Nicholas Biddle (1786-1844) was president of the Second Bank of the United States from 1823 to 1836. He was an early advocate of the debated principle of central banking, and under his direction the Bank performed most of the functions of present-day central banks.

Nicholas Biddle was born into a prominent Philadelphia family on Jan. 8, 1786. He attended the University of Pennsylvania and graduated from the College of New Jersey at Princeton in 1801. He began the study of law, but, too young to enter practice, he lived in Europe from 1804 to 1807, first as secretary to John Armstrong, the U.S. minister to Napoleonic France, then as a traveler, and finally as a secretary to James Monroe, the U.S. minister in England.

Biddle then began practicing law but soon became dissatisfied. Between 1810 and 1823 he was the managing trustee of his wife's estate, one of the largest in Philadelphia; prepared the journals of the Lewis and Clark expedition for publication in 1814; edited (1812-1814) the Portfolio, a Philadelphia literary magazine; served in the lower house and senate of the Pennsylvania Legislature; prepared (1818) a digest of the Commercial Regulations of Foreign Countries with Which the United States Have Commercial Intercourse for the Department of State; and from January 1819 through 1821 was one of the five government directors of the Second Bank of the United States.

In January 1823 Biddle was elected president of the Bank--a mixed public and private institution--being acceptable to the government and the shareholders alike but serving as a director by presidential appointment. Under Biddle's administration the Bank, centered in Philadelphia with branches in the leading American commercial cities, performed a useful function for all economic interests and groups through facilitating the exchange of goods and payments in this predominantly commercial society. The currency supplied by the Bank, no matter where made payable, was received in most places at par, sometimes commanded a premium, and was never at a discount of more than 1/4 of 1 percent. Notes issued by local state banks circulated at par in the immediate vicinity of their issue, and this mixed national currency was elastic, uniform, sound, and completely adequate for the needs of the expanding economy. The developing transportation system, which united the vast geographical areas of the United States and connected them with Europe, was paralleled by a system of domestic and foreign exchange that facilitated payments and increased the profits of trade.

The American people as a whole seemed satisfied with the currency and credit system and the operations of the national bank, but President Andrew Jackson, who distrusted all banks, charged that the Second Bank of the United States was unconstitutional and that if its power was not checked it would enable a financial oligarchy to dominate the nation. Jackson began an assault upon the Bank in 1829, but many of the members of his party (the Democrats) in Congress did not agree. The Bank, in their opinion, was a useful and necessary arm of the Treasury, and they, in alliance with most of the opposition party (the National Republicans) rechartered the institution in 1832. President Jackson, angered by this defiance of his expressed will, vetoed the rechartering bill and in the fall of 1833 removed the government deposits from the Bank's custody.

Biddle refused to accept defeat. A successor bank, the United States Bank of Pennsylvania, was organized in 1836, and when the Panic of 1837--in part a product of Jackson's financial policies--struck the nation, Biddle almost single-handedly restored national prosperity within a year. He resigned from the Bank in April 1839, believing it and the nation safe and secure. But shortly afterward the Bank of England, itself in danger, renewed financial pressure on the United States, and 2 years later the United States Bank closed its doors.

This costly failure not only discredited Biddle but also the principle of central banking, and it was not until the early years of the 20th century that the United States, through the creation of the Federal Reserve Banks (1912), once more returned to the system that had provided the national economy with a uniform, sound, and elastic currency. Biddle, completely disgraced, died on Feb. 27, 1844, and the general verdict on him and his career was stated by William Cullen Bryant, a Jacksonian editor and poet, who reported that Biddle had died "at his country seat, where he had passed the last of his days in elegant retirement, which, if justice had taken place, would have been spent in the penitentiary."

Further Reading

• The only biography of Nicholas Biddle is Thomas P. Govan, Nicholas Biddle: Nationalist and Public Banker (1959). Biddle's work as a banker has been extensively treated in Ralph C. H. Catterall, The Second Bank of the United States (1903); Fritz Redlich, The Molding of American Banking: Men and Ideas (2 vols., 1947-1951); Walter B. Smith, Economic Aspects of the Second Bank of the United States (1953); and Bray Hammond, Banks and Politics in America from the Revolution to the Civil War (1957). An unfavorable view of Biddle is in Arthur M. Schlesinger, Jr., The Age of Jackson (1945).