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Embargo Act of 1807

The Embargo Act of 1807 was a general trade embargo on all foreign nations that was enacted by the United States Congress. As a successor or replacement law for the 1806 Non-importation Act and passed as the Napoleonic Wars continued, it represented an escalation of attempts to persuade Britain to stop any impressment of American sailors and to respect American sovereignty and neutrality but also attempted to pressure France and other nations in the pursuit of general diplomatic and economic leverage.

In the first decade of the 19th century, American shipping grew. During the Napoleonic Wars, rival nations Britain and France targeted neutral American shipping as a means of disrupting the trade of the other nation. American merchantmen who were trading with "enemy nations" were seized as contraband of war by European navies. The British Royal Navy had impressed American sailors who had either been British-born or previously served on British ships, even if they now claimed to be American citizens with American papers. Incidents such as the Chesapeake–Leopard affair outraged Americans.

Congress imposed the embargo in direct response to these events. President Thomas Jefferson acted with restraint, weighed public support for retaliation, and recognized that the United States was militarily far weaker than either Britain or France. He recommended that Congress respond with commercial warfare, a policy that appealed to Jefferson both for being experimental and for foreseeably harming his domestic political opponents more than his allies, whatever its effect on the European belligerents. The 10th Congress was controlled by his allies and agreed to the Act, which was signed into law on December 22, 1807.

In terms of diplomacy, the Embargo failed to improve the American diplomatic position, and sharply increased international political tensions. Both widespread evasion of the embargo and loopholes in the legislation reduced its impact on its targets. British commercial shipping, which already dominated global trade, was successfully adapting to Napoleon's Continental System by pursuing new markets, particularly in the restive Spanish and Portuguese colonies in South America. Thus, British merchants were well-positioned to grow at American expense when the embargo sharply reduced American trade activity.

The Act's prohibition on imports stimulated the growth of nascent US domestic industries across the board, particularly the textile industry, and marked the beginning of the manufacturing system in the United States, reducing the nation's dependence upon imported manufactured goods.

Americans opposed to the Act launched bitter protests, particularly in New England commercial centers. Support for the declining Federalist Party, which intensely opposed Jefferson, temporarily rebounded and drove electoral gains in 1808 (Senate and House). In the waning days of Jefferson's presidency, the Non-Intercourse Act lifted all embargoes on American shipping except for cargos bound for British or French ports. Enacted on March 1, 1809, it exacerbated tensions with Britain and eventually led to the War of 1812.

Background
After a short truce between the French Revolutionary Wars and the Napoleonic Wars during 1802–1803, the European conflicts resumed and continued until the defeat of Napoleon Bonaparte in 1814. The wars caused American relations with both Britain and France to deteriorate rapidly. There was grave risk of war with one or the other. With Britain supreme on the sea and France on the land, the war developed into a struggle of blockade and counterblockade. The commercial war peaked in 1806 and 1807. Britain's Royal Navy shut down most European harbors to American ships unless they first traded through British ports. France declared a paper blockade of Britain but lacked a navy that could enforce it and seized American ships that obeyed British regulations. The Royal Navy needed large numbers of sailors, and was deeply angered at the American merchant fleet for being a haven for British deserters.

British impressment of American sailors humiliated the United States, which showed it to be unable to protect its ships and their sailors. The British practice of taking British deserters, many of them now American citizens, from American ships and conscripting them into the Royal Navy increased greatly after 1803, and it caused bitter anger in the United States.

On June 21, 1807, an American warship, the USS Chesapeake, was boarded on the high seas off the coast of Norfolk, Virginia by a British warship, HMS Leopard. The Chesapeake had been carrying four deserters from the Royal Navy, three of them American and one British. The four deserters, who had been issued American papers, were removed from the Chesapeake and taken to Halifax, Nova Scotia, where the lone Briton was hanged while the three Americans were initially sentenced to 500 lashes. (American diplomatic pressure led to the return of the three Americans, without the dispensing of punishment.) The outraged nation demanded action, and President Jefferson ordered all British ships out of American waters.

Initial legislation
Passed on December 22, 1807, the Act did the following:
 * An embargo was laid on all ships and vessels under US jurisdiction.
 * All ships and vessels were prevented from obtaining clearance to undertake in voyages to foreign ports or places.
 * The US President was allowed to make exceptions for ships under his immediate direction.
 * The President was authorized to enforce via instructions to revenue officers and the Navy.
 * It was not constructed to prevent the departure of any foreign ship or vessel, with or without cargo on board,
 * A bond or surety was required from merchant ships on a voyage between US ports.
 * Warships were exempted from the embargo provisions.

The shipping embargo was a cumulative addition to the Non-importation Act of 1806 (2 Stat. 379), which was a "Prohibition of the Importation of certain Goods and Merchandise from the Kingdom of Great Britain," the prohibited imported goods being defined where their chief value, which consists of leather, silk, hemp or flax, tin or brass, wool, glass, and paper goods, nails, hats, clothing, and beer.

The Embargo Act of 1807 was codified at 2 Stat. 451 and formally titled "An Embargo laid on Ships and Vessels in the Ports and Harbours of the United States". The bill was drafted at the request of President Thomas Jefferson and was passed by the 10th Congress on December 22, 1807, during Session 1; Chapter 5. Congress initially acted to enforce a bill prohibiting only imports, but supplements to the bill eventually banned exports as well.

Impact on US trade

The embargo had the dual effect of severely curtailing American overseas trade, while forcing industrial concerns to invest new capital into domestic manufacturing in the United States. In commercial New England and the Middle Atlantic, ships sat idle. In agricultural areas, particularly the South, farmers and planters could not sell crops internationally. The scarcity of European goods stimulated American manufacturing, particularly in the North, and textile manufacturers began to make massive investments in cotton mills. However, as Britain still able to export to America particularly through Canada, that benefit did not immediately compensate for present loss of trade and economic momentum. A 2005 study by the economic historian Douglas Irwin estimates that the embargo cost about 5% of America's 1807 gross national product.

Miniature engraved teapots were manufactured to bolster flagging popular support for the Embargo Act. The slogans on the teapots were intended to reinforce the principles driving the government's ongoing embargo against Britain and France.

Case studies
A case study of Rhode Island shows the embargo to have devastated shipping-related industries, wrecked existing markets, and caused an increase in opposition to the Democratic–Republican Party. Smuggling was widely endorsed by the public, which viewed the embargo as a violation of its rights. Public outcry continued and helped the Federalists regain control of the state government in 1808–1809. The case is a rare example of American national foreign policy altering local patterns of political allegiance.

Despite its unpopular nature, the Embargo Act had some limited unintended benefits to the Northeast, especially by driving capital and labor into New England textile and other manufacturing industries, which lessened America's reliance on British trade.

In Vermont, the embargo was doomed to failure on the Lake Champlain–Richeleiu River water route because of the state's dependence on a Canadian outlet for produce. At St. John, Lower Canada, £140,000 worth of goods smuggled by water were recorded there in 1808, a 31% increase over 1807. Shipments of ashes to make soap nearly doubled to £54,000, but those of lumber dropped by 23% to £11,200. Manufactured goods, which had expanded to £50,000 since Jay's Treaty in 1795, fell by over 20%, especially articles made near tidewater. Newspapers and manuscripts recorded more lake activity than usual, despite the theoretical reduction in shipping that should accompany an embargo. The smuggling was not restricted to water routes, as herds were readily driven across the uncontrollable land border. Southbound commerce gained two thirds overall, but furs dropped a third. Customs officials maintained a stance of vigorous enforcement throughout, and Gallatin's Enforcement Act (1809) was a party issue. Many Vermonters preferred the embargo's exciting game of revenuers versus smugglers, which brought high profits, versus mundane, low-profit normal trade.

The New England merchants who evaded the embargo were imaginative, daring, and versatile in their violation of federal law. Gordinier (2001) examines how the merchants of New London, Connecticut, organized and managed the cargoes purchased and sold and the vessels that were used during the years before, during, and after the embargo. Trade routes and cargoes, both foreign and domestic, along with the vessel types, and the ways that their ownership and management were organized show the merchants of southeastern Connecticut evinced versatility in the face of crisis.

Gordinier (2001) concludes that the versatile merchants sought alternative strategies for their commerce and, to a lesser extent, for their navigation. They tried extralegal activities, a reduction in the size of the foreign fleet, and the redocumentation of foreign trading vessels into domestic carriage. Most importantly, they sought new domestic trading partners and took advantage of the political power of Jedidiah Huntington, the Customs Collector. Huntington was an influential member of the Connecticut leadership class (called "the Standing Order") and allowed scores of embargoed vessels to depart for foreign ports under the guise of "special permission". Old modes of sharing vessel ownership to share the risk proved to be difficult to modify. Instead, established relationships continued through the embargo crisis despite numerous bankruptcies.

Enforcement efforts
Jefferson's Secretary of the Treasury, Albert Gallatin, was against the entire embargo and foresaw correctly the impossibility of enforcing the policy and the negative public reaction. "As to the hope that it may... induce England to treat us better," wrote Gallatin to Jefferson shortly after the bill had become law, "I think is entirely groundless... government prohibitions do always more mischief than had been calculated; and it is not without much hesitation that a statesman should hazard to regulate the concerns of individuals as if he could do it better than themselves."

Since the bill hindered US ships from leaving American ports bound for foreign trade, it had the side effect of hindering American exploration.

