank because:

                                    a) paid dividends on the bank stock they own

                                    b) provided business loans

                                    c) held the posits of their surplus funds

                                    d) maintained a sound currency

            C. the West and South oppose the bank

1. State banks, small businessmen, and Western and Southern farmers, planters, generally opposed the bank

2. It prevented state banks from issuing large quantities of banknotes which would cheapen the value of money, inflate prices or farm crops, and facilitate the payment of debt