The national bank re-chartered in 1816 following the lapse of the First Bank’s charter in 1811. Functioning as a fiscal agent for the U.S. government, it aimed to regulate state banks, provide a stable national currency, and promote economic growth. Its establishment followed a period of financial instability and was intended to rectify the economic challenges the nation faced after the War of 1812. For instance, it held government deposits, made loans, and facilitated the transfer of funds across state lines.
Its significance lies in its role in shaping early American economic policy and political debates. The institution sparked considerable controversy regarding federal power, states’ rights, and the role of government in the economy. Proponents believed it fostered stability and growth, while opponents, like Andrew Jackson, viewed it as an unconstitutional concentration of power that favored wealthy elites at the expense of the common citizen. The conflict over its re-chartering dominated Jackson’s presidency and ultimately led to its demise, significantly impacting the development of the American financial system.