First supplementary act
Just weeks later, on January 8, 1808, legislation again passed the 10th Congress, Session 1; Chapter 8: "An Act supplementary..." to the Embargo Act (2 Stat. 453). As the historian Forrest McDonald wrote, "A loophole had been discovered" in the initial enactment, "namely that coasting vessels, and fishing and whaling boats" had been exempt from the embargo, and they had been circumventing it, primarily via Canada. The supplementary act extended the bonding provision (Section 2 of the initial Embargo Act) to those of purely-domestic trades:

 * Sections 1 and 2 of the supplementary act required bonding to coasting, fishing, and whaling ships and vessels. Even river boats had to post a bond.
 * Section 3 made violations of either the initial or supplementary act an offense. Failure of the shipowner to comply would result in forfeiture of the ship and its cargo or a fine of double that value and the denial of credit for use in custom duties. A captain failing to comply would be fined between one and twenty thousand dollars and would forfeit the ability to swear an oath before any customs officer.
 * Section 4 removed the warship exemption from applying to privateers or vessels with a letter of marque.
 * Section 5 established a fine for foreign ships loading merchandise for export and allowed for its seizure.

Meanwhile, Jefferson requested authorization from Congress to raise 30,000 troops from the current standing army of 2,800, but Congress refused. With their harbors for the most part unusable in the winter anyway, New England and the northern ports of the mid-Atlantic states had paid little notice to the previous embargo acts. That was to change with the spring thaw and the passing of yet another embargo act.

With the coming of the spring, the effect of the previous acts were immediately felt throughout the coastal states, especially in New England. An economic downturn turned into a depression and caused increasing unemployment. Protests occurred up and down the eastern coast. Most merchants and shippers simply ignored the laws. On the Canada–United States border, especially in Upstate New York and in Vermont, the embargo laws were openly flouted. Federal officials believed parts of Maine, such as Passamaquoddy Bay on the border with the British territory of New Brunswick, were in open rebellion. By March, an increasingly-frustrated Jefferson had become resolved to enforce the embargo to the letter.

Other supplements to Act
On March 12, 1808, Congress passed and Jefferson signed into law yet another supplement to the Embargo Act. It prohibited for the first time all exports of any goods, whether by land or by sea. Violators were subject to a fine of $10,000, plus forfeiture of goods, per offense. It granted the President broad discretionary authority to enforce, deny, or grant exceptions to the embargo. Port authorities were authorized to seize cargoes without a warrant and to try any shipper or merchant who was thought to have merely contemplated violating the embargo.

Despite the added penalties, citizens and shippers openly ignored the embargo. Protests continued to grow and so the Jefferson administration requested and Congress rendered yet another embargo act.

Consequences

The immediate effect of the embargo hurt the United States as much as it did Britain and France. Britain, expecting to suffer most from the American regulations, built up a new South American market for its exports, and the British shipowners were pleased that American competition had been removed by the action of the US government.

Jefferson placed himself in a strange position with his embargo policy. Though he had frequently argued for as little government intervention as possible, he now found himself assuming extraordinary powers in an attempt to enforce his policy. The presidential election of 1808 had James Madison defeat Charles Cotesworth Pinckney but showed that the Federalists were regaining strength and helped to convince Jefferson and Madison that the embargo should end. Shortly before leaving office in March 1809, Jefferson signed the repeal of the embargo.

Despite its unpopular nature, the Embargo Act had one longterm positive impact. Unfulfilled domestic demand for manufactured goods stimulated the growth of the Industrial Revolution in the United States, resulting in an emerging American domestic manufacturing system.

Repeal
On March 1, 1809, Congress passed the Non-Intercourse Act. The law enabled the President, once the wars of Europe had ended, to declare the country sufficiently safe and to allow foreign trade with certain nations.

In 1810, the government was ready to try yet another tactic of economic coercion, the desperate measure known as Macon's Bill Number 2. The bill became law on May 1, 1810, and replaced the Non-Intercourse Act. It was an acknowledgment of the failure of economic pressure to coerce the European powers. Trade with both Britain and France was now thrown open, and the US attempted to bargain with the two belligerents. If either power removed its restrictions on American commerce, the US would reapply non-intercourse against the power that had not done so.

Napoleon quickly took advantage of that opportunity. He promised that his Berlin and Milan Decrees would be repealed, and Madison reinstated non-intercourse against Britain in the fall of 1810. Though Napoleon did not fulfill his promise, the strained Anglo-American relations prevented him from being brought to task for his duplicity.

The attempts of Jefferson and Madison to secure recognition of American neutrality via peaceful means gained a belated success in June 1812, when Britain finally promised to repeal their 1807 Orders in Council. The British concession was too late since when the news had reached America, the United States had already declared the War of 1812 against Britain.

Subsequent Wartime legislation
America's declaration of war in mid-June 1812 was followed shortly by the Enemy Trade Act of 1812 on July 6, which employed similar restrictions as previous legislation. it was likewise ineffective and tightened in December 1813 and debated for further tightening in December 1814. After existing embargoes expired with the onset of war, the Embargo Act of 1813 was signed into law December 17, 1813. Four new restrictions were included: an embargo prohibiting all American ships and goods from leaving port, a complete ban on certain commodities customarily produced in the British Empire, a ban against foreign ships trading in American ports unless 75% of the crew were citizens of the ship's flag, and a ban on ransoming ships. The Embargo of 1813 was the nation's last great trade restriction. Never again would the US government cut off all trade to achieve a foreign policy objective. The Act particularly hurt the Northeast since the British kept a tighter blockade on the South and thus encouraged American opposition to the administration. To make his point, the Act was not lifted by Madison until after the defeat of Napoleon, and the point was moot.

On February 15, 1815, Madison signed the Enemy Trade Act of 1815, which was tighter than any previous trade restriction including the Enforcement Act of 1809 (January 9) and the Embargo of 1813, but it would expire two weeks later when official word of peace from Ghent was received.

title: Embargo Act of 1807


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Act Prohibiting Importation of Slaves

The Act Prohibiting Importation of Slaves of 1807 (, enacted March 2, 1807) is a United States federal law that prohibited the importation of slaves into the United States. It took effect on January 1, 1808, the earliest date permitted by the United States Constitution.

This legislation was promoted by President Thomas Jefferson, who called for its enactment in his 1806 State of the Union Address. He and others had promoted the idea since the 1770s. It reflected the force of the general trend toward abolishing the international slave trade, which Virginia, followed by all the other states, had prohibited or restricted since then. South Carolina, however, had reopened its trade. Congress first regulated against the trade in the Slave Trade Act of 1794. The 1794 Act ended the legality of American ships participating in the trade. The 1807 law did not change that—it made all importation from abroad, even on foreign ships, a federal crime.

The domestic slave trade within the United States was not affected by the 1807 law. Indeed, with the legal supply of imported slaves terminated, the domestic trade increased in importance. In addition, some smuggling of slaves persisted.

Background
The Act affected only the import or export of slaves, and did not affect the internal trade in states or between states. During the American Revolution, all of the Thirteen Colonies prohibited their involvement in the international slave trade (some also internally abolished slavery), but three states later reopened the international slave trade again (North Carolina banned slave imports in 1794, and strengthened the law in 1795. Georgia received transatlantic slave ships until 1798. South Carolina reopened the transatlantic slave trade in December 1803 and imported 39,075 enslaved people of African descent between 1804 and 1808 ). Article 1 Section 9 of the United States Constitution protected a state's involvement in the Atlantic slave trade for twenty years from federal prohibition. Article 5 said that this clause could not be affected by constitutional amendment. Only starting on January 1, 1808, could there be a federal law to abolish the international slave trade in all states, although individual states could and did ban it before such time. "The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person."

By 1775, Africans both free and enslaved made up 20% of the population in the Thirteen Colonies, which made them the second-largest ethnic group after English Americans. In 1774, the influential, revolutionary Fairfax Resolves, called for an end to the "wicked, cruel, and unnatural" Atlantic slave trade. During the Revolutionary War, the United Colonies all pledged to ban their involvement in the transatlantic slave trade. This was done for a variety of economic, political, and moral reasons depending on the colony. After the American victory in 1783, South Carolina reopened its involvement in the slave trade until prohibiting it again in 1787, but then reopened it in 1803; while North Carolina allowed the trade beginning after the Treaty of Paris (1783) until abolishing its involvement in slave trading in 1794; and Georgia allowed the slave trade between 1783, until it closed its international trade in 1798. By 1807, only South Carolina allowed the Atlantic slave trade.

On March 22, 1794, Congress passed the Slave Trade Act of 1794, which prohibited making, loading, outfitting, equipping or dispatching of any ship to be used in the trade of slaves, essentially limiting the trade to foreign ships. On August 5, 1797, John Brown of Providence, Rhode Island became the first American to be tried in federal court under the 1794 law. Brown was convicted and was forced to forfeit his ship Hope. In the 1798 act creating the Mississippi Territory, Congress allowed slaves to be transferred from the rest of the United States to Mississippi Territory, and exempted the territory from the part of the 1787 Northwest Ordinance that abolished slavery in the Northwest Territory (modern-day Midwest) after 1800. However, the same act also abolished the importation of slaves to the Mississippi Territory from "foreign parts" (foreign nations). The penalty for illegally importing slaves from abroad to the territory was a fine of $300. In the Slave Trade Act of 1800, Congress outlawed U.S. citizens' investment in the trade and the employment of U.S. citizens on ships involved in the trade.

