Kenneth (kensmind) wrote in bookish,

Book Review: The Bank War by Paul Kahan

Poor Andrew Jackson. Lately his legacy as president has been under attack, and rightly so. Not only was the 7th President a slaveholder, and an unapologetic supporter of slavery (not unusual for his time); he was also responsible for the unconscionable Native American removal policy (ably described and exposed in Steve Inskeep's excellent 2015 work Jacksonland, reviewed here). Adding to the list of Jackson's defects of character as President, author and historian Paul Kahan explains how Jackson ruined the US economy for spiteful and selfish reasons, leading to the "Panic of 1837", in his recent (December 2015) book The Bank War: Andrew Jackson, Nicholas Biddle, and the Fight For American Finance.

After Alexander Hamilton's First Bank of the United States failed to be rechartered in 1811, the nation soon learned the importance of having a national bank, especially when the lack of a national bank proved to be an impediment to fighting the war of 1812. The Second Bank of the United States was created in 1816 and in 1823 Nicholas Biddle became the bank's third and final president. Initially Biddle was politically neutral and was willing to work with whoever was in power to convince them that a strong central bank was important for the financial health of the nation. In 1829 the US Supreme Court, in McCulloch v. Maryland, had confirmed the constitutional validity of the bank, and the institution seemed strong and healthy.

Enter Andrew Jackson, the hero of New Orleans and man of the people. No fan of the bank, Jackson was destined to clash with Biddle as the time for expiration of the bank's charter approached. When Biddle pressed Congress to recharter the bank in advance of Jackson's bid for re-election in 1832, the Bank War was on.

Kahan very capably explains the political and financial chess game played between the two protagonists which not only had political implications, but which also affected the economic security of everyday Americans. Jackson vetoed the bill to recharter the bank, sponsored by his 1832 election opponent Henry Clay, and he would later feel himself vindicated in this decision by his lopsided victory in his re-election bid (219 to 49 in the electoral college). Kahan explains Biddle's vain efforts to fight back and how the vindictiveness of both men hurt the economy, leading to lasting negative economic consequences for decades to come.

As Kahan explains, a conflict over banking hardly seems sexy or interesting, and yet it captivated a nation and led to battles in Congress, at the ballot box and in the media (where one Boston newspaper wrote the Bank's epitaph as "Biddled, Diddled and Undone"). Kahan also describes the personalities and allegiances of other key players of the time including future President Martin Van Buren, as well as Jackson's treasury secretaries Louis McLane and Roger Taney and Vice-President John C. Calhoun. The author also makes use of contemporary newspaper cartoons to give the reader a better feel for the issues of the day.

Kahan's strength is that he is able to explain these complicated issues so concisely (the book is only 160 pages) but so capably. He concludes, probably quite correctly, that the Bank War was second in importance to the nation's future only to the Civil War during 19th century history. He reminds the reader of a forgotten but important part of the nation's past and also ably makes the case that, rather than being a "man of the people" and a great champion of democracy, Jackson behaved more like a monarch, and in the end, Biddle wasn't much better. This book is interesting, well-written and intellectually very stimulating. It is a pleasure to read, especially for those with an interest in American political history and in American economic history.
Tags: author: k, genre: non-fiction, review, subject: biography, subject: history

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