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Langdon Cheves and Nicholas Biddle: New Data for a New Interpretation*
Published online by Cambridge University Press: 03 February 2011
Extract
Few men have had a worse posthumous press than Langdon Cheves of South Carolina, second president of the Second Bank of the United States. He has generally been portrayed as an able lawyer but ignorant of economics and banking—and often as a narrow deflationist who saved the Bank but ruined the country. Vexed by criticism, he is frequently supposed to have gladly bowed out in favor of the better trained Nicholas Biddle.
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- Copyright © The Economic History Association 1953
References
1 Catterall, Ralph C. H., The Second Bant (of the United Suites (Chicago: University of Chicago Press, 1903), is probably the most quoted authority on all these matters. The book, however, contains numerous inaccuraciesGoogle Scholar.
2 The main original sources used here, in addition to standard reference books, are the Biddle, Monroe, and Crawford Papers in the Library of Congress, the Cheves Papers in the South Carolina Historical Society, the Jonathan Roberts Papers in the Historical Society of Pennsylvania, and Judge Cheves's economic library plus miscellaneous Cheves papers in the possession of the author, Mrs. Bennett, Mr. Stoney, and Augustine T. Smythe of Charleston, S.C. The main field which I have not worked is the Maryland Historical Society, and it is possible that the solution to many questions of detail can be found there. Since, however, the main elements of the story are no w established, I have been obliged to stop.
3 For a discussion of the Cheves economic library, see my Bibligraphical Society brochure (1950). Cheves had read just about everything then in print on economics. A few more titles have since been discovered, but they are not important for the present paper. Fortunately the dates of purchase of some of the books survive and show them bought considerably before Cheves took over the Bank.
4 See The Pennsylvania Magazine of History and Biography, April and July 1938, pp. 245, 377. 389- Roberts says (p. 362) Cheves “seem'd eventually to hate Mr. Madison's administration; as much as anybody. He was really a federalist.” This alone would explain the administration's lack of enthusiasm. See also extract from Roberts, infra, n. 6.
5 Biddle was corresponding not merely with Monroe but with many other leading figures including John Forsyth. See the following: to Jonathan Roberts, January 31, 1819:
“There is a subject in relation to the Bank on which I must consult you frankly and confidentially. The gentleman who now exercises the office of President will soon retire. Among those spoken of as his successor are Mr. Lloyd of Boston and Mr. Cheves. The prevailing sentiment is in favoi of Mr. Cheves. Now, in the present state of the Bank, requiring as it does every protection which the gov't can afford, it is very desirable that the President of it should be acceptable to and full in the confidence of the administration. That he is so would by no means be decisive to his favor-but in the peculiar situation of the Bank at the present moment it is certainly a circumstance of high importance. I should wish therefore to know from you distinctly whether you think the appointment of Mr. Cheves would be agreeable to the administration. I have so little personal acquaintance with that gentleman, that I form my estimate of him from what I know. Would it however be necessary for me to pass my opinion on his capacity for the station it will be important to know whether he wil! possess the entire confidence of the gov't.
“Roberts was obliged to reply to Biddle as follows on February 1, 1819:
“The gov't have intimated their assent to the appointment of Mr. Cheves as permanent president of the Bank. What his feelings are now I know not but when he left Congress he felt very sour with the executive. He is an honorable man, liable it is true to be influenced by strong passions. He is also an able man but must be comparatively little acquainted with the duties of Prest.”
The next day, February 3, 1819, Roberts wrote:
“I believe I have nothing to add in respect to the choice of a Prest. of the Bank. The President [of the United States] may be well satisfied widi any choice which it may seem politic to make. I am confident he has intimated his willingness for Mr. Cheves. The object is to preserve the Bank It is a small matter whether friends or opponents have the Bank provided they are men of capacity, & character to the question of Bank & no Bank.
“All these extracts are from the Biddle Papers, Library of Congress.