Passage of the Act
On March 3, 1805, Joseph Bradley Varnum submitted a Massachusetts Proposition to amend the Constitution and Abolish the Slave Trade. This proposition was tabled until 1807.

On December 2, 1806, in his annual message to Congress, widely reprinted in most newspapers, President Thomas Jefferson denounced the "violations of human rights." He said:

"I congratulate you, fellow-citizens, on the approach of the period at which you may interpose your authority constitutionally, to withdraw the citizens of the United States from all further participation in those violations of human rights which have been so long continued on the unoffending inhabitants of Africa, and which the morality, the reputation, and the best interests of our country, have long been eager to proscribe."

Under Varnum's leadership, legislation moved through Congress and passed both houses on March 2, 1807. The House and Senate agreed on a bill, approved on March 2, 1807, called An Act to prohibit the importation of slaves into any port or place within the jurisdiction of the United States, from and after the first day of January, in the year of our Lord, One Thousand Eight Hundred and Eight. The measure also regulated the coastwise slave trade. President Thomas Jefferson signed the bill into law on March 2, 1807. Many in Congress believed the act would doom slavery in the South, but they were mistaken.

The role of the Navy was expanded to include patrols off the coasts of Cuba and South America. The effective date of the Act, January 1, 1808, was celebrated by Peter Williams, Jr., in "An Oration on the Abolition of the Slave Trade" delivered in New York City.

Effectiveness and prosecutions for slaving
While there are no exact figures known, historians estimate that up to 50,000 slaves were illegally imported into the United States after 1808, mostly through Spanish Florida and Texas, before those states were admitted to the Union. However, South Carolina Governor Henry Middleton estimated in 1819 that 13,000 smuggled African slaves arrived every year.

Carl C. Cutler's classic book on American clippers records: "The act outlawing the slave trade in 1808 furnished another source of demand for fast vessels, and for another half century ships continued to be fitted out and financed in this trade by many a respectable citizen in the majority of American ports. Newspapers of the fifties contain occasional references to the number of ships sailing from the various cities in this traffic. One account stated that as late as 1859 there were seven slavers regularly fitted out in New York, and many more in all the larger ports."

In 1820, slave trading became a capital offense with an amendment to the 1819 Act to Protect the Commerce of the United States and Punish the Crime of Piracy. A total of 74 cases of slaving were brought in the United States between 1837 and 1860, "but few captains had been convicted, and those had received trifling sentences, which they had usually been able to avoid". Nathaniel Gordon, who was hanged in 1862, was the only person to be executed for illegal slave-trading in the United States.

In addition, after the 1808 abolition of the slave trade to the United States, many Americans continued to engage in the slave trade by transporting Africans to Cuba. From 1808 to 1860, almost one-third of all slave ships either were owned by American merchants or were built and outfitted in American ports. It is possible that U.S. citizens "may have transported twice as many Africans to other countries such as Cuba and Brazil as they did to their own ports".

The U.S. Navy was slow to institute anti-slaving patrols off the slave ports of Africa—it was not until the 1820 legislation that authority was given to the president to use naval vessels for this task. Even then, enforcement activity was sporadic and largely ineffective. The U.S. position meant that many slave ships from other countries falsely flew the American flag to avoid being seized by British anti-slaving patrols. The first U.S. warship sent to the African coast to intercept U.S. vessels operating in the illegal trade was the USS Cyane. A total of five U.S. Navy ships were on station there in 1820 and 1821, arresting 11 American slavers. No further U.S. anti-slaving patrols were carried out until 1842, and then with limited effectiveness due to political pressure from the slave-owning states. The Atlantic slave trade was not ended until the U.S. Civil War, when American-built and -managed ships were prevented from operating.

Antebellum proposals by Fire-Eaters to reopen
In the South, the Fire-Eaters—antebellum pro-slavery extremists—proposed repealing the act and once more legalizing the international slave trade in the United States. Historian Erskine Clarke writes that this call "was a shameless expression of their contempt for any antislavery sentiment and a part of their stratagem to divide the nation and create a slaveholding confederacy. Among other things, the Fire-Eaters hoped that a reopened international slave trade would incense the North, and that Northern outrage would cause white Southerns to unite and move toward secession."

In addition to whipping up sectional tensions, Fire-Eaters advocated the reopening of the slave trade in order to drive down the price of slaves; to balance the millions of European immigrants who had settled in the North and maintain Southern representation in Congress; and assert the morality of slavery: "Slave trading had to be made right, otherwise slavery was imperiled." Fire-Eaters essentially desired to "legitimize the slave trade in order to make the point that both slavery and the African slave trade were morally acceptable practices"—a view intended to be precisely opposite that of the abolitionists, who affirmed the immorality of both slavery and the slave trade. The view alarmed even pro-slavery figures, such as former President John Tyler, who in retirement wrote a widely republished letter condemning the Fire-Eaters' call to abrogate Article 8 of the Webster–Ashburton Treaty (which barred the slave trade). Tyler noted that the South had voted to ratify the treaty.

Slavery and the cotton economy boomed during the 1850s, and cotton prices were resurgent after a decline in the 1840s. This, in turn, drove up the price of slaves, which led to further pressure to re-open the slave trade to meet demand or bring down prices. Not all Southerners felt this way, however, as the high price of slaves benefitted slave owners and slave merchants. But the general sentiment called for a re-opening of the trade as a logical extension of the support for slavery. Southerners reasoned that, if slavery was good, then putting more people into slavery must also be good, and that, if trading slaves in the South was okay, then trading them from Africa must also be okay. Conventions of Southern planters repeatedly called for the trade to re-open. This, of course, was a non-starter in Congress. There were also attempts from state legislatures to allow the importation of "apprentices" from Africa, but without success. When trying to repeal the slave act failed, some turned to simply ignoring it. Notable cases during the 1850s included slaves smuggled aboard the Wanderer and the Clotilda.

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/

title: Act Prohibiting Importation of Slaves


text:
Non-Intercourse Act (1809)

The Non-Intercourse Act of March 1809 lifted all embargoes on American shipping except for those bound for British or French ports.

Enacted in the last sixteen days of President Thomas Jefferson's presidency by the 10th Congress to replace the Embargo Act of 1807, the almost unenforceable law’s intent was to damage the economies of the United Kingdom and France. Like its predecessor, the Embargo Act, it was mostly ineffective, and contributed to the coming of the War of 1812. In addition, it seriously damaged the economy of the United States. The Non-Intercourse Act was followed by Macon's Bill Number 2. Despite hurting the economy as a whole, the bill’s prohibition on British manufactured goods stimulated domestic production and helped America begin to industrialize.

title: Non-Intercourse Act (1809)


text:
Macon's Bill Number 2

Macon's Bill Number 2, which became law in the United States on May 14, 1810, was intended to motivate Great Britain and France to stop seizing American ships, cargoes, and crews during the Napoleonic Wars. This was a revision of the original bill by Representative Nathaniel Macon, known as Macon's Bill Number 1. Macon's Bill Number 2 was the fourth in a series of embargo measures, coming after the Non-Importation Act, the Embargo Act, and the Non-Intercourse Act (1809). Macon neither wrote the bill nor approved it.

The law lifted all embargoes with Britain and France for three months. It stated that if either belligerent ceased disrupting American shipping, the United States would embargo the other, unless that other country also agreed to cease disrupting American shipping.

Napoleon successfully exploited the bill to further his Continental System, effectively a French embargo on Britain that France tried to enforce on continental Europe, and to damage British-American relations. A message was sent to the United States, purporting to agree to the law's demand. President James Madison, a staunch opponent of the bill, had little choice but to accept Napoleon's ostensibly sincere offer. However, as Madison suspected, Napoleon's purpose was manipulative. When Britain threatened force against the United States in response, Napoleon reneged anyway, having achieved his goal of pushing the United States and Britain closer to the eventual War of 1812.

title: Macon's Bill Number 2


text:
Second Bank of the United States

The Second Bank of the United States was the second federally authorized Hamiltonian national bank in the United States. Located in Philadelphia, Pennsylvania, the bank was chartered from February 1816 to January 1836. The bank's formal name, according to section 9 of its charter as passed by Congress, was "The President, Directors, and Company, of the Bank of the United States". While other banks in the US were chartered by and only allowed to have branches in a single state, it was authorized to have branches in multiple states and lend money to the US government.

A private corporation with public duties, the bank handled all fiscal transactions for the U.S. government, and was accountable to Congress and the U.S. Treasury. Twenty percent of its capital was owned by the federal government, the bank's single largest stockholder. Four thousand private investors held 80 percent of the bank's capital, including three thousand Europeans. The bulk of the stocks were held by a few hundred wealthy Americans. In its time, the institution was the largest monied corporation in the world.

The essential function of the bank was to regulate the public credit issued by private banking institutions through the fiscal duties it performed for the U.S. Treasury, and to establish a sound and stable national currency. The federal deposits endowed the bank with its regulatory capacity.

Modeled on Alexander Hamilton's First Bank of the United States, the Second Bank was chartered by President James Madison, who in 1791 had attacked the First Bank as unconstitutional, in 1816 and began operations at its main branch in Philadelphia on January 7, 1817, managing 25 branch offices nationwide by 1832.

