The Bank War as a “War”

Analyzing the Bank War as a proper “war” is justifiable on several grounds. For one, the antagonists of the 1830s themselves used these terms. ^{Footnote 4} Of course, they disagreed about when the war began, who initiated it, and why it occurred. ^{Footnote 5} But both sides explicitly cast the conflict in martial terms. As Jackson put it, “the bank … is trying to kill me, but I will kill it!” ^{Footnote 6}

Jackson was not being dramatic. He had fought—and slain—in duels with stakes lower than those raised by Biddle. ^{Footnote 7} “[E]ndless war and strife, personal or national, foreign or domestic, were the aliment of the late President's existence,” Henry Clay said of Jackson (Clay, 19 February 1838, p. 8). It is true that Jackson’s many battles had hardened him into “Old Hickory.” Yet, his bellicosity was not uncommon in a nation being forged in the crucible of war.

Violence was a mainstay of early American politics. The frontier remained a Hobbesian state of nature. The rule of law—including treaties—proved irrelevant as the land-hungry “American settlers” attempted to beat back Aboriginal and European claimants. Jackson himself had led troops against both. Even within the Union, there was the constant threat that the perennial territorial conflicts would escalate beyond mere skirmishes (Deudney Reference Deudney1995, p. 215). Successive rebellions, revolts, and riots gave bite to the secessionists’ threats. Indeed, the Bank War erupted alongside the Nullification Crisis, in which Jackson vowed, “the union will be preserved.… [N]o state has a right to nullify the laws of the union, or to secede from it.… [E]very attempt of the kind … leads direct to civil war” (Bassett 1832, p. 496).

For these reasons, some commentators have suggested that the antebellum American union teetered on the cusp between interstate anarchy and a single, hierarchically organized state. Deudney (1995, p. 207) argues that the early US “had a government but was not a state.” This was deliberate. Fearing “elective despotism,” the framers of the constitution divided power both between the state and federal governments and “among distinct and separate departments” within the government. The US was thus created as a balance-of-power order: “the powers of government [were] so divided and balanced … that no one could transcend their legal limits, without being effectually checked and restrained by the others.... Ambition must be made to counteract ambition,” Madison explained (Federalist 48 and 51).

By the 1830s, however, Biddle’s ambition destabilized the balance of power between the United States government and the Bank of the United States. Since its rebirth in 1816, the bank had developed into a robust central bank (Hammond Reference Hammond1957, pp. 300–325). Managing the government’s debt and regulating the country’s smaller banks granted the bank extensive influence over both the public and the private sectors. For some, this was a boon. For others, it was a bane. No one doubted, however, that the bank had grown well beyond the bounds of its framers’ intent (Schlesinger Reference Schlesinger1945, pp. 74–75). Just as “[t]erritory is … the main issue over which states fight wars,” so too was the Bank War a turf war (Fearon Reference Fearon1995, p. 408). The question became: just how much ground ought the bank cede to the government?

Regrettably, the US constitution provided no clear answer to that question.

Constitutional Anarchy

For all its genius, the US constitution was conspicuously silent on the place of central banking within the government. ^{Footnote 8} It thus failed to provide two of the three conditions that compel “political officials to honor constitutional rules” (Mittal and Weingast Reference Mittal and Weingast2013, p. 280). First, the constitution did not provide the focal points needed to help the community identify and counter constitutional transgressions. Those who favored the bank pointed to the interpretation championed by Alexander Hamilton, George Washington, and John Marshall. The bank’s detractors invoked an equally distinguished tradition of jurisprudence that ran back to Thomas Jefferson and James Madison. Thus, there was no higher authority to settle whether the bank had overstepped its province or whether Jackson had abused his prerogative.

The constitution also failed to “lower the stakes of [the] politics” attending the bank (Mittal and Weingast Reference Mittal and Weingast2013, p. 279). For Biddle, the stakes were virtually unlimited. The bank had been killed in 1812, and its current charter was due to expire in 1836. The “rationality of fear” led him to work beyond the bounds of his charter—and the rule of law (Mittal and Weingast Reference Mittal and Weingast2013, p. 283). At his direction, the bank spent a fortune buying political support within the media and the government. Biddle’s work to subvert democracy similarly raised the stakes for Jackson. To save his bank, Biddle challenged not only Jackson’s political survival but, more poignantly for Jackson, his honor.

Simply put, the constitution neither guaranteed that the bank would persist in some form nor specified the appropriate form it ought to take, should it persist. Thus, the constitution could not prevent Biddle and Jackson from resorting to “self-help”—from taking their security into their own hands (Waltz Reference Waltz1979, p. 105).

But to say that Jackson and Biddle would face each other in anarchy is not to say that war between them was inevitable. After all, even “classical realist” scholars acknowledged that military conflict is the exception, rather than the norm, in international relations (Hobbes Reference Hobbes and Tuck1996, pp. 88–89). Modern “neorealist” theory explains this: “war is always inefficient ex post—both sides would have been better off if they could have achieved the same final resolution without suffering the costs” of fighting (Fearon Reference Fearon1995, p. 383).

Clarifying the Puzzle, “Why War?”

Jackson knew better than anyone that wars were costly—and unpredictable. Fighting the Bank would require significant political and financial capital. He also stood to lose the pro-Bank contingent within his party. And the fight was sure to compromise the Bank’s essential functions, including facilitating government borrowing and stabilizing the financial system. Attacking the Bank was also highly risky. Jackson expected to win reelection in 1832, but he could not know the effect a war would have on his majority. Nor could he ignore the possibility of a stunning upset.

Biddle had no personal experience in battle; and he did not relish having “the General” serve him his first taste. The bank’s financial costs would be measured in the millions of dollars. That small fortune, however, was the least of it. Biddle knew that a fight would consume him personally. There was little he would not do to defend his bank. Knowing this, he was most reluctant to commit his legacy to the fortunes of war.

