This is the last of a three part series on the second Bank of the United States. In this essay we will take an analytical look at President Andrew Jackson’s veto message.

The message is one of the most cited documents in conspiracy theory circles. After Congress passed the recharter bill, it was given to President Jackson to either sign or veto at his discretion. This move was planned by the pro-bank forces to discredit President Jackson. If he should sign the bill, he would abandon everything that he had said earlier on the recharter question. If he didn’t sign the bill, he would be taking a concrete stand on an issue that was sure to electrify the voters. Up until this point in the election, Jackson’s popularity was never in doubt. But by taking the recharter issue, Jackson was taking a risk that would shriek the modern political operative. The Bank of the United States was a popular institution even at this point in the election. Surely, his opponents thought, it was political suicide to dare destroy one of the most popular institutions in America.

But before we get to the message itself, lets take a short digression to what other historians have said of the message. Below are several opinions of the recharter veto message.

Despite Blair’s encomiums, the veto was weak in its reasoning. Its argument that a national bank in the eighteen-thirties needed no more capital than one that had existed thirty years before betrayed that reluctance to face realistically the problems of a rapidly developing economy that was so characteristic of the Jacksonians. The veto repeatedly stated that the bank was a monopoly, which was true only if monopoly were defined in such fashion as to divest the word of its real meaning. It ignored the Bank’s enormous services to the national economy. Neither then nor later did the President or his party offer an effective substitute for the Bank, and in the years that followed the veto, despite the fact that there were some painfully slow local improvements in banking practice, the United States sank from a leading to a backward nation in the development of banking techniques.¹ [1]

It was the singular fortune of the bank-veto message to delight equally the friends and the foes of the bank. The opposition circulated it as a campaign document! Duff Green published it in his extra Telegraph, calling upon all the opponents of the administration to give it the widest publicity, since it would damn the administration wherever it was read. The New York American characterized it thus: "It is indeed and verily beneath contempt. It is an appeal of ignorance to ignorance, of the most unblushing partisan hostility to the obsequiousness of partisan servility. No man in the cabinet proper will be willing to share the ignominy of preparing or approving such a paper." Nicholas Biddle himself was enchanted with it, for he thought it had saved the bank by destroying the bank’s great enemy. "You ask," he wrote to Henry Clay, "what is the effect of the veto? My impression is, that it is working as well as the friends of the bank and of the country could desire. I have always deplored making the bank a party question, but since the President will have it so, he must pay the penalty of his own rashness. As to the veto message, I am delighted with it. It has all the fury of a chained panther, biting the bars of his cage. It is really a manifesto of anarchy, such as Marat or Robespierre might have issued to the mob of the Faubourg St. Antoine; and my hope is, that it will contribute to relieve the country from the dominion of these miserable people.² [2]

The message accompanying the veto is a famous state paper. It is legalistic, demagogic, and full of sham. Its economic reasoning was said by Professor Catterall, over fifty years ago, to be beneath contempt. Its level is now no higher....It ignored the public nature of the Bank and repudiated its regulatory responsibilities: all that monetary regulation required was a mint and an occasional act of Congress. The message rested heavily on an identification of the Bank with the rich, by whom it was used to oppress the poor. [4]

On July 10, 1832, the president sent Congress a veto message....The words belonged to Amos Kendall and Roger B. Taney, the self-righteous indignation to Andrew Jackson. Instead of reciting the Bank’s political sins, this triumvirate cast the entire message in the language of social apocalypse. The Bank was an engine of aristocracy, the symbol of special privilege, and the cause of the nation’s discontent. Worse still, it was not even an indigenous monster, but rather the bastard offspring of American and European capitalism, ever susceptible to foreign influence. No matter that the Supreme Court had declared the Bank both national and constitutional. The president reserved for himself the right to interpret such matters....In issuing this veto and making himself equal to two-thirds of Congress, Jackson did not strengthen the presidency, nor did he intend to. He justified his veto on the ground of state rights and limited government, forswearing any desire to augment executive prerogative....far from being a prescription for enlarged executive authority, the Bank veto was a clever campaign document designed to simplify the issues. Democrats asked voters to choose between the forces of entrenched aristocracy and simple government, between a foreign dictatorship and a native American hero, between corruption and innocence-between the Bank and Andrew Jackson. [5]