The efforts to renew the bank's charter put the institution at the center of the general election of 1832, in which the bank's president Nicholas Biddle and pro-bank National Republicans led by Henry Clay clashed with the "hard-money" Andrew Jackson administration and eastern banking interests in the Bank War. Failing to secure recharter, the Second Bank became a private corporation in 1836, and underwent liquidation in 1841. There would not be national banks again until the passage of the National Bank Act.

Establishment
The political support for the revival of a national banking system was rooted in the early 19th century transformation of the country from simple Jeffersonian agrarianism towards one interdependent with industrialization and finance. In the aftermath of the War of 1812, the federal government suffered from the disarray of an unregulated currency and a lack of fiscal order; business interests sought security for their government bonds. A national alliance arose to legislate a national bank to address these needs.

The political climate —dubbed the Era of Good Feelings —favored the development of national programs and institutions, including a protective tariff, internal improvements and the revival of a Bank of the United States. Southern and western support for a bank, led by Republican nationalists John C. Calhoun of South Carolina and Henry Clay of Kentucky, was decisive in the successful chartering effort. The charter was signed into law by James Madison on April 10, 1816. Subsequent efforts by Calhoun and Clay to earmark the bank's $1.5 million establishment "bonus", and annual dividends estimated at $650,000, as a fund for internal improvements, were vetoed by President Madison, on strict constructionist grounds.

Opposition to a new bank emanated from two interests. Old Republicans, represented by John Taylor of Caroline and John Randolph of Roanoke, characterized the Second Bank as both constitutionally illegitimate and a direct threat to Jeffersonian agrarianism, state sovereignty and the institution of slavery, expressed by Taylor's statement that "...if Congress could incorporate a bank, it might emancipate a slave." Hostile to the regulatory effects of the national bank, private banks—proliferating with or without state charters —had scuttled rechartering of the First Bank in 1811. These interests played significant roles in undermining the institution during the administration of U.S. President Andrew Jackson (1829–1837).

Economic functions
The Second Bank was a national bank. However, it did not serve the functions of a modern central bank: It did not set monetary policy, regulate private banks, hold their excess reserves, or act as a lender of last resort.

The bank was launched in the midst of a major global market readjustment as Europe recovered from the Napoleonic Wars. It was charged with restraining uninhibited private bank note issue—already in progress —that threatened to create a credit bubble and the risks of a financial collapse. Government land sales in the West, fueled by European demand for agricultural products, ensured that a speculative bubble would form. Simultaneously, the national bank was engaged in promoting a democratized expansion of credit to accommodate laissez-faire impulses among eastern business entrepreneurs and credit-hungry western and southern farmers.

Under the management of its first president William Jones, the bank failed to control paper money issued from its branch banks in the West and South, contributing to the post-war speculative land boom. When the U.S. markets collapsed in the Panic of 1819—a result of global economic adjustments —the bank came under withering criticism for its belated tight money policies—policies that exacerbated mass unemployment and plunging property values. Further, it transpired that branch directors for the Baltimore office had engaged in fraud and larceny.

Resigning in January 1819, Jones was replaced by Langdon Cheves, who continued the contraction in credit in an effort to stop inflation and stabilize the bank, even as the economy began to correct. The bank's reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a protracted recession with mass unemployment and a sharp drop in property values that persisted until 1822. The financial crisis raised doubts among the American public as to the efficacy of paper money, and in whose interests a national system of finance operated. Upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the bank in the 1830s. The bank was in general disrepute among most Americans when Nicholas Biddle, the third and last president of the bank, was appointed by President James Monroe in 1823.

Under Biddle's guidance, the bank evolved into a powerful institution that produced a strong and sound system of national credit and currency. From 1823 to 1833, Biddle expanded credit steadily, but with restraint, in a manner that served the needs of the expanding American economy. Albert Gallatin, former Secretary of the Treasury under Thomas Jefferson and James Madison, wrote in 1831 that the bank was fulfilling its charter expectations.

Jackson's Bank War
By the time of Jackson's inauguration in 1829, the bank appeared to be on solid footing. The Supreme Court had affirmed its constitutionality in McCulloch v. Maryland, the 1819 case which Daniel Webster had argued successfully on its behalf a decade earlier, the Treasury recognized the useful services it provided, and the American currency was healthy and stable. Public perceptions of the national bank were generally positive. The bank first came under attack by the Jackson administration in December 1829, on the grounds that it had failed to produce a stable national currency, and that it lacked constitutional legitimacy. Both houses of Congress responded with committee investigations and reports affirming the historical precedents for the bank's constitutionality and its pivotal role in furnishing a uniform currency. Jackson rejected these findings, and privately characterized the bank as a corrupt institution, dangerous to American liberties.

Biddle made repeated overtures to Jackson and his cabinet to secure a compromise on the bank's rechartering (its term due to expire in 1836) without success. Jackson and the anti-bank forces persisted in their condemnation of the bank, provoking an early recharter campaign by pro-bank National Republicans under Henry Clay. Clay's political ultimatum to Jackson —with Biddle's financial and political support —sparked the Bank War and placed the fate of the bank at center of the 1832 presidential election.

Jackson mobilized his political base by vetoing the recharter bill and, the veto sustained, easily won reelection on his anti-bank platform. Jackson proceeded to destroy the bank as a financial and political force by removing its federal deposits,  and in 1833, federal revenue was diverted into selected private banks by executive order, ending the regulatory role of the Second Bank.

In hopes of extorting a rescue of the bank, Biddle induced a short-lived financial crisis that was initially blamed on Jackson's executive action. By 1834, a general backlash against Biddle's tactics developed, ending the panic, and all recharter efforts were abandoned.

State bank
In February 1836, the bank became a private corporation under Pennsylvania law. A shortage of hard currency ensued, causing the Panic of 1837 and lasting approximately seven years. The bank suspended payment from October 1839 to January 1841, and permanently in February 1841. It then started a lengthy liquidation process, complicated by lawsuits, that ended in 1852 when it assigned its remaining assets to trustees and surrendered the state charter.

Branches
The bank maintained the following branches. Listed is the year each branch opened.

 * Augusta, Georgia (1817, closed 1817)
 * Baltimore, Maryland (1817)
 * Boston, Massachusetts (1817)
 * Charleston, South Carolina (1817)
 * Chillicothe, Ohio (1817)
 * Cincinnati, Ohio (1817)
 * Fayetteville, North Carolina (1817)
 * Lexington, Kentucky (1817)
 * Louisville, Kentucky (1817)

 * Middletown, Connecticut (1817)
 * New Orleans, Louisiana (1817)
 * New York City, New York (1817)
 * Norfolk, Virginia (1817)
 * Portsmouth, New Hampshire (1817)
 * Providence, Rhode Island (1817)
 * Richmond, Virginia (1817)
 * Savannah, Georgia (1817)
 * Washington, D.C. (1817)

 * Mobile, Alabama (1826)
 * Nashville, Tennessee (1827)
 * Portland, Maine (1828)
 * Buffalo, New York (1829)
 * St. Louis, Missouri (1829)
 * Burlington, Vermont (1830)
 * Utica, New York (1830)
 * Natchez, Mississippi (1830)

Presidents

 * William Jones, January 7, 1817 – January 25, 1819
 * James Fisher, January 25, 1819 – March 6, 1819 (Acting)
 * Langdon Cheves, March 6, 1819 – January 6, 1823
 * Nicholas Biddle, January 6, 1823 – March 1836
 * Matthew L. Bevan, March 1836 (named President of the Unchartered Public Corporation)
 * Nicholas Biddle, March 1836 – February 1839 (President of the Pennsylvania Corporation)
 * Thomas Dunlap, March 1839 – February 1841
 * William Drayton, 1841
 * James Robertson, 1841 – March 22, 1852

Terms of charter
The Second Bank was America's national bank, comparable to the Bank of England and the Bank of France, with one key distinction – the United States government owned one-fifth (20 percent) of its capital. Whereas other national banks of that era were wholly private, the Second Bank was more characteristic of a government bank.

Under its charter, the bank had a capital limit of $35 million, $7.5 million of which represented the government-owned share. It was required to remit a "bonus" payment of $1.5 million, payable in three installments, to the government for the privilege of using the public funds, interest free, in its private banking ventures. The institution was answerable for its performance to the U.S. Treasury and Congress and subject to Treasury Department inspection.

As exclusive fiscal agent for the federal government, it provided a number of services as part of its charter, including holding and transfer of all U.S. deposits, payment and receipt of all government transactions, and processing of tax payments. In other words, the bank was "the depository of the federal government, which was its principal stockholder and customer."

The chief personnel for the bank comprised 25 directors, five of whom were appointed by the President of the United States, subject to Senate approval. Federally appointed directors were barred from acting as officials in other banks. Two of the three Bank presidents, William Jones and Nicholas Biddle, were chosen from among these government directors.

Headquartered in Philadelphia, the bank was authorized to establish branch offices where it deemed suitable, and these were immune from state taxation.

Regulatory mechanisms
The primary regulatory task of the Second Bank, as chartered by Congress in 1816, was to restrain the uninhibited proliferation of paper money (bank notes) by state or private lenders, which was highly profitable to these institutions. In this capacity, the bank would preside over this democratization of credit, contributing to a vast and profitable disbursement of bank loans to farmers, small manufacturers and entrepreneurs, encouraging rapid and healthy economic expansion. Historian Bray Hammond describes the mechanism by which the bank exerted its anti-inflationary influence:

"Receiving the checks and notes of local banks deposited with the [Bank] by government collectors of revenue, the [Bank] had constantly to come back on the local banks for settlements of the amounts which the checks and notes called for. It had to do so because it made those amounts immediately available to the Treasury, wherever desired. Since settlement by the local banks was in specie i.e. silver and gold coin, the pressure for settlement automatically regulated local banking lending: for the more the local banks lent the larger amount of their notes and checks in use and the larger the sums they had to settle in specie. This loss of specie reduced their power to lend."

