Thursday, November 4, 2010

Current Reading

FLG isn't going to update his current reading list, but he had to run to campus yesterday, and while he was there picked up a copy of John M. McFaul's 1972 book, The Politics of Jacksonian Finance.

Why did FLG pick this up? He felt it would be a good way to put the current populist anti-bank bailout anger in historical context.

Although, he borrowed this book, but he still has a stack of stuff he wants to read and hasn't.

1 comment:

The Ancient said...

Hmmm.

Here's a fair summary of another book:

Timothy J. Graczewski of Burlingame, CA United States reviewed 9/12/2002...

Interesting and original -- but tough to get through.

If you've read Schlesinger's "The Age of Jackson" or other liberal interpretations of Jackson and the eponymous socio-political movement that swept the US in the 1830s and are interested in an alternative viewpoint, Bray Hammond's "Banks and Politics in America" (the 1958 Pulitzer Prize winner in history) should be at the top of your reading list.

I hasten to add, however, that this book is an extremely long and arcane history of American banking - central banking, to be more precise - with flashes of cogent analysis and iconoclastic conclusions. In short, this book is most definitely NOT for everyone, and even the most committed students will find that the author makes you work for the insights the book delivers.

Although the book covers over a century of early American banking (from the first colonial land grant offices to the Civil War), the unmistakable focus is Nicolas Biddle's management of the second Bank of the United States (BUS) and the successful Jacksonian assault on that institution beginning in 1832. During the course of his narrative Hammond mercilessly shreds the shibboleths of liberal historians: poor and simple agrarians fought the moneyed elite through Andrew Jackson and his reforms; Nicolas Biddle was a conniving, flagitious political operator; the BUS was a corrupt, inefficient institution that fattened lazy aristocrats at the expense of the humble productive classes; the West was the primary source of hostility toward the BUS. All nonsense, Hammond argues.

Rather, Hammond's thesis is that the main Jacksonian enemies of the BUS - not one of whom was an agrarian, he points out - used Jeffersonian language merely as a pretext to eradicate an institution that was successfully stabilizing the national currency and thus thwarting their speculative business interests. Although he acknowledges that residual agrarian hostility to banks and the resentment of states rights politicians to the intrusion of federal power through the BUS were contributing factors, Hammond argues that the primary impetus for destroying Biddle and the BUS was provided by a new and burgeoning group of business elite, primarily from New York. Made up of ambitious entrepreneurs and local bankers, these new Jacksonians bridled at the regulatory influence the BUS had on restraining free credit. Moreover, because the BUS collected all federal receipts, which at that time were mostly import duties on goods flowing through New York City, local New York banks could not profit from the lucrative trade their city supported. They believed the use of that currency was rightfully theirs, and they resented the fact it was sent to a bank run out of Philadelphia and controlled by Philadelphians (and foreigners, or so many believed, but Hammond denies).

Thus, Hammond concludes, the "Bank War" was really a fight between conservative, principled businessmen on the one side and reckless, "get rich quick" speculators on the other. He holds Nicholas Biddle up as second only to Alexander Hamilton for his contribution in creating the greatest economic engine the world has ever known: American capitalism. Andrew Jackson, meanwhile, is disparaged as a well-meaning dolt whose supposed reforms did nothing to benefit the common man he professed to represent, but rather destroyed the most effective central banking system ever developed by the 1830s.

 
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