Nicholas Biddle (banker)

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This article is about Nicholas Biddle the banker. For Nicholas Biddle the naval officer, see Nicholas Biddle (naval officer).
Nicholas Biddle
Nicholas Biddle by William Inman crop.jpg
portrait by William Inman, c.1830s
Born (1786-01-08)January 8, 1786
Philadelphia, Pennsylvania, U.S.
Died February 27, 1844(1844-02-27) (aged 58)
Philadelphia, Pennsylvania, U.S.
Occupation Lawyer, Banker, Financier
Spouse(s) Jane M. Craig
Children Charles John Biddle
Parents Charles and Hannah (née Shepard) Biddle
Signature Appletons' Biddle Nicholas financier signature.png

Nicholas Biddle (January 8, 1786 – February 27, 1844) was an American financier who served as the president of the Second Bank of the United States.

Ancestry and early life[edit]

Nicholas Biddle was born in Philadelphia, Pennsylvania. Ancestors of the Biddle family immigrated to Pennsylvania when William Penn visited, and fought in the pre-Revolutionary colonial struggles. His father, Charles, was prominent in his devotion to the cause of American Independence and served as Vice-President of Pennsylvania, alongside President Benjamin Franklin.

An uncle with the same name, Nicholas Biddle, whose residence was in Philadelphia, was an early naval hero. Another uncle, Edward Biddle, was a member of the Congress of 1774. Young Nicholas was bright and well educated. He was enrolled at a prestigious academy in Pennsylvania at a very early age. Due to his rapid educational progress, he entered the University of Pennsylvania at the age of 10. When the university refused to award the teenager a degree, he transferred to Princeton and graduated in 1801, at 15, the class valedictorian. His older brother Thomas Biddle was a War of 1812 hero who died in a duel. His brother, Thomas, should not be confused with his cousin by the same name, who became a leading exchange broker in Philadelphia.[citation needed]

Biddle was offered an official position before he had even finished his law studies. As secretary to John Armstrong, a United States minister to France, he went abroad in 1804, and was in Paris at the time of Napoleon's coronation. Afterward, he participated in an audit related to the Louisiana Purchase, acquiring his first experience in financial affairs. Biddle traveled extensively through Europe, returning to England to serve as secretary for James Monroe, then United States minister to the Court of St. James's. At Cambridge, Biddle took part in a conversation with Cambridge professors involving comparison between modern Greek dialect and that of Homer; the incident captured Monroe's attention.[citation needed]

In 1807, Biddle returned home to Philadelphia. He practiced law and wrote, contributing papers to different publications on various subjects, but chiefly in the fine arts. He became associate editor of a magazine called Port-Folio, which was published from 1806-23. He married Jane Margaret Craig (born 1792) in 1811; the couple had six children.[1] When editor Joseph Dennie died in 1812, Biddle took over the magazine and lived on 7th Street, near Spruce Street.

Lewis and Clark[edit]

Biddle also prepared Lewis and Clark's report of their exploratory expedition to the mouth of the Columbia River for publication, and he encouraged President Thomas Jefferson to write an introductory memoir of Captain Meriwether Lewis. However, Biddle's name does not appear in the work, as he was elected to the state legislature (1810–1811) and was compelled to turn over the project to Paul Allen, who supervised its publication. With the consent of all parties, Allen was then recognized as the editor.[2]

Pennsylvania General Assembly[edit]

Biddle served in the Pennsylvania House of Representatives in 1810 and then served in the Pennsylvania State Senate in 1814.[3] He originated a bill favoring popular education almost a quarter of a century in advance of the times. Though the bill was initially defeated, it resurfaced repeatedly in different forms until, in 1836, the Pennsylvania common-school system was inaugurated as an indirect result of his efforts.[4]

Jackson slays the many-headed monster that is the Bank of the United States. Nicholas Biddle is in the middle, in the top hat.

The Bank of the United States[edit]

After Biddle moved to the Pennsylvania State Senate, he lobbied for the rechartering of the Second Bank of the United States. The Bank was rechartered in 1816, and President Monroe appointed Biddle as a federal government director. Upon the resignation of Bank president Langdon Cheves in 1822, Biddle became president. During his association with the Bank, he was directed by Monroe, under authority from Congress, to prepare a "Commercial Digest" of the laws and trade regulations of the world. For many years after, it was regarded as an authority on the subject.