A Rationalist Explanation

Modern IR theory has identified two factors that can thwart the negotiation of peaceful settlements that both sides would prefer to war. First, actors have incentives to misrepresent their capabilities and resolve during negotiations. Second, expectations of changes in relative power reduce the credibility of an ascendant actor’s commitments. As James Fearon (1995, p. 405) puts it, a rising power cannot credibly “commit itself not to exploit the greater bargaining leverage” it would enjoy subsequently.

As Biddle and Jackson negotiated to avoid war, they were repeatedly bedevilled by their inability to create credible commitments. Both actors understood this dynamic. Each also believed that the other understood this as well. This exacerbated the challenges stemming from the existence of private information. Jackson and Biddle each, in turn, believed that the other sought to delay the conflict into a period when the balance of power had shifted into the other’s favor.

The waltz down the path to war began in the autumn of 1831. At that point, Jackson began to worry that the bank issue could prove costly at the election of 1832. That winter, he approached Biddle with a compromise that he hoped would lay the issue to rest. Biddle received the proposal happily. The bank’s ascent had created “an incentive to transfer away or otherwise limit the sources of its new strength, since by doing so it [might] avoid being attacked.” (Fearon Reference Fearon1995, pp. 406–407) A double-cross by one of Biddle’s agents, however, caused Jackson to revise his assessment. Believing that Biddle’s position at the bank would weaken over time, Jackson rescinded his proposal. This raised the risks for Biddle of pushing for an early recharter. But he realized that his bargaining position would never be stronger than in the run-up to Jackson’s election. Moreover, he believed that Jackson understood this and that this explained Jackson’s dilatory tactics. So, he applied in any case. Following Biddle’s fait accompli, Jackson agreed to a compromise—still expecting that he could demand further revisions after re-election. Over the next several months, Biddle ensured that the bank recharter bill contained nearly every one of Jackson’s ten proposed reforms. ^{Footnote 9} Jackson was dissatisfied with the bill, but he hesitated to respond with a declaration of war. Instead, he considered issuing a narrow veto that insisted upon additional reforms, essentially deferring the conflict until after the election. At that point, however, Jackson’s attorney general convinced him that no charter revisions could curb the bank’s hegemonic ascent. Jackson then realized that Biddle had misrepresented the true source and extent of the bank’s power. Biddle had agreed to these (essentially) ineffectual charter reforms so as to delay the conflict while the bank’s relative power steadily increased. Fearing that the bank would soon become more powerful than the government, Jackson launched a preventive war by attacking the bank with a broad, politically irreversible veto.

Just as rationalist theories predicted, Jackson’s preventive war became a “total war.” ^{Footnote 10} After the veto, Biddle mobilized all of his resources in an effort to (politically) destroy Jackson. Jackson responded with a campaign to annihilate the bank. Locked into a fight for survival, neither could rest until his enemy had been vanquished.

Drawing the Lines of Battle

Jackson’s first annual message to Congress (December 1829) ushered in a cold war between his presidency and the Bank of the United States. The bank’s charter would not expire until 1836. Yet, bank supporters began calling for a recharter in Jackson’s first year as president. Resolving to face the challenge head-on, Jackson invited Nicholas Biddle, the bank’s president, to a private conference in the autumn of 1829. ^{Footnote 11} While he was grateful for “the services rendered by the Bank at the last payment of the national debt,” Jackson nonetheless had serious constitutional objections: “I do not think that the power of Congress extends to charter a Bank out of the ten mile square” of Washington, DC (McGrane Reference McGrane1919, pp. 93–94).

Flummoxed by Jackson’s objection, Biddle fixated upon Jackson’s homage. “I am very much gratified at this frank explanation. We shall all be proud of any kind mention” Jackson might make in his message to Congress. Without intending irony, he conjured the militancy that subsequently colored the struggle: “we should feel like soldiers after an action commended by their General” (McGrane Reference McGrane1919, pp. 93–94).

In his message, Jackson praised the bank’s “judicious arrangements” in facilitating the government’s debt servicing (Jackson 1829, p. 8). But he questioned “[b]oth the constitutionality and the expediency of … this bank.” More pointedly, he insisted that “it has failed in … establishing an uniform and sound currency” (Jackson 1829, p. 17). Instead, he proffered an alternative “founded upon the credit of the Government and its revenues … which would avoid all constitutional difficulties and … secure all the advantages … from the present bank” (Jackson 1829, p. 17).

Biddle was not fazed. “I do not think [Jackson’s] attack … will do any harm, & I think it will rather benefit [the bank],” he declared. This, he explained, was “an opinion of the President alone”—“the honest tho' erroneous notions of one who intends well.” Also, “if the people know that this is not an opinion which they must necessarily adopt as a portion of their party creed … then the question will be decided on its own merits.” And Jackson’s position had no merit. “[T]he currency issued by the Bank [is] more sound & uniform than that of any country in the world,” Biddle boasted. “Second, the substitute proposed for it is one which no man who values the liberties of the country could agree to establish” (McGrane Reference McGrane1919, pp. 91–97).

Biddle's Public Campaign

Over the next year, bank supporters lobbied Biddle to make an early recharter application. They painted a rosy picture of the setting in Washington. The real enemy, they insisted, was not Jackson, but Martin Van Buren (McGrane Reference McGrane1919, pp. 102, 104). They recounted Jackson's speaking of Biddle “in the most exalted terms.… [T]here is No Gentleman that … would manage the Bank better or do the Bank & Country More Justice” (McGrane Reference McGrane1919, p. 107). Still, Jackson’s zeal to reform the bank’s charter did not flag. “[A]ltho’ the President is decidedly in favor of a Bank such as he recommended to Congress,” Biddle was assured, “yet if a bill were to pass both houses, renewing the charter of the Bank U States with certain modifications, the President would not with hold his approval” (McGrane Reference McGrane1919, pp. 103–104, 107, 117).

