page_title: Second Bank of the United States
section_title: Establishment
hierarchical_section_title: Second Bank of the United States / History / Establishment
caption_attribution_description: English: A bank draft (No. 754, dated July 24, 1824), hand written and signed by Daniel Webster on a printed form in the amount of $3,001.01 drawn on the Boston branch of the Second Bank of the United States (1816-41) and made to the order of Titus Welles, Esq, an attorney and President of the Eagle Bank (Boston) who received the funds acting as executor of an estate. Then a member of Congress (Fed-MA 1st), Webster was also both legal counsel for the Congressionally chartered, Philadelphia based Bank as well as the Director of its Boston branch. In 1819 he won McCulloch v. Maryland, in the Supreme Court of the United States which reversed an earlier Maryland Court of Appeals holding in a tax case against the Baltimore branch of the Bank. Based on the Consumer Price Index, $3,001.01 would represent in excess $75,000 in 2017 US Dollars.
context_page_description: The Second Bank of the United States, located in Philadelphia, Pennsylvania, was the second federally authorized Hamiltonian national bank in the United States during its 20-year charter from February 1816 to January 1836. The bank's formal name, according to section 9 of its charter as passed by Congress, was "The President, Directors, and Company, of the Bank of the United States."
  A private corporation with public duties, the bank handled all fiscal transactions for the U.S. Government, and was accountable to Congress and the U.S. Treasury. Twenty percent of its capital was owned by the federal government, the bank's single largest stockholder. Four thousand private investors held 80% of the bank's capital, including three thousand Europeans. The bulk of the stocks were held by a few hundred wealthy Americans. In its time, the institution was the largest monied corporation in the world.
  The essential function of the bank was to regulate the public credit issued by private banking institutions through the fiscal duties it performed for the U.S. Treasury, and to establish a sound and stable national currency. The federal deposits endowed the BUS with its regulatory capacity.
context_section_description: The political support for the revival of a national banking system was rooted in the early 19th century transformation of the country from simple Jeffersonian agrarianism towards one interdependent with industrialization and finance. In the aftermath of the War of 1812 the federal government suffered from the disarray of an unregulated currency and a lack of fiscal order; business interests sought security for their government bonds. A national alliance arose to legislate a central bank to address these needs.
  The political climate—dubbed the Era of Good Feelings—favored the development of national programs and institutions, including a protective tariff, internal improvements and the revival of a Bank of the United States Southern and western support for the bank, led by Republican nationalists John C. Calhoun of South Carolina and Henry Clay of Kentucky was decisive in the successful chartering effort. The charter was signed into law by James Madison on April 10, 1816. Subsequent efforts by Calhoun and Clay to earmark the bank's $1.5 million establishment "bonus", and annual dividends estimated at $650,000, as a fund for internal improvements, were vetoed by President Madison, on strict constructionist grounds.
  Opposition to the bank's revival emanated from two interests. Old Republicans, represented by John Taylor of Caroline and John Randolph of Roanoke characterized the Second Bank of the United States as both constitutionally illegitimate and a direct threat to Jeffersonian agrarianism, state sovereignty and the institution of slavery, expressed by Taylor's statement that "...if Congress could incorporate a bank, it might emancipate a slave". Hostile to the regulatory effects of the central bank, private banks—proliferating with or without state charters—had scuttled rechartering of the first BUS in 1811. These interests played significant roles in undermining the institution during the administration of U.S. President Andrew Jackson (1829–1837).
caption: An 1824 draft on the Bank written and signed by Daniel Webster, its attorney and the director of the Boston branch.
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