ECONOMIC CENTRALIZATION IN A DEMOCRACY
George Tucker
The second Bank of the United States -- patterned after the first Bank of the United States which had existed from 1791 to 1811 -- was chartered in 1816 for a period of twenty years. The Bank was a mixed public-private corporation, with five directors representing the federal government and twenty directors chosen by its private stockholders. As the most powerful financial institution in the country, the Bank exerted considerable control over the amount of credit available and consequently came under severe criticism from time to time. In the famous case of McCulloch v. Maryland ( 1819), the U.S. Supreme Court upheld the power of Congress to incorporate the Bank, but many people, including Andrew Jackson, continued to doubt its constitutionality. In 1832 Clay, thinking to defeat Jackson for reelection, persuaded Bank president Nicholas Biddle to make the rechartering of the BUS a campaign issue. The plan did not succeed and, amidst stormy controversy, the Bank's federal charter was allowed to expire in 1836. For a number of years thereafter the Whig party advocated the revival of a national bank.
George Tucker ( 1775- 1861), an economist and moral philosopher, taught at the University of Virginia. His defense of the operation of the national Bank is orthodox Whiggery. He tries with particular care to rebut the favorite charge of the lacksonians that the Bank was an undemocratic institution conferring excessive influence on the wealthy elite. His argument is of course partisan pleading and cannot be taken as an impartial estimate of the Bank's role in politics. A lifelong friend and admirer of his fellow Virginian Thomas Jefferson, Tucker shows that support for the Bank was by no means confined to northeaster.
SOURCE: George Tucker, "Examination of the Political Objections to a National Bank," The Theory of Money and Banks Investigated ( Boston, 1839), pp. 306-327.
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