Biddle continued to construe Jackson as “wrong” but “perfectly honest” (McGrane Reference McGrane1919, p. 108). He even twisted logic to explain the rumors that Jackson was considering a veto. Because “the Bank [is] decidedly popular with the great mass of the Community, ... the opposition to the President will naturally endeavor … to represent him & his friends as unfriendly to sound currency” (McGrane Reference McGrane1919, p. 108). Jackson’s dominant strategy was thus obvious: “it would be an act both of justice & policy to himself & his friends by correcting an opinion that … he & they are unfriendly to the Institution.”

As Biddle knew, however, the lessons of the past suggested otherwise. “[T]he opposition to the [First] Bank,” he recounted, “was the result of downright ignorance.” Biddle thus launched a public relations blitz to harness “the irresistible power, of truth.” He paid handsomely for advertising space in newspapers. ^{Footnote 12} The papers, he rationalized, were being employed “not for their influence, but merely as channels of communication with the people” (McGrane Reference McGrane1919, p. 123). Nevertheless, Biddle sought to keep their dealings secret (McGrane Reference McGrane1919, p. 124). This predilection left Biddle beholden to clandestine agents, including one Silas Enoch Burrows.

The Origins of the Burrows Affair

Burrows was an ambitious New York merchant from a prominent Connecticut family (Burrows Reference Burrows1975). His introduction to Jackson exalted him: “Mr Burrows is considered, universally in [New York City], as one of the most upright, honorable and gentlemanly men in the community” (Swartwout to Jackson, 15 August 1829, AJMLOC).

The only sustained scholarly treatment of Burrows lunges in the opposite direction. ^{Footnote 13} For Thomas Govan (1959, pp 147, 155, 158), Burrows was “a strange and erratic merchant” who “created and fostered” the “erroneous belief” that led a “confused” Biddle down the garden path into a web of conspiracy.

More likely, Burrows combined elements of both extremes. He gambled that lavish (unsolicited) gifts would help him amass influence. ^{Footnote 14} He espoused nobless oblige and yet lobbied explicitly on behalf of his pecuniary interests. ^{Footnote 15} He spoke regularly of his “sacred honor” but repeatedly promised to perjure himself. ^{Footnote 16}

Biddle met Burrows in December 1830. When Burrows mentioned personal connections to Monroe and Jackson, Biddle was happy to gain this seemingly well-placed ally—particularly in New York City, where the bank faced many rivals. ^{Footnote 17} Initially, Biddle saw Burrows as a means to secure and disseminate endorsements from influential Democrats. ^{Footnote 18} Over the following months, however, their collaboration evolved along a more problematic trajectory.

In February, Biddle asked “what shall be done to prevent” continuing criticism in New York’s major Democrat newspaper, the Courier and Enquirer (Biddle to Burrows, 7 February 1831, NBMLOC). Burrows proposed that they simply buy out the paper: Biddle would furnish the cash, and Burrows would arrange the deal (Burrows to Biddle, 7 March 1831, NBMLOC). Previously, Biddle had bought information from the paper’s political editor (Govan Reference Govan1959, p. 154). Eager to increase his foothold in one of the largest and most respected newspapers in the country, Biddle jumped at the opportunity (Bennett Diary, 18 July 1831, p. 19).

Burrows hesitated to record their conniving—“It can easily be effected but must only be talked of”—so the surviving documents support multiple versions of events (Burrows to Biddle, 7 March 1831, NBMLOC). This much is clear. On March 26, 1831, Biddle handed Burrows $15,000 “out of [his] own funds” (House Report 460, p. 86). Claiming that he had received the cash from his father, Burrows passed the money to Mordecai Noah, a venal editor at the paper, who then bought half of the newspaper (House Report 460, p. 95). Noah’s ascent precipitated a reshuffling of the editorial staff and an altogether new stance on the bank: “although the present charter [is] objectionable … a similar institution, or the present charter, modified … [is] absolutely necessary.” Soon thereafter, the bank granted the paper loans totaling $35,000. ^{Footnote 19}

Considered on their own, the additional loans probably would not have aroused suspicion. ^{Footnote 20} But they came on the heels of the paper’s political shift. And the original loan to Burrows was most irregular.

Indeed, the original $15,000 looked less like a “loan” than a bribe. For nearly a year, Biddle neither recorded the loan nor called for repayment. Noah later claimed to have “paid in different instalments [sic]” throughout 1831 (House Report 460, p. 77). If Burrows received Noah’s payments, however, he did not pass them on to Biddle. The loan was not actually retired until March 1832—and only then after Biddle granted Burrows new loans “amounting to upwards of $40,000” (House Report 460, p. 86). ^{Footnote 21}

Throughout the spring of 1831, Burrows characterized himself as Biddle’s “confidential agent,” approaching newspapers and offering to exchange bank loans for favorable coverage. When unswayed editors printed accounts of Burrows’s propositions, Biddle pressed him to attest that he had “never received any authority … from anyone connected with the Bank to influence … the course of any newspaper” (Biddle to Burrows, 14 April 1831, NBMLOC). In response, Burrows proposed the bank finance him on a $200,000 expedition to India (Burrows to Biddle, 3 May 1831). Naturally, Biddle refused the unprecedented request (Biddle to Burrows, 4 May 1831). But another $1,000 from Biddle kept Burrows tractable into the autumn of 1831. ^{Footnote 22}

Biddle Gains the Administration

Jackson took umbrage at Biddle’s efforts to garner support. Writing to a potential cabinet member, he lamented that “[m]any who you would not have supposed has secretly enlisted in [the bank’s] ranks.” He remained steadfast: “The corrupting influence of the Bank upon the morals of the people and upon Congress [is] to be … fearlessly me[t]” (Bassett 1959, p. 272). Yet, while Jackson was determined to contain the bank, he still believed it was possible to avoid a hot war with it.

