The American Banking System from 1800-1810
Looking back to the outset of the 19th century, it is impossible to say that any real banking system had really been developed in the US. This is to say that, though there were roughly 120 private commercial banks that had been chartered by new state governments, the so-called system was scarcely organized. It was ad hoc in nature and directly linked to the merchant banking practices of the pre-independence period. The years preceding the turn of the century were important because they brought a central banking authority onto the scene. In 1789 the new federal government established a position for the Secretary of the Treasury. As we know, the first to hold this prestigious title was Alexander Hamilton. He accomplished a great deal in the 11 years leading up to the year 1800. Most notably his actions were largely responsible for the creation of the First Bank of the United States, which was given a charter in 1791. This thrust towards central banking was only to last 20 years, however. Up for review in 1811, the bank’s charter was not renewed.
This paper will argue that the failure to renew the First Bank of the United State’s charter was a direct result of the strong ideological differences between state centered and federalist politics. Many were very skeptical about a strong centralized banking system, while others believed that the only way to create unity in the country was through a highly focused central banking system. Despite the relative efficiency of the First Bank of the United States, and despite the fact that it is widely considered to be a success by economic historians, the general suspicion of banking led to its demise. In other words, this paper will argue that the 1800-1810 period was one of exhaustive tension between centralists and de-centralists. This had important and lasting effects on the banking system, the most obvious being that, in the following century, state banks proliferated to the point where they were chartered with abandon. As John K. Galbraith noted, “every location large enough to have a church, a tavern, or a blacksmith shop was deemed a suitable place for setting up a bank. These banks issued notes, and other, more surprising enterprises, imitating the banks, did likewise. Even barbers and bartenders competed with banks in this respect” (Flaherty, 1997: http://odur.let...
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...institution, and based on the bitter conflicts between Madison and Hamilton over state vs. federal power, the bank itself became politicized. As state-led forces increased their popularity, it is wholly unsurprising that the First Bank of the US was one of the first things to go.
References
DeCarolis, Lisa Marie. The Precipice of Power
69. The Bank proved to be very unpopular among western land speculators and farmers, especially after the Panic of 1819 because it was one of the major contributors to inflation. It held federal tax receipts and regulated the amount of money circulating in the economy. Some people felt that that the Bank, and its particular president, had too much power to restrict the potentially profitable business dealings of smaller banks.
In the summer of 1832 and Congress renewed the Bank’s charter even though it wasn’t due until 1836. Jackson hesitated to approve of the charter, so Henry Clay and Nicholas Biddle went on the offensive to attempt to persuade Jackson to pass the bill. Jackson, having had his opinion on the banks cemented by Clay’s presence in the organization, then committed to de-establishing the Second National Bank. He waged war against Biddle in particular to make sure Biddle lost power. He vetoed the bank bill, and after winning the race to be reelected, he closed Biddle’s bank. He ordered his Secretary of the Treasury to move money from the Second National Bank to smaller, state banks. When Congress returned from its summer recess, it censured him for his actions. In 1836, Bank of US was dead, and the new democratic-congressmen expunged Jackson’s censure. Because Jackson had no formal plan for managing the nation’s funds after the Second National Bank closed, it caused problems in Van Buren’s administration. He destroyed the Bank of the United States, in the main, for personal reasons. Jackson hated the bank before his presidency because as a wealthy land and slave owner he had lost money due to its fiscal policies. He believed that Congress had no right under the constitution to charter a
In the beginning of the 1830s, the United States experienced a short period of expansion and a prosperous economy. Land sales, new taxes, such as the Tariff of 1833, and the newly constructed railroads brought a lot of money into the government’s possession; never before in the history of the country had the government experienced a surplus in its national bank. By 1835, the government was able to accumulate enough money to pay off its national debt. Much of the country was happy with this newly accumulated wealth, but President Jackson, before leaving office in 1836, issued what is called a Specie Circular. Many local and state governments liked to save specie, or gold and silver, and use paper money to take care of transactions. President Jackson, in his Specie Circular, said that the Treasury was no longer allowed to accept paper money as payment for the sales of land and the like. Most, if not all, of the country did not like this, and as a result many banks restricted credit and discontinued the loans. The effects of Jackson’s Specie Circular took effect in 1837, when Martin van Buren became president. All investors became scared, and in 1837, attempted to withdraw all of their money at once. Soon after this, unemployment and riots occurred in many cities, and the continued expansion of the railroad ceased to be.
There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States.
a bank for the United States. Hamilton said that the right to create the Bank
Within the tale of “Beowulf” four character traits can be found which define the Anglo Saxon Hero. The first is loyalty, as demonstrated by the relationship between Lord and thane. According to page 23 of the “Beowulf” introduction, “a relationship based less on subordination of one man’s will to another than on mutual trust and respect.” The second and third characteristics are strength and courage. The importance of these specific traits to the Anglo-Saxon people is clearly presented during the reciting of Sigemund’s tale within Heorot. As the song states, “He was adventurer most famous, far and wide through the nations, for deed of courage – he had prospered from that before, the protector of warriors – after the war-making of Heremod had come to an end, his strength and his courage” (38). The final piece which comprises the Anglo-Saxon hero is the notion of fame. The only after life a warrior could ever aspire to have was immortality through fame. One again this is explained by the introduction to the story, “Beowulf’s chief reward is pagan immortality the memory in the minds of later generations of a hero’s heroic actions” (24-25). By understanding what defines a hero it is a simple matter to comprehend why Beowulf is considered by some to be the greatest of all. He posses unfaltering loyalty to his king and allies, and save for his final battle his thanes show the same devotion to him. His strength is unparalleled, as he is able to defeat each of his opponents and perform feats of unmatched endurance. Beowulf’s courage, though motivated primarily by his own notion of fate, is, none the less, unwavering. And as a hero he achieved his desire for immortality through the poem itself. Each of the four heroic traits can be identified within the three battles in which Beowulf participates: His battle with Grendel, his undersea struggle with the Grendel’s Mother, and his final fight with the dragon. Before going off to do battle with Grendel, Beowulf gives a speech that may appear conceited to the modern reader, but is in actuality a simple device used to insure his immortality through fame. Beowulf states, “I claim myself no poorer in war strength, war works, than Grendel claims himself. Therefor I will not put him to sleep with a sword… and then may wise God, Holy Lord, assign glory on whichever hand seems good to him” (35-36).
