Boston Weekly Messenger Editorial

This article shows that opposition to the Second Bank predated the institution’s formation but that moderate critics, like the editors of the Boston Weekly Messenger, admitted that the new bank could be a “blessing to the country” if it fell into “the hands of such men as will conduct its concerns on sound and upright principles.” Ironically, the Second Bank was at first controlled by men with unsound principles. Instead of controlling the issuance of bank notes by state banks, as the first BUS had done, the Second Bank at first added to what the newspaper editors called the “too great amount of bank bills in circulation,” and thereby exacerbated an asset bubble that popped in late 1818 and early 1819, leading to three years of recession. The Second Bank also suffered from several embezzlement scandals in its early years, including most famously and seriously at its Baltimore branch. Declining stock prices (from $154 per share in early December 1817 to $90 in late June 1819) induced large stockholders to step up and clean up the institution, which thereafter was ably led by Langdon Cheves (1819-1822) and Nicholas Biddle (1822-1836). The stockholders’ activism was rewarded with an increase in dividends, as well as stock prices that stayed in the vicinity of $120 per share for over a decade.