6 Cf. the following extract from a letter from Langdon Cheves to his brother-in-law, Joseph Heatley Dulles, February 5, 181 9 (MS letter, Mrs. John Bennett, Charleston, S.C.):
“When first informed of my election as a director [of the Bank of the U. S.] it was my wish to resign-but Mr. Potter told me I would disappoint the stockholders …. A letter from Mr. Middleton who represents Charleston District in Congress-informs me that although he has had no direct communicatio n from any members of the cabinet, [a] vacancy has occurred [by the appointment of Judge Johnson to be Collector of the Port of Charleston?] in the Supreme Court of the United States and that it would be kept open on [until?] my determination should be made up between that offer and the Bank appointment ….
“This offer I should greatly prefer, for a thousand reasons, to the one I hold. Yet I was obliged to decline it under the circumstances in which I stand in relation to the Bank appointment as I had to repeated applications said that I would accept the latter…. I really wis h this business were done with-ended in some way. It is s o new a thing to me o t be expectant of an office for any length of time that I feel a kind of conscious shame on the subject….
“How strongly some of the administration men felt about [against] Cheves is shown in the following extract from a (somewhat later) letter of Jonathan Roberts to Biddle, written January 9, 1820 (the Biddle Papers, Library of Congress).
“It has been very painful to me to see my friend Jones sacrificed to its [the Bank's] progress but I hardly think it felicitous for him to have escaped from its responsibility. A Southern president gives the Bank much strength in Congress. Phila. perhaps was the worst place from which a Prest. could have been selected with a view [to] giving the Bank a fair standing in the legislature. I wish Mr. Cheves had acted with more magnanimity toward his worthy though truly unfortunate predecessor. Still now-ever believing him [Cheves] to be honest intelligent & capable, I can feel no other wish than for his success [even?] if the institution itself was not involved in his fame. Cheve s I know to be a proud pertinacious & sometimes a mistaken man. No man ever left a seat in Congress in a worse or more unjustifiable temper. These feelings have softened I have no doubt. The present relations to this government prove it. I mention these things only to place any communication which may take place between us on the right ground [italics added]. They are in their nature strictly confidential & made without knowing the connection which may exist between you. They may be erroneous but I could illustrate them by an appeal to stubborn facts if it were necessary. It has always been my wish to act with every public agent in good faith for the furtherance of the common wish. Mr. C has never crossed the track of my ambition. I am free to say I thought it my duty at times to aim at thwarting his way. I will now cooperate with him with equal zeal. I t is really a time when the republic needs the aid of all her children.”
In the light of the feelings here shown it is possible that Roberts and others may have engineered the Supreme Court offer.
7 Cf. Biddle's reports to Crawford, Monroe, and Colt in December 1819 (Monroe and Biddle Papers, Library of Congress). It is characteristic of Biddle that he should write Crawford asking him to forward the report to Monroe, and then sit down and write directl y to Monroe a statement of what he had written Crawford.
The report (see Biddle to Monroe, December 19, 1819; Library of Congress) had been approved by Cheves. “Mr. Cheves & myself have gone over the paper together. He entirely coincided in all its statements 8t views 6c is desirous that it should appear before the country as explaining the real natur e of our [italics supplied] operations during the presen t year.”
But Roberts writing to Biddle (December 24, 1819; Library of Congress) wholly ignores Cheves's role: “Since I have been here Mr. Crawford has allowed me to peruse your very lucid report of the State of the Bank to the Prest. The administration of that institution is a most difficult one. You [italics supplied] have made it safe, but whether you can preserve its safety with a desirable extent of usefulness is I think problematical.”
8 See the reports, supra, n. 7. Also Cheves's statements in his Exposition, Nilcs Register, XXIII, 91.
9 See a long series of letters in the Biddle Papers, Library of Congress.
10 Ibid.
11 Biddle to Monroe (the Monroe Papers), December 19, 1819. Biddle to Oliver (the Biddle Papers, Library of Congress), May 13, 1819. The administrative situation thus created must speedily have become unmanageable.
12 Preston to Biddle (the Biddle Papers, Library of Congress).
13 Nicholas Biddle to R. L. Colt of Baltimore (the Biddle Papers, Library of Congress).
14 The Philadelphia National Gazette, September 9, 13, 16, 27, October 7, 14, 25, November 3, 10, 11, 18, 1820. The essays appear under the pen name of “Say.”