Jackson devoted most of his veto message to three general topics: (1) the injustice that is inherent in granting a government-sponsored monopoly to the Bank; (2) the unconstitutionality of the Bank even if it were not unjust; and (3) the danger to the country in having the Bank heavily dominated by foreign investors. [6]

The bill "to modify and continue" the act entitled "An act to incorporate the subscribers to the Bank of the United States" was presented to me on the 4th July instant. Having considered it with that solemn regard to the principles of the Constitution which the day was calculated to inspire, and come to the conclusion that it not to become a law, I herewith return it to the Senate, in which it originated, with my objections.
The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders.

It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners. By this act the American Republic proposes virtually to make them a present of some millions of dollars. For these gratuities to foreigners and to some of our own opulent citizens the act secures no equivalent whatever.

It was frequently implied in the message that foreign investments in America were objectionable. The Jacksonians, however, did not discourage foreign borrowing as a matter of general policy. With the possible exception of Jackson himself, they knew as well as anyone that a new country eagerly bent on a rapid exploitation of its resources procures abroad all the capital it can. Their objecting to the Bank’s foreign shareholders could only have been to impress the ignorant, who were numerous. [7]

Another important continuity between the old [first Bank of the United States] and the new Bank was the concentration of foreign investment. In fact, the largest single block of stock in the new Bank, about one third in all, was held by this group. It certainly is no exaggeration to say that the Second Bank of the United States was rooted as deeply in Britain as it was in America. [8]

Griffin states again:

Even though foreign investors technically were not allowed to vote their shares, their financial power was so great that the American investors were clearly beholden to them and would likely follow their instructions. [12]

The seventh charge: "Foreigners voting for directors through their trustees." I know nothing of this charge. But the fact can be easily ascertained from the bank itself. I have no doubt that, so far as it is a charge at all, it will turn out to be wholly without foundation. It may be that stock has been owned by a foreigner, and yet held in the name of some citizen of the United States. But how, I ask, can the bank prevent an American stockholder from voting on stock held by him, on the ground of a secret trust? This is no abuse for which the bank is answerable, unless the bank has been cognizant of the fact, and had the power of correcting the abuse. This charge may be answered from the books and records of the bank, in five minutes. [13]

Jackson went further and suggested that foreign ownership would invite "political involvements." Other critics suggested that it would lead to paralysis of the Bank in the event of war. However, this line of thought was given little prominence, perhaps because even the Bank’s enemies regarded it as absurd. They were undoubtedly so sincere in their belief that the Bank was a public enemy that they did not stoop to this politically powerful, though erroneous, line of attack. [14]

Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people. It is due to them, therefore, if their Government sell monopolies and exclusive privileges, that they should at least exact for them as much as they are worth in open market.

But this act does not permit competition in the purchase of this monopoly. It seems to be predicated on the erroneous idea that the present stockholders have a prescriptive right not only to the favor but to the bounty of Government. It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class. For their benefit does this act exclude the whole American people from competition in the purchase of this monopoly and dispose of it for many millions less than it is worth.

In another of its bearings this provision is fraught with danger. Of the twenty-five directors of this bank five are chosen by the Government and twenty by the citizen stockholders. From all voice in these elections the foreign stockholders are excluded by the charter. In proportion, therefore, as the stock is transferred to foreign holders the extent of suffrage in the choice of directors is curtailed. Already is almost a third of the stock in foreign hands and not represented in elections. It is constantly passing out of the country, and this act will accelerate its departure The entire control of the institution would necessarily fall into the hands of a few citizen stockholders, and the ease with which the object would be accomplished would be a temptation to designing men to secure that control in their own hands by monopolizing the remaining stock. There is danger that a president and directors would then be able to elect themselves from year to year, and without responsibility or control manage the whole concerns of the bank during the existence of its charter. It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few men irresponsible to the people.

Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country?….Will there not be cause to tremble for the purity of our elections in peace and for the independence or our country in war?….Of the course which would be pursued by a bank almost wholly owned by the subjects of a foreign power, and managed by those whose interests, if not affections, would run in the same direction there can be no doubt. All its operations within would be in aid of the hostile fleets and armies without. Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than the naval and military power of the enemy.

To this end, the message made its way solemnly into the absurd. If the Bank came to be mainly owned abroad, it was said, and if the owners were of a country with which war arose, what would be the condition of the United States?….The Bank, that is, though situated across the ocean from its "owners" and in the jurisdiction of a government possessing police powers of its own, was pictured as able nevertheless to defy that government. Yet it was recognized that the charter denied foreign shareholders any part in control of the Bank; for paragraphs earlier in the message, the argument had been that since foreign shareholders had no vote, any increase in their holdings would have the effect of throwing control of the Bank into the laps of a diminishing proportion of domestic shareholders. The message had things both ways. The foreign stockholders were on the one hand a menace because they might control the Bank; they were also a menace because they could not. [15]

So abundant is domestic capital that competition in subscribing for the stock of local banks has recently led almost to riots. To a bank exclusively of American stockholders, possessing the powers and privileges granted by this act, subscriptions for $200,000,000 could be readily obtained.

[On the substance of the above,] He was doubtless right; but they could be obtained only in the fictitious capital that in other paragraphs incensed him. By the hard-money standards he really cherished, not one-tenth of the $200,000,000 existed in the country altogether. [16]

The Congress, the executive, and the Court must each for itself be guided by its own opinion of the Constitution. Each public officer who takes an oath to support the Constitution swears that he will support it as he understands it, and not as it is understood by others. It is as much the duty of the House of Representatives, of the Senate, and of the President to decide upon the constitutionality of any bill or resolution which may be presented to them for passage or approval as it is of the supreme judges when it may be brought before them for judicial decision.

Jackson continues:

The old Bank of the United States possessed capital of only $11,000,000, which was found fully sufficient to enable it with dispatch and safety to perform all the functions required of it by the Government. The capital of the present bank is 35,000,000 - at least twenty-four more than experience has proved to be necessary to enable a bank to perform its public functions. The public debt which existed during the period of the old bank and on the establishment of the new has been nearly paid off, and our revenue will soon be reduced. This increase of capital is therefore not for public but private purposes.

It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society - the farmers, mechanics, and laborers - who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils only exist in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.

It is also worthy of remark, that a very considerable portion of the stock, very nearly six millions, is held by trustees and guardians, for the use of females and orphan children, and charitable and other institutions. Of the twenty-eight millions of the stock which is owned by individuals, only three millions four hundred and fifty thousand is now held by the original subscribers. All the rest has been purchased at the market prices-a large portion of it, probably, when those prices were higher than at present. Most of the investments made by wills, and deeds, and decrees in equity, for the use of females and minors, are believed to have been made when the stock was greatly above par [face value]. From this brief analysis, it will appear that there is nothing in the character or situation of the stockholders, which should make it desirable to deprive them of the advantage which they have fairly gained, by an application of their capital to purposes highly beneficial, as the committee have attempted to show, to the Government and People of the United States. If foreigners own seven millions of the stock of the bank, our own government owns as much; if wealthy men own more than two millions, men in moderate circumstances own between seven and eight millions; and widows, orphans, and institutions devoted to charitable and other purposes, own nearly six millions.
But, the objection that the stock is owned by men of large capital, would apply with equal, if not greater force, to any bank that could be organized. In the very nature of things, men who have large surplus capitals are the principal subscribers at the first organizing of a bank. Farmers and planters, merchants and manufacturers, having an active employment for their capitals, do not choose to be the first adventurers in a bank project. Accordingly, when the present bank went into operation, it is believed that most of the capital was owned by large capitalists, and under a much more unequal distribution than exists at present. The large amount of stock now held in trust for females and minors, has been principally, if not entirely, purchased since the bank went into operation; and the same remark is generally applicable to the stock in the hands of small holders. It is only when the character of a bank is fully established, and when its stock assumes a steady value, that these descriptions of persons make investments in it.
It is morally certain, therefore, that, if another distinct institution were created, on the expiration of the present charter, there would be a much greater portion of its capital subscribed by men of large fortunes, than is now owned by persons of this description, of the stock of the United States’ Bank. Indeed, it might be confidently predicted, that the large capitalists who now hold stock in that bank, would, from their local position and other advantages, be the first to forestall the subscriptions to the new bank, while the small stockholders, scattered over the country, would be probably excluded, and the females and minors, and others interested in trust investments made by decrees in equity, would be almost necessarily excluded, as the sanction of a court could scarcely be obtained, after the passage of the new act of incorporation, in time to authorize a subscription.
To destroy the existing bank, therefore, after it has rendered such signal services to the country, merely with a view to incorporate another, would be an act of cruelty and caprice, than of justice and wisdom, as it regards the present stockholders. It is no light matter to depreciate the property of individuals, honestly obtained, and usefully employed, to the extent of five millions six hundred thousand dollars, and the property of the Government, to the extent of one million four hundred thousand dollars, purely for the sake of change. It would indicate a fondness for experiment, which a wise Government will not indulge upon slight considerations. [17]

