Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1913-12-12
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THE UNITED STATES BANK.
How Famous Institution Was Killed
by Andrew Jackson.

Dy RnQTe" JdCNS0Hs
The president of the National City
Bank of New York, Frank A. Wander
l. lip, has suggested to the senators and
representatives at Washington VINO
are trying to thrash out the currency
problem, a plan for a United States
reserve bank which shall be national
in scope. Mr.. Vanderlip's plan pro-
vides for a bank with capital stock
of 100 million dollars to be subscrib-
ed either by the government or py
private individuals and banks.
1t wouldn't make much difference
as far as the administration of the
bank would be concerned, which OF
these alternatives were adopted, for
the stock would have no voting pow
er. Stockholders would merely re-
ceive dividends of 81 or 6 per cent.
The bank would be governed by a
commission Of even directors, appoint
ed by the president and confirmed by
the senate, and it would be bankers
bank as far as its customers were con-
cerned; that is to say, it would lend
money to banks, not to individuals.
The Federal government would de-
post all it's money in the United
States Bank.
This proposal of Mr.. Vanderlip's is
interesting in many ways, not the least
of which is the contrast which it Of
fers to the old United States Bank
which Andrew Jackson put out OF ex-
istence eighty years ago. That was
bank in which individuals had the
whip hand-the Federal government
owned only 20 per cent Of the stock
so that the bank was able to defy the
government and run its affairs to suit
itself. Jackson believed it was great
menace, a legalized money trust, and
from the time he came into office he
exerted every effort to destroy the
Bank of the United States. He sue
ceeded finally.
To begin at the beginning, however
The first Bank of the United States
was established in 1871 for the pur-
pose of remedying some of the very
evils Mr.. Vanderlip believes his plan
might obviate-the evils Of faulty
currency system. In the early days
of the republic our national finances
were in a chaotic condition. The cur
rency was irregular and debased when
the Revolution closed; all sorts OF
money was in Observation-Disclosures
shillings, Spanish dollars, scrip" OF
paper money, issued by the Continen'
tai congress-, whose value was mat
ter of argument, depending upon
whether you believed the government
was solvent. A great deal Of the coin
lin circulation was clipped and filed
and plugged, and wild cat banks Is
sued paper money, whose value was
a matter Of the widest speculation
To help bring order out Of this imam
cial chaos the first Bank Of the Unit
ed States was organized, with 2O'
wear charter. It had capitalization
of 10 million dollars, of which the Fed
eral government subscribed million
dollars, and it was we'll managed
and successful institution. Alexander
Hamilton was it's principal sponsor.
This bank ran a successful course
for twenty years; its notes were lega
tender, and were about the only paper
money in the country which really wa:
good as gold" However, the firs
Bank Of the United States died a nat
ural death in 1911, when congress re-
j fused to renew its charter. The bill
for a new charter failed by one vote
lin the senate-the deciding vote
which the vice president, George Clin
ton, cast.
i There followed five years of wilc
cat banking in the United States. Al
ter the War of 1912 many Of the same
currency troubles which had followed
the Revolution required. In 1916 con
gress was glad enough to charter
lsecond Bank of the United States.
This second United States Bank diff
fered in some ways from the first in
stitution. AS has been pointed out, th'
government subscribed for only 20 pc
cent Of this banks stock, instead OF 81
per cent, as it had in the first bank
That gave the control Of the board o
directors to wealthy private citizen
instead of to the Federal government
However, the second bank Of tn
United States prospered. Its note
were sound money, and 1t was
healthy fiscal institution up to tn
time Andrew Jackson began his wa
against it. Jackson's attack on tn
bank was founded on his implicit be
lief that the bank held too much des
potic power. 1t was a money trust, h
insisted, and it used its influence 70
evil, strangling smaller private insti
tutions that were in its way, and de
, veloping favorite sections Of the coun
try instead of working disinterestedl
, for the benefit Of the whole country
There is no doubt that there was
good deal of truth in Jackson's con
5 tentions, and, whatever the banks &C
tual offenses had been, it had NOR
l power than should have been concen
, trated in the hands of any set Of citi
= zens, however honest or able. Tn
bank had great and grave possibilitie
] of evil in it.
e There is no doubt, either, tina
Jackson was carried away in the hea
/ of his angry determination to kill tn
= Bank of the United States. He Tough
the bank in ways which were neithe
wise nor fair, and when he had wo
his fight, the condition Of finances i
: the United States was, for the tim
being at least, much worse than it ha
been when the Bank of the Unite
States was in existence and receivin
aid and cooperation Of the govern
: ment. Jackson believed the good h
accomplished by the destruction Q
the bank was worth the incidenta
evils it involved.
l When Jackson first became presi