Under this banking regime, the impulse towards over-speculation, with the risks of creating a national financial crisis, would be avoided, or at least mitigated. It was just this mechanism that the local private banks found objectionable, because it yoked their lending strategies to the fiscal operations of the national government, requiring them to maintain adequate gold and silver reserves to meet their debt obligations to the U.S. Treasury. The proliferation of private-sector banking institutions – from 31 banks in 1801 to 788 in 1837 – meant that the Second Bank faced strong opposition from this sector during the Jackson administration.

Architecture
The architect of the Second Bank was William Strickland (1788–1854), a former student of Benjamin Latrobe (1764–1820), the man who is often called the first professionally trained American architect. Latrobe and Strickland were both disciples of the Greek Revival style. Strickland went on to design many other American public buildings in this style, including financial structures such as the Mechanics National Bank (also in Philadelphia). He also designed the second building for the main U.S. Mint in Philadelphia in 1833, as well as the New Orleans, Dahlonega, and Charlotte branch mints in the mid-to-late 1830s.

Strickland's design for the Second Bank is in essence based on the Parthenon in Athens, and is a significant early and monumental example of Greek Revival architecture. The hallmarks of the Greek Revival style can be seen immediately in the north and south façades, which use a large set of steps leading up to the main level platform, known as the stylobate. On top of these, Strickland placed eight severe Doric columns, which are crowned by an entablature containing a triglyph frieze and simple triangular pediment. The building appears much as an ancient Greek temple, hence the stylistic name. The interior consists of an entrance hallway in the center of the north façade flanked by two rooms on either side. The entry leads into two central rooms, one after the other, that span the width of the structure east to west. The east and west sides of the first large room are each pierced by a large arched fan window. The building's exterior uses Pennsylvania blue marble, which, due to the manner in which it was cut, has begun to deteriorate due to weak parts of the stone being exposed to the elements. This phenomenon is most visible on the Doric columns of the south façade. Construction lasted from 1819 to 1824.

The Greek Revival style used for the Second Bank contrasts with the earlier, Federal style in architecture used for the First Bank of the United States, which also still stands and is located nearby in Philadelphia. This can be seen in the more Roman-influenced Federal structure's ornate, colossal Corinthian columns of its façade, which is also embellished by Corinthian pilasters and a symmetric arrangement of sash windows piercing the two stories of the façade. The roofline is also topped by a balustrade, and the heavy modillions adorning the pediment give the First Bank an appearance much more like a Roman villa than a Greek temple.

Current building use

Since the bank's closing in 1841, the edifice has performed a variety of functions. Today, it is part of Independence National Historical Park in Philadelphia. The structure is open to the public free of charge and serves as an art gallery, housing a large collection of portraits of prominent early Americans painted by Charles Willson Peale and many others.

The building was designated a National Historic Landmark in 1987 for its architectural and historic significance.

The Wall Street branch in New York City was converted into the United States Assay Office before it was demolished in 1915. The federal-style façade was saved and installed in the American Wing of the Metropolitan Museum of Art in 1924.

In popular culture
The Second Bank building was described by Charles Dickens in a chapter of his 1842 travelogue American Notes for General Circulation, Philadelphia, and its solitary prison: "We reached the city, late that night. Looking out of my chamber-window, before going to bed, I saw, on the opposite side of the way, a handsome building of white marble, which had a mournful ghost-like aspect, dreary to behold. I attributed this to the sombre influence of the night, and on rising in the morning looked out again, expecting to see its steps and portico thronged with groups of people passing in and out. The door was still tight shut, however; the same cold cheerless air prevailed: and the building looked as if the marble statue of Don Guzman could alone have any business to transact within its gloomy walls. I hastened to inquire its name and purpose, and then my surprise vanished. It was the Tomb of many fortunes; the Great Catacomb of investment; the memorable United States Bank."

"The stoppage of this bank, with all its ruinous consequences, had cast (as I was told on every side) a gloom on Philadelphia, under the depressing effect of which it yet laboured. It certainly did seem rather dull and out of spirits."

title: Second Bank of the United States


text:
First Bank of the United States

The President, Directors and Company of the Bank of the United States, commonly known as the First Bank of the United States, was a national bank, chartered for a term of twenty years, by the United States Congress on February 25, 1791. It followed the Bank of North America, the nation's first de facto national bank. However, neither served the functions of a modern central bank: They did not set monetary policy, regulate private banks, hold their excess reserves, or act as a lender of last resort. They were national insofar as they were allowed to have branches in multiple states and lend money to the US government. Other banks in the US were each chartered by, and only allowed to have branches in, a single state.

Establishment of the Bank of the United States was part of a three-part expansion of federal fiscal and monetary power, along with a federal mint and excise taxes, championed by Alexander Hamilton, first Secretary of the Treasury. Hamilton believed a national bank was necessary to stabilize and improve the nation's credit, and to improve handling of the financial business of the United States government under the newly enacted Constitution.

The First Bank building, located in Philadelphia, Pennsylvania, within Independence National Historical Park, was completed in 1797, and is a National Historic Landmark for its historic and architectural significance.

Background

Alexander Hamilton, first Secretary of the Treasury. In addition to the national bank, the other measures were an assumption of the state war debts by the U.S. government, establishment of a mint and imposition of a federal excise tax. The goals of Hamilton's three measures were to:
 * Establish financial order, clarity, and precedence in and of the newly formed United States.
 * Establish credit—both in a country and overseas—for the new nation.
 * Resolve the issue of the fiat currency, issued by the Continental Congress immediately prior to and during the American Revolutionary War—the "Continental".

In simpler words, Hamilton's four goals were to:
 * Have the Federal Government assume the Revolutionary War debts of the several states
 * Pay off the war debts
 * Raise money for the new government
 * Establish a national bank and create a common currency

Proposal
According to the plan put before the first session of the First Congress in 1790, Hamilton proposed establishing the initial funding for the First Bank of the United States through the sale of $10 million in stock of which the United States government would purchase the first $2 million in shares. Hamilton, foreseeing the objection that this could not be done since the U.S. government did not have $2 million, proposed that the government purchase the stock using money lent to it by the bank; the loan to be paid back in ten equal annual installments. The remaining $8 million of stock would be available to the public, both in the United States and overseas. The chief requirement of these non-government purchases was that one-quarter of the purchase price had to be paid in gold or silver; the remaining balance could be paid in bonds, acceptable scrip, etc.

Unlike the Bank of England, the primary function of the bank would be to issue credit to the government and private interests, for internal improvements and other economic development, per Hamilton's system of Public Credit. The business would be involved in on behalf of the federal government—a depository for collected taxes, making short-term loans to the government to cover real or potential temporary income gaps, serving as a holding site for both incoming and outgoing monies—was considered highly important but still secondary in nature.

There were other, non-negotiable conditions for the establishment of the First Bank of the United States. Among these were:
 * That the bank would have a twenty-year charter running from 1791 to 1811, after which time it would be up to the Congress to approve or deny renewal of the bank and its charter; however, during that time no other federal bank would be authorized; states, for their part, would be free to charter however many intrastate banks they wished.
 * That the bank, to avoid any appearance of impropriety, would:
 * be forbidden to buy a government bond.
 * have a mandatory rotation of directors.
 * neither issue notes nor incur debts beyond its actual capitalization.
 * That foreigners, whether overseas or residing in the United States, would be allowed to be First Bank of the United States stockholders, but would not be allowed to vote.
 * That the Secretary of the Treasury would be free to remove government deposits, inspect the books, and require statements regarding the bank's condition as frequently as once a week.

To ensure that the government could meet both the current and future demands of its governmental accounts, an additional source of funding was required, "for interest payments on the assumed state debts would begin to fall due at the end of 1791...those payments would require $788,333 annually, and... an additional $38,291 was needed to cover deficiencies in the funds that had been appropriated for existing commitments." To achieve this, Hamilton repeated a suggestion he had made nearly a year before—increase the duty on imported spirits, plus raise the excise tax on domestically distilled whiskey and other liquors. Local opposition to the tax led to the Whiskey Rebellion.

Opposition
Hamilton's bank proposal faced widespread resistance from opponents of increased federal power. Secretary of State Thomas Jefferson and James Madison led the opposition, which claimed that the bank was unconstitutional, and that it benefited merchants and investors at the expense of the majority of the population.

Like most of the Southern members of Congress, Jefferson and Madison also opposed a second of the three proposals of Hamilton: establishing an official government Mint. They believed this centralization of power away from local banks was dangerous to a sound monetary system and was mostly to the benefit of business interests in the commercial north, not southern agricultural interests, arguing that the right to own property would be infringed by these proposals. Furthermore, they contended that the creation of such a bank violated the Constitution, which specifically stated that Congress was to regulate weights and measures and issue coined money (rather than mint and bills of credit).