Going hand in hand with his detestation of large, extremely controlling national governments, Jefferson was intent on having no national bank present in the US, but Hamilton was certain the country would benefit from one. For example, in a personal letter written by Alexander Hamilton, he wrote, “Mr. Madison, co-operating with Mr. Jefferson, is at the head of a faction, decidedly hostile to me, and my administration; and actuated by views... subversive of the principals of good government, and dangerous to the Union... Mr. Jefferson... [displays] his dislike of... funding [the] debt.” (Doc 2) Hamilton implied that by not advocating a national bank, Jefferson did not want to help the country pay off its debt. Jefferson, however, was dead set against having a national bank because he wanted the common people, such as the farmers, to have maximum influence on the government. This way, a strong central government could not have supreme political, economic, and social power, all of which together would open the doors for future corruption, even if the government was set up in the manner directed in the Constitution. Jefferson defended this judgement to the extent that he formed a political party so it could develop into a well-supported suggestion. Thus, the perspective on national banks could more efficiently progress into the point where it impacted the whole country and prevented the formation of a national bank. Equally, the excise tax proposed by Alexander Hamilton and carried out by Congress, factored in on Hamilton and Jefferson’s feud on having a national bank. In a letter written by Thomas Jefferson, he manifested his reaction to the excise tax by commenting, “The excise tax is an infernal one... [the public’s]
After the first War for Independence, The United States was approximately $52 million in debt. Due to having such bad financial problems, the United States created a national Bank to create one unified currency, to take away all state debts, and to issue loans to the people to promote growth. This National Bank was created by Alexander Hamilton who was a Federalist, and once Jefferson came to be the President, he continued the idea of the national bank because it was helping to reduce the national debt. The primary reason for the National Bank being a representation of a Federalist idea was because since it was issuing loans to people it was able to promote industrial growth which was one of the main goals of the Federalist party. From Jefferson continuing the use of the National Bank thru his presidency he demonstrates his need to continue a loose constructionist idea.
Weisberger, Bernard A. “The Bank War: History of First U.S. Government Bank.” American Heritage. July-Aug. 1997: 10-12. General OneFile. Web. 12 Apr. 2011.
Beowulf, physically and emotionally, is representative of the Germanic ideal hero. Beowulf is ?brave? (688), honest, and strong. One of the first scenes in the poem describes Beowulf?s arrival on the beach of a foreign land. Instead of fearing the large warrior that has arrived and summoning for help, the ?watchman? (229) is in awe of Beowulf. Before even getting to know Beowulf, the watchman thinks that this warrior is one of the strongest and noblest men he has ever seen: ?Nor have I seen/a mightier man-at-arms on this earth/than the one standing here: unless I am mistaken,/he is truly noble? (247-250). Therefore, Beowulf?s towering height and stature convince others that he is a hero. Like the typical hero, Beowulf gives boasts. While in Hrothgar?s kingdom, Beowulf defends himself against the kin-killer Unferth; Beowulf brags that he will kill Gren...
It can therefore be concluded that pop culture does have a significant influence on society in various ways. Although the modern trends will continue to change, there are always going to be a few trends from each generation that will never fade. These are the trends which will have an impact on society forever.
Beowulf is a hero who embodies the ideal characteristics in the Anglo-Saxon culture; these characteristics all come together to make up an epic tale. He possesses the virtues, traits and beliefs that were respected in the Anglo-Saxon culture. Beowulf displays these virtues in his own actions and words during different circumstances throughout the tale.
Popular culture embodies the beliefs, ideas, perspectives, attitudes, and images of various cultures. Popular culture is heavily influenced by mass media, key celebrity figures, movies and related entertainment, as well as sports and news. However, in the past decade, the Internet and social media has come to be a significant influence on pop culture.
Popular culture can be defined as the general accepted culture in society. Anyone can learn about what is the generally accepted culture in America because it’s usually advertised in music, books, fashion, literature, schools and the mass media to name a few. In the book images of color, images of crime, chapter 1 shows how Indians have been negatively affected by popular culture throughout the years. However, I would say that many races have been affected by popular culture to the point in which the identity and the heritage of different culture is rapidly disappearing.
Pop culture is a reflection of social change, not a cause of social change” (John Podhoretz). It encompasses the advertisements we see on T.V, the clothes we wear, the music we listen too, and it’s the reason Leonardo DiCaprio has not won an Oscar yet. It defines and dictates the desires and fears of the mainstream members of society; and it is so ingrained into our lives that it has become as natural as breathing. Moreover, adults never even bat an eyelash at all the pop culture and advertising that surrounds them since it has become just another part of everyday life. Pop culture is still somewhat seen as entertainment enjoyed by the lower class members of society; but pop culture standards change over time. A notable example of this is the sixteenth century author, William Shakespeare, since his works were considered pop culture, entertainment that could be enjoyed by everyone, but now they are considered literary classics. While pop culture encompasses most aspects of our lives, its influence is most obvious through each generations reaction to media,