In the spring of 1831, Jackson’s schism with Vice-President John C. Calhoun prompted him to replace most of his cabinet. But rather than appointing anti-bank Democrats, Jackson did the opposite. Only Roger B. Taney, the new attorney general, had spoken against the bank’s recharter (Taney Reference Taney and Brent Swisher1958, p. 123). Before agreeing to serve as secretary of the Treasury, Louis McLane secured Jackson’s leave to continue supporting the bank in his official capacity. Contemporaries read McLane’s appointment as a capitulation by Jackson; and it “increased and encouraged the hopes of a recharter” (Taney Reference Taney and Brent Swisher1958, pp. 123–129). ^{Footnote 23} Jackson, however, was far from ready to surrender his judgment. When McLane proposed hastening the recharter, Jackson demurred (McGrane Reference McGrane1919, p. 130).

In October, Jackson dispatched McLane to Philadelphia to make this clear to Biddle. The administration spoke from a position of strength: “The Pre[sident] is now perfectly confident of his election—the only question is the greater or the less majority” (McGrane Reference McGrane1919, p. 131). Pursuant to that, Jackson expected the bank to fall into line. In particular, the bank would postpone its recharter application until after the election. If “this question is put to [Jackson] as one affecting his reelection,” McLane warned, “he might … be disposed to put his veto on it, if he be as it were dared to do it” (McGrane Reference McGrane1919, p. 131). Jackson “would be more disposed to yield when he is strong than when he is in danger” (McGrane Reference McGrane1919, p. 131).

Biddle pressed for Jackson to announce this position publicly and thus tie his own hands. As McLane explained, however, it had been a struggle just to persuade Jackson to suspend his overt hostility. For now, Biddle agreed to an explicit demurral: “The President is to say that having previously brought the subject to Congress, he now leaves it with them” (McGrane Reference McGrane1919, pp. 128–135).

In the event, the issue came to lay in the hands of Silas Burrows.

Biddle Loses Burrows

The summer of 1831 brought the ruin of Silas Burrows.

The previous June, one of Burrows’s expeditions had recovered the wrecked Russian ship Kensington. When the rescued envoy committed his government to pay $10,000 in compensation, Burrows magnanimously declined the offer (Burrows Reference Burrows1848?, p. 47). This liberality earned Burrows a commendation from Secretary of State Van Buren (Burrows Reference Burrows1848?, pp. 50–51).

It did not end there, however. In June 1831, Burrows was prevailed upon to fund the Kensington’s return to Russia. Burrows offered $10,000. When this was “refused,” he stretched further—against the advice of his friends and creditors. He committed £12,000 (about $60,000) ^{Footnote 24} to the cause, hazarding his very “existence as a merchant” on this single venture (Burrows Reference Burrows1848?, pp. 55–66, 83–86).

He bet wrong. As the Kensington sailed to St. Petersburg, St. Petersburg repudiated its debt to Burrows (Burrows Reference Burrows1848?, pp. 88–90). In September, Burrows’s drafts came due. He wrote directly to the czar, begging for indemnification (Burrows Reference Burrows1848?, pp. 91–94). When this failed, Burrows turned to the bank.

As an insider, Burrows speculated in bank stock. ^{Footnote 25} Hoping to increase his advantage, he schemed to replace several directors of the bank’s New York branch (Burrows to Biddle, 14 and 19 November 1831, NBMLOC). When Biddle rebuffed him, Burrows demanded $1,100 cash—allegedly “money that [he] [had] expenced [sic] for the Bank by [Biddle’s] direction” (Burrows to Biddle, 25 and 28 November 1831, NBMLOC).

When Biddle did not respond, Burrows sunk to outright blackmail. He threatened that it was “in [his] power” “to effect retaliation“ and ”accept of a fortune by revealing” their secrets. “You shall respect me in future,“ he exclaimed. ^{Footnote 26} ”I have friends ... who will counteract your efforts.” He closed with an oblique reference to a “visit to Washington” sure to “disturb [Biddle's] peace” (Burrows to Biddle, 2 December 1831, NBMLOC).

Biddle, however, did not yet accept that the fate of his bank had become intertwined with the fortunes of Burrows. Calling Burrows’s bluff, he offered no immediate response—perhaps because he believed that he was closer than ever to an agreement with Jackson.

Jackson's Proposed Compromise

Jackson’s third annual message to Congress came a few days after Burrows’s blackmail. Unlike Jackson’s two previous floggings, this message scarcely mentioned the bank. Rather, just as McLane had promised, Jackson announced that he would leave the question “to the investigation of an enlightened people and their representatives” (House Journal, 6 December 1831, p. 21). McLane followed this with a fulsome defense of the bank’s constitutionality, expedience, and management (US Treasury 1831).

Jackson simultaneously reached out to Biddle through back channels. His private secretary sent a letter to an unknown Philadelphian. This person then showed the letter to Edward Shippen, a Philadelphia magnate, who passed the message to Biddle. ^{Footnote 27} “The letter,” Shippen explained, “urges the necessity of proper modifications” to the bank’s charter, but these “cannot be suggested by the President.” Instead, the reforms needed to be “proposed by the Corporation” itself (Shippen to Biddle, 6 December 1831, NBMLOC).

There were seven specific reforms “which it is thought will insure the Executive sanction.” One required selling the government’s stock in the bank, which would both privatize the bank and diffuse its ownership. Several more sought to limit the bank’s expansion in various ways. The remainder were designed to increase government oversight of the bank. ^{Footnote 28}

In short, Jackson sought to eliminate the “partnership” between the bank and the government. The changes, however, “[were] not calculated to impair the usefulness or efficiency of the Institution.” Shippen assured Biddle, “The Pres[ident] does not consider himself pledged against a renewal, and … if Congress passes a Bill with proper modifications of the Charter his approval will not be withheld” (Shippen to Biddle, 6 December 1831, NBMLOC). Indeed, Jackson was “desirous to have the Bank question settled by a renewal before the next Presidential canvass, with any modifications to free the Pres[ident] from the charge of an entire abandonment of his original opposition” (Shippen to Biddle, 6 December 1831, NBMLOC).