The first part of the bill, the concept, and establishment of a national mint, met with no real objection, and sailed through; it was assumed the second and third part (the bank and an excise tax to finance it) would likewise glide through, and in their own way they did: The House version of the bill, despite some heated objections, easily passed. The Senate version of the bill did likewise, with considerably fewer, and milder, objections. It was when "the two bills changed houses, complications set in. In the Senate, Hamilton's supporters objected to the House's alteration of the plans for the excise tax."

The establishment of the bank also raised early questions of constitutionality in the new government. Hamilton, then Secretary of the Treasury, argued that the bank was an effective means to utilize the authorized powers of the government implied under the law of the Constitution. Secretary of State Thomas Jefferson argued that the bank violated traditional property laws and that its relevance to constitutionally authorized powers was weak. Another argument came from James Madison, who believed Congress had not received the power to incorporate a bank or any other governmental agency. His argument rested primarily on the Tenth Amendment: that all powers not endowed to Congress are retained by the States (or the people). Additionally, his belief was that if the Constitution's writers had wanted Congress to have such power, they would have made it explicit. The decision would ultimately fall on President George Washington, following his deliberate investigation of the cabinet members' opinions.

Presidential approval
George Washington initially declared that he was hesitant to sign the "bank bill" into law. Washington asked for the written advice and supporting reasons from all his cabinet members—most particularly from Hamilton. Attorney General Edmund Randolph from Virginia felt that the bill was unconstitutional. Jefferson, also from Virginia, agreed that Hamilton's proposal was against both the spirit and letter of the Constitution. Hamilton, who, unlike his fellow cabinet members, came from New York, quickly responded to those who claimed incorporation of the bank unconstitutional. While Hamilton's rebuttals were many and varied, chief among them were these two:

 * What the government could do for a person (incorporate), it could not refuse to do for an "artificial person", a business. And the First Bank of the United States is privately owned and not a government agency, was a business. "Thus...unquestionably incident to sovereign power to erect corporations to that of the United States, in relation to the objects entrusted to the management of the government."
 * Any government by its very nature was sovereign "and includes by force of the term a right to attainment of the ends...which are not precluded by restrictions & exceptions specified in the constitution...

On February 25, 1791, convinced that the constitution authorized the measure, Washington signed the "bank bill" into law.

On March 19, 1791 Washington appointed three Commissioners for the taking of subscriptions for this new bank: Thomas Willing, David Rittenhouse, and Samuel Howell.

Willing was later elected as President on October 25, 1791, until he resigned due to ill health on November 10, 1807. The bank's Philadelphia branch opened its doors on December 12, 1791. Willing was succeeded by David Lenox, serving until the expiration of its charter on March 4, 1811.

Expiration of charter
After Hamilton left office in 1795, the new Secretary of the Treasury Oliver Wolcott Jr. informed Congress that, due to the existing state of government finances, more money was needed. This could be achieved either by selling the government's shares of stock in the bank or by raising taxes. Wolcott advised the first choice. Congress quickly agreed. Hamilton objected, believing that the dividends on that stock had been inviolably pledged for the support of the sinking fund to retire the debt. Hamilton tried to organize opposition to the measure but was unsuccessful.

In 1816, the bank was succeeded by the Second Bank of the United States.

Purchase by Girard
After the charter for the First Bank of the United States expired in 1811, Stephen Girard purchased most of its stock as well as the building and its furnishings on South Third Street in Philadelphia and opened his own bank, later known as Girard Bank. Girard hired George Simpson, the cashier of the First Bank of the United States, as cashier of the new bank, and with seven other employees, opened for business on May 18, 1812. He allowed the Trustees of the First Bank of the United States to use some offices and space in the vaults to continue the process of winding down the affairs of the closed bank at a nominal rent.

Over its early history the bank was known as "Girard's Bank," or as "Girard Bank" or also as "Stephen Girard's Bank" or even the "Bank of Stephen Girard." Girard was the sole proprietor of his bank, and thus avoided the Pennsylvania state law which prohibited an unincorporated association of persons from establishing a bank, and which required a charter from the legislature for a banking corporation.

Bank building
The First Bank of the United States was established in Philadelphia, Pennsylvania, while the city served as the national capital, from 1790 to 1800. The bank began operations in Carpenters' Hall in 1791, some 200 feet from its permanent home.

Design of the bank building is credited to Samuel Blodgett, Superintendent of Buildings for the new capital in Washington, DC., although it has also been attributed to James Hoban. It was completed in 1797 and was the first building specifically for the new federal government.

The First Bank of the United States has received various designations as a historic building. It was included in Independence National Historical Park when the park was formed in 1956. The building's architecture was studied by the Historic American Buildings Survey in 1958. With the rest of Independence National Historical Park, it was listed on the National Register of Historic Places on October 15, 1966, and the bank was then declared a National Historic Landmark on May 4, 1987. It is described in the landmark designation as an early masterpiece of monumental Classical Revival design.

The building has been closed to the public since the 1970s. Until about 2000, the building housed offices for Independence National Historical Park. A proposal to have it house the collection of the Philadelphia Civil War Museum was abandoned when funding from the state of Pennsylvania was not forthcoming.

In June 2023, Independence National Historical Park received $22 million from the Great American Outdoors Act to renovate the building and develop a museum about the early American economy, planned to open in 2026.

title: First Bank of the United States


text:
Bank of North America

The Bank of North America was the first chartered bank in the United States, and served as the country's first de facto central bank. Chartered by the Congress of the Confederation on May 26, 1781, and opened in Philadelphia on January 7, 1782.

The bank's founding was based on a plan presented by Superintendent of Finance Robert Morris on May 17, 1781, including recommendations by Revolutionary-era Founding Father Alexander Hamilton, who was appointed the first U.S. Secretary of the Treasury by George Washington. Although Hamilton later noted the bank's "essential" contribution to the American Revolutionary War, the Pennsylvania government objected to its privileges and reincorporated it under state law, making it unsuitable as a national bank under the U.S. Constitution. Congress instead chartered the First Bank of the United States, a new bank, in 1791, while the Bank of North America continued as a private concern.

Congressional charter
In May 1781, Alexander Hamilton revealed that he had recommended Robert Morris for the position of Superintendent of Finance of the United States the previous summer when the constitution of the Articles of Confederation-era executive was being solidified. He also proceeded to lay out a proposal for a national bank that would serve as a de facto central bank.

Morris corresponded with Hamilton previously on the subject of funding the war, and immediately drafted a legislative proposal based on Hamilton's suggestion and submitted it to the Congress. Morris persuaded Congress to charter the Bank of North America, the first private commercial bank in the United States. His friend, Dr. Hugh Shiell, paid £5000 to the capital stock.

Stock offering
The original charter as outlined by Hamilton called for the disbursement of 1,000 shares priced at $400 each. Benjamin Franklin purchased a single token share as a sign of good faith to Federalists and their new bank. Hamilton used his pseudonym "Publius", later immortalized in the Federalist Papers advocating in the late 1780s for adoption of the United States Constitution, to endorse the bank.

William Bingham, rumored to be the richest man in America after the Revolutionary War, purchased 9.5% of the available shares. The greatest share, however, 63.3%, was purchased on behalf of the United States government by Robert Morris, using a gift in the form of a loan from France and a loan from Netherlands. This had the effect of capitalizing the bank with large deposits of gold and silver coin and bills of exchange. He then issued new paper currency backed by this supply.

Officers
Thomas Willing, who served two terms as mayor of Philadelphia and was a partner with Morris in an import-export firm that once dominated the city's slave trade, was named the bank's first president. He held that office from 1781 to 1791, being succeeded by John Nixon, and moving immediately on to become the first president of the First Bank of the United States, a position he held from 1791 to 1807.

Banknotes
The bank issued its own notes that superseded the troubled Continental currency bills. These notes were printed on paper with colored fibers pressed into the reverse side as an anti-counterfeiting measure. Unlike the Continental bills, the new notes carried a promise to pay silver on demand. Despite these changes, the bank had difficulty at first persuading people of its good credit, and at one point it employed repossessors to follow people who redeemed notes and urge them to deposit the money back. To promote the impression that it had a large reserve, the bank made a show of moving cash boxes to and from its cellar. Once the stock was fully subscribed and paid, doubts subsided and the notes rose to par value. By 1783, several states including Massachusetts enacted legislation allowing Americans to pay taxes with Bank of North America notes, giving them a crucial aspect of legal tender.

Private bank
In the economic turmoil that followed the American Revolutionary War, the bank's strictness in collecting debts drew opposition from Pennsylvania residents, who petitioned the Pennsylvania General Assembly to revoke the state charter granted to it in 1782. The charter was revoked in 1785, although the bank continued to operate with difficulty under its congressional charter and then under a Delaware charter. The following year, the Pennsylvania General Assembly granted a new charter with several restrictions, including that it could not trade any merchandise other than bullion. The Bank of North America, First Bank of the United States, and Bank of New York were the first shares traded on the New York Stock Exchange.

After the passage of the National Bank Act in 1862, the Bank of North America converted its business to operate under the new law. Its unique history presented a problem: the act required a national bank to include the word "national" in its name. The bank's management considered its original name a matter of prestige and took the position that the name remained fixed by the Confederation and state charters. The Comptroller of the Currency chose not to press these legal questions and admitted the bank without a name change.