During the Panic of 1819, a banking crisis and economic recession, critics charged that the Bank was to blame because of its tight credit policy. In late 1818, $4 million of interest payments on the bonds sold in 1803 to pay for the Louisiana Purchase was due, in either gold or silver, to European investors. The government had to get its hands on silver or gold. The Bank, as the government's fiscal agent, was required to make this payment on behalf of the government. The Bank was forced to demand the commercial banks that had been lent money in the form of fiat paper now repay in gold or silver—specie. This specie was sent to Europe. This rather sudden contraction of the monetary base after three currency and rampant speculation based on debt led to the panic of 1819.

In Tennessee, Andrew Jackson was hard-pressed to pay his debts in this period. He developed a lifelong hostility to all banks that were not completely backed by gold or silver. This meant, above all, hostility to the Second Bank of the United States[citation needed].

As Bank president, Biddle occasionally engaged in the techniques of central banking - controlling the nation's money supply, regulating interest rates, lending to state banks, and acting as the government's fiscal agent. When state banks became excessive in their lending practices, Biddle's Bank acted as a restraint. In a few instances, he even rescued state banks to prevent the risk of contagion spreading. He was important in the establishment of Girard College under the provisions of the founder's will. Girard had been the original promoter of the Second Bank and its largest investor. Girard died in 1831.

On August 26, 1831, Biddle's brother, Thomas, a War of 1812 veteran, was killed in a duel on Bloody Island (Mississippi River) at St. Louis, Missouri with Congressman Spencer Pettis. Thomas had taken offense to Pettis' criticizing Nicholas at the bank. After an exchange of letters to the editor Biddle accosted an ill Pettis in his hotel room. After Pettis recovered he challenged Thomas to a duel and both were killed when they exchanged shots from five feet apart.[5]

The "Bank War" began when President Jackson began criticizing the Bank early in his first term. Biddle, at the urging of Henry Clay and other Bank supporters, upped the ante when he applied for the Bank's re-charter in January 1832. This was four years before the charter was scheduled to expire and the hope was to force Jackson into making an unpopular decision that might cost him during an election year. But, once challenged, Jackson decided to veto the bill to re-charter the bank. Jackson, well known for his stubborn personality and steadfast leadership, still harbored ill will toward Clay from the 1824 presidential election. Clay's strategy failed and he lost to Jackson in November despite significant financial support from the Bank.

In early 1833, Jackson, despite opposition from his cabinet, decided to withdraw the government's funds out of the Bank. The secretary of the treasury, Louis McLane, professed moderate support for the Bank. He refused to withdraw the funds and would not resign, so Jackson transferred him to the state department to become secretary of state. McLane's successor, William J. Duane, was opposed to the Bank, but would not carry out Jackson's orders. After waiting four months, Jackson summarily dismissed Duane as well, replacing him with attorneys-general Roger B. Taney when Congress was out of session. In September 1833, Taney helped transfer the public deposits to seven state-chartered "pet" banks that were friendly to the administration. Faced with the loss of the federal deposits, Biddle decided to raise interest rates and deliberately induce a recession. A mild financial panic ensued from late-1833 to mid-1834. Meanwhile, Biddle and other Bank supporters attempted to renew the Bank's charter on numerous occasions. All of them failed.

In April 1836, the Bank's charter expired, but the institution continued as a state-chartered bank for several more years. In 1839, Biddle resigned from his post, and in 1841, amidst the panic of 1837, the Bank failed. Biddle was arrested and charged with fraud; he was later acquitted. He died soon after while still involved in civil suits.

Nicholas Biddle Estate[edit]

Main article: Andalusia (estate)

The Nicholas Biddle Estate in Bensalem Township, Pennsylvania, also known as Andalusia, is a National Historic Landmark.

References[edit]

Notes
  1. ^ University of Delaware: Biddle family papers
  2. ^ Cutright, Paul Russell (July 1982). Contributions of Philadelphia to Lewis and Clark History. Portland, Oregon: Lewis and Clark Trail Heritage Foundation, Inc. p. 34. ISBN 0-9678887-0-0. 
  3. ^ American National Biography-Nicholas Biddle
  4. ^ McGrane, Reginald C. (ed.), The Correspondence of Nicholas Biddle (1919)
  5. ^ Crack of the Pistol: Dueling in 19th Century Missouri - sos.mo.gov - Retrieved March 5, 2008
Primary sources
  • McGrane, Reginald C. (ed.) The Correspondence of Nicholas Biddle (1919)
Secondary sources

External links[edit]