Burrows and Jackson's Volte-Face

As Biddle mulled the Shippen proposal, an increasingly desperate Burrows approached Jackson with proposals of his own. Naturally, he sought Jackson’s support in the Kensington controversy (Burrows to Jackson, 7 December 1831, AJMLOC). But, as their papers show, Burrows also contrived a cabal to wrest control of the bank from Biddle.

Following his visit, Burrows sent a long letter that coded the scheme in a metaphor of matchmaking. He longed to be paired with “the young lady,” by which he almost certainly meant “the Bank.” ^{Footnote 29} “With her,” Burrows explained, “I want not wealth.” Unlike Biddle, he would eschew “riches and power” and, instead, keep the bank “dependent” on Jackson—its “guardian” (Burrows to Jackson, 7b December 1831, AJMLOC).

Initially, Jackson drafted a detailed reply. “[Y]ou have left behind you a young lady under my protection.... I am exercising that protection for the benefit of the young lady,” Jackson explained. He “was ready to resign it to the object of her choice … whenever [that object] is designated to [Jackson].” But he took “a deep interest in [the bank’s] welfare,” and he remained “anxious” about “the character and standing of the object of choice.” He assured Burrows that “from the knowledge I possess of your character and standing in life, should the young lady … reciprocate the attachment … I will cheerfully resign her to your hands” (Jackson to Burrows, 8 December 1831, AJMLOC).

Jackson, however, ultimately sent a circumspect letter that made no mention of “the young lady.” ^{Footnote 30} Praising Burrow’s “noble conduct” in the Russian business, he nonetheless chastised Burrows’s naked ambition: “you possess your full share of the honors and comforts of this life” (Steers Reference Steers1971, pp. 31–32). Insult was added to injury a few weeks later when Burrows lost a ship and Jackson offered no reply to the former’s petition for intercession (Burrows to Jackson, 26 December 1831, AJMLOC). Burrows was mortified—sufficiently so that he subsequently doctored the record of these interactions. ^{Footnote 31}

Yet, Jackson found Burrows’s mooted mutiny intriguing rather than revolting. Burrows had raised the possibility of a regime change at the bank, and Jackson resolved to play for time. The day after Burrows departed, McLane sent Biddle word “that a renewal of the Charter ought not to be pressed during the present session.” ^{Footnote 32} He warned that if the bank applied now, it would be “entirely impossible to persuade the [president] that we are acting under any other than a hostile feeling to him.” If the bill passed, Jackson “[would] apply his veto, even if certain that he [would] thereby lose the Election.” And “once [the veto were] given, the President [would] never swerve.” ^{Footnote 33}

McLane suggested that time was on Biddle’s side: “Every day new Converts are making. Every day the utility of the Bank is becoming better known.” He was “confident of ultimate success if time be given for the [President] to convince himself of the Error into which opinion long formed … had committed him” (Smith to Biddle, 7 December 1831, NBMLOC). McLane was unequivocal: “if you apply now, you assuredly will fail—if you wait, you will as certainly succeed” (Cadwalader to Biddle, 21 December 1831, NBMLOC).

Biddle's Recharter Application

Yet, on January 9, Biddle’s recharter application was formally submitted to Congress (House Journal, 9 January 1832). How can we explain Biddle’s decision to make this fait accompli?

Traditionally, the Jacksonians construed Biddle’s application as an attempt “to prevent the reelection of Gen[eral] Jackson” (Taney Reference Taney and Brent Swisher1958, p. 109). The evolved consensus has been that Biddle hoped a veto would shift the attitude and composition of Congress enough to furnish a supermajority. ^{Footnote 34} Ralph Catterall (1903, p. 222) condemned Biddle for acting on this “preposterous” notion. Robert Remini (1967, pp. 75–76) similarly concludes that only “lunacy” can explain Biddle’s “incredible blunder.”

Viewing Biddle through the lens of IR theory reveals a far more realistic strategy. Believing that Jackson’s re-election was “as certain as his life,” it became a question of whether Jackson would be more likely to renew the charter before or after the election (Mercer to Biddle, 12 December 1831, NBMLOC). To answer this question, Biddle analyzed the relative power trajectories of Jackson and the bank. Before the election, Jackson was vulnerable. Fearful of splitting his party—and undertaking another messy cabinet reshuffle—Jackson would close ranks with McLane and tread lightly on the bank issue. ^{Footnote 35} At the same time, the potency of the bank's newspaper arsenal turned on Jackson’s need to court public opinion. Before the election, Biddle reasoned, there was “some check in public opinion—some in the counsels of those around [Jackson].” Following Jackson’s re-election, “he will have neither.” As a result, Jackson could not credibly commit (now) that he would renew the bank after re-election. Biddle asked, “[W]hat security is there that when his election is over, he will not negative the bill? I see none.” He concluded, “[Jackson] would be ten times more disposed to negative it then than now” (Biddle to Smith, 4 January 1832, NBMLOC).

Biddle thus decided to press the issue immediately, while the bank’s relative strength was greatest. Even then, however, Jackson was still more powerful than the bank. Recognizing this, Biddle sought to avoid a war. Instead, he readied his arms and pursued a negotiated settlement. ^{Footnote 36}

As he applied to Congress, Biddle expanded the bank’s public relations blitz. He encouraged influential businessmen around the country to draft memorials in support of the bank (Biddle to numerous correspondents, 16 January 1832, NBMLOC). The bank then spent thousands of dollars reprinting articles and editorials that Biddle hoped would “disenchant the country of [the administration’s] foolery.” Biddle also extended sizeable loans to newspapers on both sides of the debate (Biddle to Ingersoll, 11 February 1832, NBMLOC; Govan Reference Govan1959, p. 188). All told, the bank’s loans increased by 66%—$28 million—during this period. ^{Footnote 37}

At the same time, Biddle brought Burrows into line. He later claimed to have recorded the original Burrows loan on January 2 (House Report 460, p. 9). While there is no way of knowing when that entry was made, ^{Footnote 38} Burrows’s friendly demeanor returned shortly thereafter (Burrows to Biddle, 7, 11, and 25 January 1832, NBMLOC).