The bank merged in 1923 with the Commercial Trust Company to become the Bank of North America and Trust Company, which merged in 1929 with the Pennsylvania Company for Insurances on Lives and Granting Annuities. That company, operating as the Pennsylvania Company for Banking and Trust, merged with the First National Bank in 1955 to become The First Pennsylvania Banking and Trust Company, which was acquired by CoreStates Financial Corporation in 1991, by First Union/Wachovia in 1998, and by Wells Fargo in 2008.

title: Bank of North America


text:
Bonus Bill

Bonus Bill may refer to:

 * Bonus Bill of 1817, U.S. proposed legislation vetoed by President Madison
 * World War Adjusted Compensation Act, 1924 U.S. law
 * Adjusted Compensation Payment Act, 1936 U.S. law

title: Bonus Bill


text:
Tariff of Abominations

The Tariff of 1828 was a very high protective tariff that became law in the United States in May 1828. It was a bill designed to fail in Congress because it was seen by free trade supporters as hurting both industry and farming, but it passed anyway. The bill was vehemently denounced in the South and escalated to a threat of civil war in the Nullification Crisis of 1832–33. The tariff was replaced in 1833, and the crisis ended. It was called the "Tariff of Abominations" by its Southern detractors because of the effects it had on the Southern economy. It set a 38% tax on some imported goods and a 45% tax on certain imported raw materials.

The manufacturing-based economy in the Northeastern states was suffering from low-priced imported manufactured items from Britain. The major goal of the tariff was to protect the factories by taxing imports from Europe. Southerners from the Cotton Belt, particularly those from South Carolina, felt they were harmed directly by having to pay more for imports from Europe. Allegedly, the South was also harmed indirectly because reducing exports of British goods to the U.S would make it difficult for the British to pay for Southern cotton. The reaction in the South, particularly in South Carolina, led to the Nullification Crisis.

Background
The 1828 tariff was part of a series of tariffs that began after the War of 1812 and the Napoleonic Wars, when the blockade of Europe led British manufacturers to offer goods in America at low prices that American manufacturers often could not match. The first protective tariff was passed by Congress in 1816, and its rates were increased in 1824. Southern states such as South Carolina contended that the tariff was unconstitutional and were opposed to the newer protectionist tariffs, as they would have to pay, but Northern states favored them because they helped strengthen their industrial-based economy.

In an elaborate scheme to prevent passage of still higher tariffs, while at the same time appealing to Andrew Jackson's supporters in the North, John C. Calhoun and other Southerners joined Martin Van Buren in crafting a tariff bill that would also weigh heavily on materials imported by the New England states. It was believed that President John Quincy Adams's supporters in New England would uniformly oppose the bill for this reason and that the Southern legislators could then withdraw their support, killing the legislation while blaming it on New England. The goal was to write a bill so bad—so "abominable"—that it would never pass but would help Van Buren and the Southerners while hurting the Adams-Clay coalition.

Bill passage
The House committee drafted a bill that imposed very high duties on raw materials, including iron, hemp (for rope) and flax, but eliminated the protective features on woolen goods. The alliance organized by Van Buren that included the middle states and the south voted down every attempt by New Englanders to amend the bill. The alliance was confident the bill was so unfavorable that it would be defeated in Congress, hurting Adams and Clay in the process. To the astonishment of the alliance, a substantial minority of New England voted for the final bill, on the grounds that the principle of protection was of enormous value. The bill passed the house 105 to 94 on April 23 and passed the Senate 26 to 21 on May 13. President Adams signed it and the tariff became law. Adams became a hated man in the South.

Farmers in Western states and manufacturers in the Mid-Atlantic states argued that the strengthening of the nation was in the interest of the entire country. This same reasoning swayed two-fifths of U.S. Representatives in the New England states to vote for the tariff increase. In 1824, New England was on the verge of bankruptcy due to the influx of the use of European cloth. New England was in favor of the tariff increase for entering goods from Europe to aid in the country's economic success.

A substantial minority of New England Congressmen (41%) saw what they believed to be long-term national benefits of an increased tariff, and voted for it; they believed the tariff would strengthen the manufacturing industry nationally (see table).

The Democratic Party had miscalculated: despite the insertion by Democrats of import duties calculated to be unpalatable to New England industries, most specifically on raw wool imports, essential to the wool textile industry, the New Englanders failed to sink the legislation, and the Southerners' plan backfired.

The 1828 tariff was signed by President Adams, although he realized it could weaken him politically. In the presidential election of 1828, Andrew Jackson defeated Adams with a popular tally of 642,553 votes and an electoral count of 178 as opposed to Adams's 500,897 tally and 83 electoral votes.

Effects of the tariff in 1828
Vice President John C. Calhoun of South Carolina strongly opposed the tariff, anonymously authoring a pamphlet in December 1828 titled the South Carolina Exposition and Protest, in which he urged nullification of the tariff within South Carolina. The South Carolina legislature, although it printed and distributed 5,000 copies of the pamphlet, took none of the legislative action that the pamphlet urged.

The expectation of the tariff's opponents was that with the election of Jackson in 1828, the tariff would be significantly reduced. Jackson in 1829 said the 1828 tariff was constitutional. In response the most radical faction in South Carolina began to advocate that the state itself declare the tariff null and void within South Carolina.

In Washington, an open split on the issue occurred between Jackson and Vice-President Calhoun. On July 14, 1832, Jackson signed into law the Tariff of 1832 which made some reductions in tariff rates. Calhoun finally resigned.

The reductions were too little for South Carolina—the "abominations" of 1828 were still there. In November 1832 the state called for a convention. By a vote of 136 to 26, the convention overwhelmingly adopted an ordinance of nullification drawn by Chancellor William Harper. It declared that the tariffs of both 1828 and 1832 were unconstitutional and unenforceable in South Carolina. President Jackson could not tolerate the nullification of a federal law by a state. He threatened war and South Carolina backed down. The Nullification Crisis would be resolved with the Tariff of 1833, a compromise.

title: Tariff of Abominations


text:
Force Bill

The Force Bill, formally titled "An Act further to provide for the collection of duties on imports", (1833), refers to legislation enacted by the 22nd U.S. Congress on March 2, 1833, during the nullification crisis.

Passed by Congress at the urging of President Andrew Jackson, the Force Bill consisted of eight sections expanding presidential power and was designed to compel the state of South Carolina's compliance with a series of federal tariffs, opposed by John C. Calhoun and other leading South Carolinians. Among other things, the legislation stipulated that the president could, if he deemed it necessary, deploy the U.S. Army to force South Carolina to comply with the law.

The relevant sections of the Force Bill are:
 * Section 1 deals with unlawful obstructions to the collections of import duties; by securing ports and harbors for the protection of duty collectors, allowing for the detention of vessels and cargoes to enforce revenue laws, and authorizes the president to use armed forces to protect customs officers and to prevent the unauthorized removal of untaxed vessels and cargo.
 * Section 2 expands the jurisdiction of federal courts to cases arising from revenue collections by the U.S. government and allows injured parties in revenue cases to sue in court. It deems property detained by customs officers to be in the custody of the law, subject to disposition by court order only, and criminalizes anyone who circumvents the legal process in regaining detained property as guilty of a misdemeanor.
 * Section 5 deals with States, or portions within a state, who employ force, or any other unlawful means, to obstruct the execution of U.S. federal law, or interfere with the process of any federal court. This section authorizes the president to use whatever force necessary to suppress such insurrections, "and to cause the said laws or process to be duly executed".
 * Section 6 deals with states that refuse to jail persons imprisoned under federal law. It authorizes U.S. marshals to jail such persons in "other convenient places, within the limits of said state" and to make provisions for this purpose.
 * Section 8 is a sunset clause, stating that the "first and fifth sections of this act, shall be in force until the end of the next session of Congress, and no longer."

Background behind implementation
South Carolina had been sorely disappointed by negotiations surrounding the Tariffs of 1828 and 1832. The state declared the two acts unconstitutional and refused to collect federal import tariffs. President Andrew Jackson saw the nullification doctrine as being equivalent to treason.

In an early draft of what would eventually become his "Proclamation to the People of South Carolina" on December 10, 1832, Jackson declared to the South Carolina government:

"Seduced as you have been, my fellow countrymen by the delusion theories and misrepresentation of ambitious, deluded & designing men, I call upon you in the language of truth, and with the feelings of a Father to retrace your steps. As you value liberty and the blessings of peace blot out from the page of your history a record so fatal to their security as this ordinance will become if it be obeyed.  Rally again under the banners of the union whose obligations you in common with all your countrymen have, with an appeal to heaven, sworn to support, and which must be indissoluble as long as we are capable of enjoying freedom. Recollect that the first act of resistance to the laws which have been denounced as void by those who abuse your confidence and falsify your hopes is Treason, and subjects you to all the pains and penalties that are provided for the highest offence against your country. Can (you)...consent to become Traitors? Forbid it Heaven!"

Meanwhile, Congress passed the Force Bill, which was enacted on March 2, 1833. It authorized the president to use whatever force he deemed necessary to enforce federal tariffs. As a matter of principle, the South Carolina legislature voted to nullify the Force Bill, but simultaneously, a Compromise Tariff was passed by Congress, defusing the crisis.

While the Force Bill rejected the concept of individual states' rights to nullify federal law or to secede from the Union, this was not universally accepted. It would arise again in the buildup to the American Civil War.

title: Force Bill


text:
Gag rule (United States)

In United States history, the gag rule was a series of rules that forbade the raising, consideration, or discussion of slavery in the U.S. House of Representatives from 1836 to 1844. They played a key role in rousing support for ending slavery.

