Penn Wealth Publishing

2020.11.01 Penn Wealth Report Vol 8 Issue 04

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6 penn wealth Report volume 8 issue 04 01 nov 2020 Copyright 2020. All Rights Reserved. strategic vision e American Spirit Andrew Jackson's War Against the Second Bank of the United States In the election year of 1832, President Andrew Jackson delivered one of the most powerful vetoes in US history The Constitution of the United States, written in 1787 and ratified the following year, is the longest sur- viving active charter in the history of the world. e brilliance of the document is embodied in the fact that it laid out exactly what a centralized government could—and, more importantly, could not—do. To protect the sovereignty of the nation, for exam- ple, the federal government had the power to maintain a standing army. But the Founders were very keen to assure power resided at the lowest possible level, assur- ing the rights of the individual were not trampled by a draconian central authority. During his presidency, President Barrack Obama lamented the fact that the Constitution was a set of "negative rights," outlining what the federal gov- ernment could not do rather than what it could do. Statements such as this, from the leading individual authority of the time, illustrate the foresight and bril- liance of the Founders. e authors of the Constitution were acutely aware of the inclination of individuals in power to become so comfortable in their position that abuse of power, at the expense of individual rights, was almost a given. It is fair to say that the entire document was written with this in mind, and this revolutionary contract for the young nation would serve as a master guardrail to prevent such abuse. It is human nature for individuals to see things through the prism of the contemporary world, failing to understand that most modern-day conditions are anything but unique. Hence, the oft-repeated argu- ment by many that the Founders could not possibly foresee—let alone plan for—what would transpire long after they were gone. But their collective pre- science, shaped by an extensive understanding of history, was nothing short of remarkable. ey under- stood that history repeated itself, and that humans would continue to act in a predictable manner. Take the modern power struggle between those who believe that only a central government can man- age the needs of a population, and those who believe power should reside at the lowest possible level. at precise battle was raging 200 years ago, as evidenced by Andrew Jackson's war on the Second Bank of the US. e Hamiltonian Second Bank receives its first charter. It would probably come as a surprise to most that the Second Bank of the United States, given a 20-year charter by Congress in 1816, was actually a private corporation. While accountable to the US Treasury, it was anything but a bank of the people. e bank's primary shareholder was the federal gov- ernment, with several thousand wealthy Europeans and several hundred wealthy Americans owning vir- tually all of its shares. e bank was responsible for handling the fiscal transactions of the government, and for helping to assure the access to capital for con- tinued economic growth. Despite being built upon the concept of a meritoc- racy, the US more resembled an aristocracy in the early 19th century. at was certainly the case with respect to the Second Bank, which loaned virtually no money to "average" Americans or small business owners, and the attitude of its pompous president, Nicholas Biddle. But a seismic shift was about to rock the country. 1837, by Ralph E.W. Earl; Public Domain

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