Burrows was then dispatched to Washington, where he “dined, supped, and remained as one of [Jackson’s] family.” This time, he pledged fealty to Biddle: “My services are yours and never shall any inquiry result to the institution from me” (Burrows to Biddle, 5 February 1832, NBMLOC).

In early February, Representative George McDuffie brought the bank recharter bill onto the House floor. Having worked closely with the bank, McDuffie’s proposed charter included a number of reforms. ^{Footnote 39} Four followed from—but did not precisely match—Jackson’s proposals of the previous December. Whereas Jackson had capped the number of bank branches, the bill prohibited new branches without congressional consent. Instead of restricting the bank’s right to hold real estate, states could tax both those holdings and the bank stock held by state residents. The third, which Biddle had also championed, designated officers to sign the banknotes. Fourth, the bank would continue to pay the government bounties for its charter. Beyond Jackson’s demands, it additionally limited the production of banknotes and expanded Jackson’s power to appoint directors at the bank’s branches (House Resolution 365, 10 February 1832; Shippen to Biddle, 6 December 1831, NBMLOC; Govan Reference Govan1959, p. 109–110).

From a “Coup,” a Compromise

With the groundwork laid, Biddle opened negotiations with Jackson. He made Horace Binney, the bank’s legal advisor, his agent in Washington. He also recruited Charles Jared Ingersoll, a Democrat congressman from Philadelphia, to mediate between the bank and the administration. When Ingersoll suggested that presumptive Vice-President Martin Van Buren was steering Jackson toward a collision with the bank, Biddle hatched a plan to “exclude” Van Buren from the government. He instructed Binney to approach Senator George Dallas, a pro-bank Democrat from Pennsylvania. Biddle proposed Dallas employ the bank’s familiar logic: “let us agree on the [charter] modifications; the Bank will consent to them, and … the re-chartering of the Bank will thus become a measure of yours.” This would deliver Pennsylvania to Jackson, it would grant Dallas “distinguished consideration through the nation,” and it would save Biddle’s bank. ^{Footnote 40} “It is a real coup d'etat,” Biddle sneered (Biddle to Ingersoll, 6 February 1832, NBMLOC).

While he awaited Ingersoll’s report, Biddle crafted the strongest possible rendering of his position. In a draft letter, he boasted: “there is no man, no woman, & no child in the U.S. who does not understand that the worthy President was in a great error” in questioning the bank. He warned, “If the bill passes & the President negatives it, I will not say that it will destroy him—but I certainly think it will … [and] it ought to.” ^{Footnote 41}

In Washington, Ingersoll eagerly “pav[ed] the way for just such a coup d’etat.... Let [Jackson’s] friends frame it as they will,” Ingersoll explained to Secretary of State Edward Livingston, “provided their alterations are not destructive of the Institution.” Livingston “acknowledged the force of the argument” and endorsed “the proposed mode of proceeding.” He confirmed that Jackson would not “oppose the Bank on the ground of its unconstitutionality.” But he could recollect only three specific reforms: the bank could not hold real estate; states could tax the bank; and the bank would issue more stock. He asked “for a few days … to have a full understanding with the President” (Ingersoll to Biddle, 9 February 1832, NBMLOC).

After receiving Ingersoll’s encouraging report, Biddle redrafted his letter in a more conciliatory tone. He assured the administration, “so far from wishing to embarrass [Jackson’s] administration … I will go nine tenths of the way to meet him in conciliation.” Biddle then moved in to clinch the deal: “let him take the charter and make any changes he likes … I am sure that we would agree to his modifications.… It will then be his work.... [I]f done soon,” Biddle declared, “it will be done triumphantly” (Biddle to Ingersoll, 13 February 1832, NBMLOC).

A few days later, Ingersoll reported Jackson’s revised list of reforms. Two were already contained within McDuffie’s bill: recognizing the state’s right to tax the bank; and granting Jackson power to appoint branch directors. The other two—limiting the bank’s real estate holdings; and formally separating the bank and the government—dated back to Jackson’s proposal of the previous December. The former soon found its way into the Senate version (S. 147, 13 March 1832) of the bill. ^{Footnote 42} Biddle demurred on the latter, however, probably because other Jacksonians had been pushing in the opposite direction. ^{Footnote 43} Livingston was also “very tenacious” in pressing the bank to sell more stock, but, Ingersoll clarified, “This … is not the President’s requirement” (Ingersoll to Biddle, 23 February 1832, NBMLOC).

Biddle was delighted. He even volunteered further potential concessions. Indeed, “there is no change desired by the President which would not be immediately assented to by the Bank.” He regretted finding “the President & the Bank apparently estranged while there is really no difference between them” (McGrane Reference McGrane1919, p. 186–187).

On March 1, Ingersoll informed Biddle that Jackson “wishes to end the business this Session. If such a bill goes to him as he can sign he will sign it without hesitation. If not, he will be equally prompt to reject it” (Ingersoll to Biddle, 1 March 1832, NBMLOC). Thus, the agreement was set. Biddle just needed to see an acceptable recharter bill delivered to Jackson. ^{Footnote 44}

To do that, however, Biddle would have to overcome the accusations mounting in Congress.

Congress Investigates Biddle

As Biddle and Jackson hammered out their compromise, the anti-bank members of Congress demanded an investigation into the bank’s activities (House Journal, 23 February 1832). Ingersoll assured Biddle that Jackson had not sought the investigation ^{Footnote 45} (McGrane Reference McGrane1919, p. 187). But neither could risk attempting to thwart it. By mid-March, the recharter bill was on hold and a congressional investigation was underway (Dallas to Biddle, 15 March 1832, NBMLOC).