Background
Congress regularly received petitions asking for various types of relief or action. Before the gag rules, House rules required that the first thirty days of each session of Congress be devoted to the reading of petitions from constituents. Each petition was read aloud, printed, and assigned to an appropriate committee, which could choose to address or ignore it. After those thirty days, petitions were read in the House every other Monday.

This procedure became unworkable in 1835, when, at the instigation of the new American Anti-Slavery Society, petitions arrived in Congress in quantities never before seen. Over the gag rule period, well over 1,000 petitions, with 130,000 signatures, poured into the United States House of Representatives and the United States Senate praying for the abolition or the restriction of that allegedly beneficial "peculiar institution", as it was called in the South. There was a special focus on slavery in the District of Columbia, where policy was a federal, rather than state, matter. The petitions also asked Congress to use its Constitutional power to regulate interstate commerce to end the interstate slave trade. These petitions were usually presented by former president John Quincy Adams, who, as a member of the House of Representatives from strongly anti-slavery Massachusetts, identified particularly with the struggle against any Congressional abridgement of the right of citizens to petition the government.

The pro-slavery forces controlled Congress. The faction responded with a series of gag rules that, much to the disgust of Northerners, automatically "tabled" all such petitions, prohibiting them from being printed, read, discussed, or voted on. "The effect of these petitions was to create much irritation and ill feeling between different parts of the Union."

Pinckney Resolutions (1836)
The House of Representatives passed the Pinckney Resolutions, authored by Henry L. Pinckney of South Carolina, on May 26, 1836. The first stated that Congress had no constitutional authority to interfere with slavery in the states, and the second that it "ought not" to interfere with slavery in the District of Columbia. The third was known from the beginning as the "gag rule", and passed with a vote of 117 to 68:

"All petitions, memorials, resolutions, propositions, or papers, relating in any way, or to any extent whatsoever, to the subject of slavery or the abolition of slavery, shall, without being either printed or referred, be laid on the table and...no further action whatever shall be had thereon."

From the inception of the gag resolutions, Adams was a central figure in the opposition to them. He argued that they were a direct violation of the First Amendment right "to petition the Government for a redress of grievances". A majority of Northern Whigs supported him. Rather than suppress anti-slavery petitions, however, the gag rules only served to outrage Americans from Northern states, contributing to the country's growing polarization over slavery. The growing objection to the gag rule, as well as the Panic of 1837, may have contributed to the Whig majority in the 27th Congress, the party's first such majority.

Since the original gag was a resolution, not a standing House Rule, it had to be renewed every session, and Adams and others had free rein at the beginning of each session until this was done. In January 1837, the Pinckney Resolutions were substantially renewed, more than a month into the session. The pro-gag forces gradually succeeded in shortening the debate at the beginning of each session, and tightening the gag.

Attempt in United States Senate (1836)
Senator John C. Calhoun of South Carolina attempted to create a Senate gag rule in 1836. The Senate rejected this proposal, which pro-slavery senators thought would have the rebound (reverse) effect of strengthening the abolition movement. They agreed on a method which, while technically not a gag that violated the right to petition, had the same effect. If an anti-slavery petition were presented, the Senate would vote not on whether to accept the petition, but on whether to consider the question of accepting the petition. The Senate never voted in favor of considering the acceptance of any petition.

Patton (1837) and Atherton (1838) gag rules
In December 1837, the Congress passed the Patton Resolutions, introduced by John M. Patton of Virginia. In December 1838, the Congress passed the Atherton gag, composed by Democratic "states' rights" Congressman Charles G. Atherton of New Hampshire, on the first petition day of the session.

Example of petitions presented on a single day (February 18, 1839)

 * 53 men and 23 women, of Livingston County, New York, "remonstrating against the espionage in which the post office in Richmond, Virginia, and post offices in other places, are subjected, with the knowledge of the Postmaster General".
 * 17 men of Lenox, New York, protesting the "mob violence" against Amos Dresser (Tennessee), Aaron W. Kitchell (Georgia),  and Elijah P. Lovejoy (Illinois); the "unlawful seizure and imprisonment for eight months" of Reuben Crandall; and that a Senator from South Carolina "declared...that, if any abolitionist come to that State, he would be hung [sic], despite any government on earth".
 * Petitions for the recognition of Haiti from 405 men and women of St. Johnsbury, Vermont, 49 men of Northfield, Vermont, 96 men and women of Vershire, Vermont, 28 men of Walton, New York, 26 men of Williamsburg, New York, 194 men and women of Marlborough, New Hampshire, 52 men of Landaff, New Hampshire, 79 men and women of Belmont County, Ohio, 204 men from various northeastern states.
 * 9 petitions, from over 600 individuals, seeking the rescinding of the Atherton gag [see above]
 * 58 petitions, from over 5,000 individuals, seeking:
 * "The abolition of slavery in the District of Columbia,
 * The abolition of the slave trade in the District of Columbia [to be prohibited by the Compromise of 1850],
 * The prohibition of the slave trade between the states,
 * The abolition of slavery in the Territory of Florida,
 * The abolition of slavery and the slave trade in all the other territories of the United States,
 * The refusal to admit any new slave state into the Union,
 * The rejection of all propositions for the admission of Texas."

From December 1838 to March 1839, the Twenty-Fifth Congress received "almost fifteen hundred petitions signed by more than one hundred thousand people. Eighty percent of the signatories supported abolition in the capital".

Twenty-first rule (1840)
In January 1840, the House of Representatives passed the Twenty-first Rule, which greatly changed the nature of the fight: it prohibited even the reception of anti-slavery petitions and was a standing House rule. Before, the pro-slavery forces had to struggle to impose a gag before the anti-slavery forces got the floor. Now men like Adams or William Slade were trying to revoke a standing rule. However, it had less support than the original Pinckney gag, passing only by 114 to 108, with substantial opposition among Northern Democrats and even some Southern Whigs, and with serious doubts about its constitutionality. Throughout the gag period, Adams' "superior talent in using and abusing parliamentary rules" and skill in baiting his enemies into making mistakes, enabled him to evade the rule.

Repeal of the gag rule (1844)
The gag was finally rescinded on December 3, 1844, by a vote of 108–80, all the Northern and four Southern Whigs voting for repeal, along with 78% of the Northern Democrats. It was John Quincy Adams who wrote the repeal resolution and created the coalition necessary to pass it.

title: Gag rule (United States)


text:
Specie Circular

The Specie Circular is a United States presidential executive order issued by President Andrew Jackson in 1836 pursuant to the Coinage Act of 1834. It required payment for government land to be in gold and silver (specie).

History
The Specie Circular was a reaction to the growing concerns about excessive speculations of land after the Indian removal, which was mostly done with soft currency. The sale of public lands increased five times between 1834 and 1836. Speculators paid for these purchases with depreciating paper money. While government law already demanded that land purchases be completed with specie or paper notes from specie-backed banks, a large portion of buyers used paper money from state banks not backed by hard money as a consequence of Jackson's veto of the rechartering of the Second Bank of the United States.

Executive order
On July 11, 1836, Jackson ordered Secretary of the Treasury Levi Woodbury to issue the Specie Circular under federal law whereby the government refused to take anything but gold and silver specie for sales of public lands of over 320 acres after August 15, 1836. It did make a special exception to accept certain types of Virginia scrip. The executive order allowed legitimate settlers (non-speculators, or those purchasing plots of 320 acres or less) to use paper until December 15, 1836.

Consequences
Because the order was one of Jackson's last acts in office, most of its consequences occurred during and were attributed to the presidency of Martin Van Buren. The devaluation of paper currency only increased with Jackson's proclamation. This sent inflation and prices upwards. Many at the time (and historians subsequently) blamed the Specie Circular for the rise in prices and the following Panic of 1837. Cries of "Rescind the circular!" went up and former President Jackson sent word to Van Buren asking him not to rescind the order. Jackson believed that it had to be given enough time to work. Lobbying efforts, especially by bankers, increased in Washington in an attempt to revoke the Specie Circular. Others, like Nicholas Biddle, believed that Jackson's defeat of the Second Bank of the United States was directly responsible for the irresponsible creation of paper money by the state banks which had precipitated this crisis.

The restrictions on credit caused by the order resulted in numerous bankruptcies and the failure of smaller banks. In the South the resulting recession drove down cotton prices well into the 1840s. Small farmers who had bought land on credit were unable to meet their loan repayments with their income from staple crops cut by a half. When they defaulted, "[t]heir land and slaves were repossessed and sold at auction, usually to already well-established slaveholders. ... Some farmers were able to keep a few acres and eke out a living as lesser yeomen. But many lost everything and fell into tenancy and sharecropping. When the cotton market finally recovered, affluent slaveholders held nearly all the South’s best land."

Democratic split
The Democratic party split in two ways regarding the order. Some, like Thomas Hart Benton, supported the use of sound money. The Locofoco wing of the party also agreed with Benton. Senators Nathaniel P. Tallmadge and William C. Rives supported the other side of the party, in favor of paper money. Senator John Pendleton King of Georgia blamed Jackson for the effects of the circular (among other policies), stating in an 1837 speech that he "had not the slightest doubt that our present difficulties were owing entirely to the unfortunate policy and violent measures of the Executive for several years past. This was the only cause, and this was abundantly sufficient." In the United States House of Representatives, John Bell even challenged his own party member, James K. Polk, for his position as Speaker of the House of Representatives over the issue.

title: Specie Circular