¹ The operative term here is "effective." Van Deusen is well aware that the veto message did mention an alternative to the Bank of the United States. All serious economic historians eschew Jackson’s alternative as ill-advised and unworthy of serious consideration. The alternative was that the proposed bank would become the instrument of the party in power. Hardly an alternative considering that the Bank of the United States was already independent, yet ended its career as a victim of politics.

² The paragraph just prior to the aforementioned citation is priceless in view of the subject matter being discussed. Parton opines: "Concerning the financial and legal principles laid down in this important document, financiers and lawyers differ in opinion. The humbler office of the present chronicler is to state that the bank-veto message of President Jackson came with convincing power upon a majority of the people of the United States. It settled the question. And it may be safely predicted that while that message endures, and the Union, as it is now constituted, endures, a bank of the United States can never exist. If ever it should be seriously proposed to establish one again, that message will rise from its grave in the volume of presidential messages, where it sleeps forgotten, to crush the proposition." [3]

1) G.G. Van Deusen, The Jacksonian Era (Prospect Heights, IL: Waveland Press, 1959; reprinted, HarperCollins, 1992) 67
2) J. Parton, Life of Andrew Jackson (New York: Mason Brothers, 1861) Volume III, p. 411
3) Parton, p. 410
4) B. Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton, NJ: Princeton University Press, 1957) 405
5) J.C. Curtis, Andrew Jackson and the Search for Vindication (Boston: Little, Brown and Company, 1976) 130, 131
6) G. Edward Griffin, The Creature from Jekyll Island (Appleton: American Opinion Publishing, Inc., 1995) 348-349
7) Hammond, p. 407
8) Griffin, p. 342-343
9) J.T. Holdsworth and D.R. Dewey, The First and Second Banks of the United States (Washington, DC: Government Printing Office, National Monetary Commission, vol. IV, 1910) 204
10) A. B. Hepburn, A History of Currency in the United States (New York: The Macmillan Co., 1903; reprinted, August M. Kelly Publishers, 1967) 94
11) Hepburn, p. 95
12) Griffin, p. 350
13) H. E. Krooss, ed., Documentary History of Banking and Currency in the United States (New York: Chelsea House Publishers, 1969) Volume 2, p. 780
14) W. B. Smith, Economic Aspects of the Second Bank of the United States (Cambridge: Harvard University Press, 1953) 248-249
15) Hammond, p. 407
16) Hammond, p. 407-408
17) M. St. Clair Clarke and D.A. Hall, Legislative and Documentary History of the Bank of the United States (Washington: Gales & Seaton, 1832; reprinted August M. Kelley, Publishers, 1967) 753

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