Knowing where this investigation would inevitably lead, Biddle redoubled his investment in Burrows (Biddle to Burrows, 4, 10, and 11 March, NBMLOC). On March 2, Burrows received a new loan of $32,446. This enabled him to officially retire the original $15,000 loan. Two weeks later, he was loaned another $14,150, leaving him with nearly $31,600 in cash. ^{Footnote 46} These official loans do not include any (unrecorded) additional cash. ^{Footnote 47} By the end of April, Burrows was somehow able to cover his debts from the Kensington debacle. ^{Footnote 48} At the same time, Burrows sent Biddle a stream of letters promising fealty and claiming all responsibility for the problematic loans (Burrows to Biddle, 19 March and 7, 12, 25, and 26 April 1832).

Biddle also “advanced” $125,000 to individual members of Congress. ^{Footnote 49} By April 1832, virtually every congressman was indebted to the bank (House Report 460, pp. 568–571). ^{Footnote 50} Biddle, however, believed that diffusing the bank’s largesse demonstrated “the absence of all disposition to favoritism” (House Report 460, p. 92). His defense was facile, “the greatest amount of loans … is to the friends of the present administration, and … to the decided opponents of the bank.”

Biddle did not overtly resist the inquest (Biddle, ‘Draft Memorial' [March 1832], BMLOC). Behind the scenes, however, he did much to frustrate the committee. He reportedly paid one member of the committee an exorbitant fee—$1,000—for a few hours of consulting work (Burrows to Biddle, 26 March 1832, NBMLOC). Biddle plied associates (in vain) for ways to discredit another critic—perhaps even the committee chair (Cadwalader to Biddle, 10 April 1832, NBMLOC). Finally, Biddle tacitly condoned Burrows’s efforts to dodge the committee’s subpoenas. ^{Footnote 51} Instead, Burrows visited Jackson again, this time relating “the particulars of the loan … entered into on [Jackson’s] account and for the benefit of the party.… [W]ith which [Jackson] appeared pleased” (Burrows to Biddle, 26 March 1832, NBMLOC).

The congressional Democrats, however, were not pleased. Their inquest laid bare Biddle’s blatant attempts to influence congressional politics. ^{Footnote 52} At the end of April, the committee concluded that “the bank ought not … be rechartered” (House Report 460, p. 29).

Biddle Pushes a Reformed Charter through Congress

Biddle, however, was not chagrined. Moreover, Jackson's decision to turn a blind eye to the bank’s corruption further encouraged Biddle. In May, he traveled to Washington to personally steer the bank’s application through Congress. His first meeting—with secretaries Livingston and McLane—gave him pause. Biddle hoped that his broader support in Congress would “disarm some of the hostility hitherto entertained toward [the bank], and [furnish] a new motive for pressing a decision.” The two secretaries, however, received Biddle coolly. When Biddle broached the issue, “all that [he] could learn from Mr. Livingston was that the awkwardness was irretrievable—and that it only remained to make the bill as unexceptionable as possible.” Biddle resolved to do just that (McGrane Reference McGrane1919, p. 191).

He helped his congressional allies craft their arguments. He then paid to have their speeches published and distributed (Smith to Biddle, 22 June 1832, NBMLOC; Fry to Biddle, 27 June 1832, NBMLOC; Gales and Seaton to Biddle, 28 June 1832, NBMLOC). He attempted to meet with his strongest critics, albeit with mixed success. ^{Footnote 53} Burrows again visited Jackson and, at Biddle’s request, sent a document (presumably indemnifying Biddle) to McDuffie. ^{Footnote 54} At the same time, Biddle sent directives back to Philadelphia. He pushed to issue a dividend to stockholders, and used his influence to stave off credit contractions in markets throughout the US. ^{Footnote 55}

Upon Biddle’s arrival in Washington, Dallas brought the bank bill to the Senate floor. He stressed the significant reforms that would be made to the bank’s charter. Leaning heavily on Biddle’s analysis, Dallas explained why each was either “unnecessary or injurious.” ^{Footnote 56} Yet, in “a spirit of compromise and concession,” the pro-bank faction would accept these changes (Senate Register, 23 May 1832)

The bank’s critics proposed numerous additional amendments. Several simply sought to clarify or extend the limits already included in the revised charter. Others went beyond the reforms Jackson had championed. For instance, bank sceptics proposed a 5% cap on the bank’s rate of interest. They tried to prohibit foreigners from owning stock. And they attempted to shorten the term of the bank’s charter—or at least authorize Congress to charter additional banks. Biddle’s influence, however, proved overwhelming. On July 3, the bill was passed with just those amendments he had sanctioned. ^{Footnote 57}

All told, Jackson had asked Biddle for ten provisions in the new bank charter. ^{Footnote 58} The bill that passed to Jackson fully satisfied seven of these demands. ^{Footnote 59} It met Jackson more than halfway on the production and circulation of banknotes. And it complied with Jackson’s December—rather than his February—specification of the government’s role in choosing bank directors. Ultimately, it ignored just one demand: rather than eliminating the financial “partnership” between the government and the bank, Biddle offered the government $3 million. ^{Footnote 60} This, though, would have partially substituted for the revenue to be gained from selling the government’s bank stock. ^{Footnote 61}

Jackson Vetoes the Bank

Jackson watched the congressional debate with unusual keenness. ^{Footnote 67} When the bill passed from the Senate to the House on June 11, it was clear that almost all of his concerns would be addressed in the new charter. Nevertheless, rumors spread that Jackson intended to veto the bill (Smith to Jackson, 17 June 1832, AJMLOC). A few days later, a bank supporter sounded out Jackson over dinner. There were “various difficulties and objections,” he assured Biddle, “but none insuperable” (Patterson to Biddle, 21 June 1832, NBMLOC).

It thus became a question of the terms attached to Jackson’s veto. Would he state objections and insist upon further reform? Or would he come out irrevocably against the bank? Nearly Jackson’s entire cabinet pressed him to pursue the former (Taney Reference Taney and Brent Swisher1958, p. 226).

