History of the
Second Bank of the United States for kids: Background History of the First
Bank
The
American Currency History
started in the Colonial Era, before the Revolutionary War.
The
First Bank of the
United States was chartered by a private company for a term of
twenty years, by the United States Congress from 1791 to 1811. Its
was established in order to handle the massive Revolutionary war
debt and to create a standard form of currency. When the 20 year
charter was up, Congress would be required to approve or deny
renewal of its charter. The institute was well managed and paid good
dividends but its charter was not renewed. Many politicians objected
to the position played by the private sector in its operations
believing it should be under complete government control. States
began to open their own banks and issue their own currency . The
bill to re-charter failed in the House of Representatives on January
24, 1811.
History of the Second Bank of the United
States for kids: War of 1812
The need to establish the Second Bank of
the United States
arose quickly when the
War of 1812
erupted beginning on June 18, 1812 and
lasting for 2 years and 8 months ending
when the Treaty of Ghent was signed on
December 24, 1814. Once again the United
States was faced with another colossal
war debt. The War of 1812 against the
British ended with a stalemate but the
United States government realized
that they needed to become independent
from all the European countries in both
a commercial and economic sense. The
government needed to pay its war debts
and create a climate in which American
trade would flourish by providing money
and credit to the industrialists.
The Second Bank of the United States was
part of a plan to reach these goals.
President James Madison, with the
approval of Congress, granted the
charter in 1816.
History of the Second Bank of the United
States for kids: The American System
The American System
The need to establish the Second Bank of the United
States coincided with the ideas of
Henry Clay and the 'American System'. The American System was a
broad
economic plan aimed at improving the
economy of the US. Establishing the Second
Bank of the United States would provide the opportunity to offer easy credit to
Americans.
The Banknotes
Unlike the
promissory banknotes issued by state banks, the Second's
banknotes would be accepted throughout the country and
would become the only banknotes accepted for payment of
federal taxes.
Second Bank of the
United States
The info about the
Second Bank of the United States continues with interesting facts and
important information about this important event that occured during the presidency of the 4th President of the United States of America.
Facts about the Second Bank of the United States for kids
Interesting History Facts about the History of the Second Bank of
the United States are
detailed below.
Facts about the
History of the Second Bank of the United States for kids
Second Bank History Fact 1:
Its twenty year
charter ran from February 1816 to January 1836. Plans
were initially formulated in 1814 by James J. Dallas,
secretary of the treasury
Second Bank History Fact 2:
The charter was
signed into law by President James Madison on April 10,
1816
Second Bank History Fact 3:
It began operations
at its main branch in Philadelphia on January 7, 1817
Second Bank History Fact 4:
By 1832 it had 25
branches which helped to reach Henry Clay's goals in the
American Plan of cheap loans for farmers, economic
growth and westward expansion
Second Bank History Fact 5:
The United States
government owned 20% of its capital but Second Bank of
the United States while private investors owned the rest
- it was still a privately held banking corporation.
Second Bank History Fact 6:
The Second was the
envy of state banks because, although a commercial
enterprise, it received all of the government’s deposits
including foreign customs duties, it could make more
loans.
Second Bank History Fact
7: The institution was
answerable to the US Treasury and Congress and subject
to Treasury Department inspection
Second Bank History Fact
8: The institution
comprised of 25 directors, of which 5 were appointed by
the President, subject to Senate approval
Second Bank History Fact
9: It was initially
headquartered in Carpenters' Hall, Philadelphia, the
same as the First Bank
Second Bank History Fact
10: It was the only
banking institute permitted to have offices across the
nation.
Second Bank History Fact 11:
The first president
of the institute was William Jones, a political
appointee who had gone bankrupt
Second Bank History Fact 12:
The institute was
poorly run under William Jones, first extending far too
much credit, then quickly restricting it.
Second Bank History Fact 13:
The restrictions on
credit led to the
Panic of 1819,
often described as the first Important financial crisis in
the United States.
Second Bank History Fact 14:
William Jones
resigned his position in 1819 and was replaced by
Langdon Cheves, a politician and attorney from South
Carolina
Second Bank History Fact 15:
The Panic of 1819 was
followed by a steep recession that saw unemployment
soar, interest rates spike and the prices of farm goods
plummet
Second Bank History Fact 16:
Poor management
practices continued under Langdon Cheves who resigned in
1823
Second Bank History Fact 17:
A wealthy politician
from Philadelphia called Nicholas Biddle, who had
already served on the Board of Directors, was elected to
replace Langdon Cheves
Second Bank History Fact 18:
Nicholas Biddle
successfully turned the institute around bringing a new
period of economic expansion
Second Bank History Fact 19:
In 1824 its new
building was opened at 420 Chestnut Street in
Philadelphia
Second Bank History
Fact 20: In 1828 Andrew
Jackson was elected President of the U. S. and brought
with him a strong distrust of banks in general which
started the
Bank War
and a fight against unfair business practices.
Second Bank History Fact
21:
In 1832 a request was submitted to Congress to renew the
charter four years before the charter was due to expire.
Second Bank History Fact
22: President Andrew
Jackson vetoed the bill to re-charter in 1832
Second Bank History Fact
23: In 1833 President
Andrew Jackson ordered all federal government deposits
to be removed from the Second Bank of the United States
and deposited into state banks.
Second Bank History Fact
24: The Second Bank’s
charter expired in 1836 and the bank closed
Second Bank History Fact
25: Nicholas Biddle
attempted to keep the institution going as a commercial
bank, but the project failed and closed in 1841.
Facts about the
History of the Second Bank of the United States for kids
Second Bank of the United States for kids - President James Madison Video
The article on the
Second Bank of the United States provides an overview of one of the Important issues of his presidential term in office. The following
James Madison video will
give you additional important facts and dates about the political events experienced by the 4th American President whose presidency spanned from March 4, 1809 to March 4, 1817.
Second Bank of the United States
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