Jackson struggled mightily with this question. While he crafted his response, he stumbled toward a broad veto. ^{Footnote 68} In one draft veto message, he toyed with making the bank “purely national, without stock holders” (Bassett Reference Basset1929, p. 458). In another memorandum, Jackson drew upon the doctrine of the balance, and separation, of powers. On the one hand, the bank must reside under the hierarchy of the executive branch—“an appendage of the Treasury” (Bassett Reference Basset1929, p. 389). Or, returning to his one unmet demand, it must be entirely separated from it. The government could not “form a corporation and become a member of it. The framers were too well aware of the corrupting influence of a great monied monopoly upon government to legalise such a corrupting monster” (Bassett Reference Basset1929, p. 389).

At the end of June, Attorney General Roger B. Taney intervened. ^{Footnote 69} Calling for a “direct and decisive veto,” he sent Jackson a fifty-four-page memorandum that fleshed out the president’s intuitions (Taney Reference Taney and Brent Swisher1958, p. 224). The analysis turned on the distribution of power. ^{Footnote 70} The bank—and not the government—had monetary sovereignty: “The immense amount of its capital … gives it absolute dominion over the circulating medium of the country” (Taney to Jackson, 27 June 1832, AJMLOC, p. 40). From this, the bank derived political power. Both “its great patronage” and its “unlimited command of money … may enable it to exercise … influence over the servants of the public” (Taney to Jackson, 27 June 1832, AJMLOC, p. 41).

The bank was already beginning to flex its considerable muscle. Taney had “perfect conviction that the funds of the Bank have been freely used for the purpose of obtaining political influence and power” (Taney to Jackson, 27 June 1832, AJMLOC, p. 51). This was all done with an eye to the upcoming election. This “great monied institution” was using its “vast political power” “to overawe the President in the discharge of his high constitutional duties.” If he resisted, the bank directors would seek to “secure a President of the U. States who is favorable to their views” (Taney to Jackson, 27 June 1832, AJMLOC, p. 43).

This, however, was not even the most troubling aspect of the bank. Beyond all this, Taney stressed the bank’s “dangerous” “tendency”—its hegemonic ascent (Taney to Jackson, 27 June 1832, AJMLOC, pp. 41, 46). “In another fifteen years,” Taney projected, “the President of the Bank … would have more influence … than the President of the U[nited] States” (Taney to Jackson, 27 June 1832, AJMLOC, p. 46). The bank would become “such a power that the Government could not hereafter … change its policy” (Taney to Jackson, 27 June 1832, AJMLOC, p. 46).

Reform was not an option. Given that the bank had already “misbehaved itself,” it could not be trusted to abide by a new charter any better than it had abided by its current charter (Taney to Jackson, 27 June 1832, AJMLOC, p. 46). Moreover, Biddle could not credibly commit not to use the power he had obtained (Taney to Jackson, 27 June 1832, AJMLOC, p. 43).

Instead, Jackson should use the ensuing election as an opportunity to destroy the bank once and for all. Taney argued that “a veto with the election following … would necessarily bring to the serious attention of the people … the misconduct of the institution and its dangerous tendencies.... The whole subject would necessarily be thoroughly sifted in the canvass and the public opinion then favorable to the Bank might be changed” (Swisher 1958b, p. 218). “[A] veto which … evaded the direct issue,” on the other hand, “would justly result in [Jackson’s] overthrow” (Swisher 1958b, p. 225).

Jackson was persuaded. He invited Taney to help him draft the veto statement (Swisher 1958b, pp. 226–227). On July 10, Jackson issued an unconditional veto that, in effect, declared war on Biddle.

Beyond its populist and nativist “propaganda,” Jackson’s veto message offered a compelling balance-of-power rationale for his decision (Remini Reference Remini1981, p. 369). Jackson found “the powers conferred upon its agent [the bank] not only unnecessary, but dangerous to the Government and country.” So far from reducing the financial ties between the bank and the government, the new charter doubled the bounty paid by the bank. He warned of the “great evils” that “might flow from such a concentration of power in the hands of a few men irresponsible to the people.” These dangers were already being realized: “Suspicions are entertained and charges are made of gross abuse and violation of its charter.”

The corruption itself, however, was far less troubling than the bank’s menacing power trajectory. ^{Footnote 71} If the bank’s “monopoly were regularly renewed,” its directors could “put forth their strength to influence elections or control the affairs of the nation.” The veto was thus necessary to prevent the “prostitution of our Government” (Jackson, 10 July 1832).

Prosecuting the War

Just as Taney proposed, Jackson’s unequivocal veto turned the 1832 presidential election into a referendum on the bank (Jackson Reference Jackson and Newton Thorpe1909, pp. 262–263; Taney Reference Taney and Brent Swisher1958, p. 109). After Jackson’s strike, Biddle retaliated with a barrage from his presses (Govan Reference Govan1959, p. 188; McGrane Reference McGrane1919, p. 194–198). Ultimately, however, Biddle’s bitter denunciations and abstruse arguments proved no match for Jackson’s “colorful combination of noise and nonsense” (Remini Reference Remini1967, p. 103). Jackson trounced Henry Clay with four times the electoral votes—although his popular vote share was lower than it had been in 1828. Each side insisted that the populace had spoken in its favor. ^{Footnote 72} This triumph, however, became the billy club—or hickory cane—with which Jackson beat the bank to death.

Upon winning re-election, Jackson laid plans to finish off the bank. First, he moved the government’s bank deposits to a variety of “Pet Banks” (Catterall Reference Catterall1903, p. 293; Hammond Reference Hammond1957, pp. 412, 420; Remini 1969, p. 111). Many of these banks overleveraged the funds (Hammond 1954, p. 420; Remini 1969, p. 171). At the same time, the loss of capital forced the bank to contract its supply of notes in circulation (Catterall Reference Catterall1903, p. 298). Biddle zealously blamed Jackson for the curtailment of credit and the crises that followed (Govan Reference Govan1959, pp. 247–259).