15 Lloyd wrote as follows, January 20, 1820 (the Cheves Papers, Charleston, S.C.):
“I return to you herewith the essay on currency etc. which you had the goodness to loan to me. I have read it with much pleasure and interest ….
“If you will give me leave, I will ask your attention to the position in the 24th page of the M.S. that ‘Banking does not create capital’ and the train of reasoning consequent upon it. I take the liberty also to lend you a small volume containing a letter to Mr. Peel M. P. ‘On the pernicious effects of a variable standard of value’ if you have not before met with it. I think you will be pleased with its preface-to me it appears to contain the wheat winnowed from much of the chaff contained in many misty voluminous English publications on the same subject.”
There is also a letter from Robert Walsh urging Cheves to publish the essays and dated August 5, 1820 (Cheves Papers, Charleston, S.C).
16 Cheves to Crawford (the Monroe Papers, Library of Congress) October 16, 1820.
17 Ibid.
18 It should be realized that Cheves was not proposing indiscriminate loans on land or loans to be made in prosperity. It was strictly a depression scheme.
19 Hoffman to Cheves, November 18, 1820 (the Cheves Papers, Charleston, S.C.). Catterall refers to Colt as Cheves's “trusted” agent, citing Louise Haskell Daly as his authority. But upon reference to Mrs. Daly's paper one finds merely the bare mention that Colt was Cheves's agent. “Trusted” is Catterall's contribution.
20 Colt to Biddle, Biddle to Colt, November 1820 (the Biddle Papers, Library of Congress).
21 Cf. the following from Hoffman to Cheves, November 1.8, 1820 (Cheves Papers, Charleston, S.C.):
[I have endeavored & have in considerable degree convinced [Colt] (and others) on misconceived points, particularly in stating the reasons, views, & feelings for not advancing the stock loans (or loans on Stock to par) he appears content. He is however countenanced in his opinions on this point by all, or nearly all, our heavy and I may say safe stockholders. I do not think it a matter of much importance. Its refusal shows a safe and cautious policy, although under my view it would be safe to loan and some interest would be added-but i t might lead to wrong conclusions….
“I have lately had a good deal of conversation with our mutual friend ]. O. [John Oliver] he is sound as ever in all main respects. It is true on the subject of directors he has erred, & on that.of advancing at par he thinks it quite safe under regulation, but on other respects he approves the administration.”
22 This draft statement deserves quotation in full but space is available for only a few clauses. Cheves is arguing for the “appropriation of definite capitals” to the branches, and among his reasons are:
“4th. A diminution of the great and Complex duties of the Directors of the Parent Bank by depositing a part thereof with a portion of Capital and responsibility in the hands of the Directors of the several Branches.
“5th. A correction of the great evil which has long been complained of, Viz., The perpetual Balance of Trade or exchange in favor of one part of the Country against the other and consequently the reiterated demands on the Banks for Specie to go Eastward.
“This latter is a great disidcratum (sic) and I cannot doubt will be found in giving to each Bank a capital suitable to its situation with permission to draw on any of the Branches for its credits only, and with obligation to redeem and pay all its notes when they may be taken up by any other Branch. Each office will then be restrained within its appropriated means and will act as a regulator on all the State Banks in its vicinity, of course money cannot be. made greatly out of proportion more plenty in one part of the country than in another without incurring a debt to others, which if liable to be called for, will be a sufficient check against excess or over trading of Banks and individuals….
“The late order of the Bank directing the different Offices to cease drawing on each other and directing the several Branches to receive and pay their own notes only has had a partial effect to check this evil, but still the obligation to receive all Branch notes in all payments to the government presents an easy and ample mode of drawing all the funds out of the Eastern Branches for the benefit of those that continue to lend more than their relative proportion.”
The economic expert who wishes to evaluate Cheves's analysis fairly must, however, consult the full original. Only a fragment has been given and Cheves's careful and complicated supporting reasoning has been omitted.
23 , Catterall, op.cit., p. 75Google Scholar.
24 See letters of Edward Jones, August 31, September 9, September 14, 1820. The Cheves Papers, Charleston, S.C.
25 The Philadelphia National Gazette for December 8, 1820, comments upon the similarity of language.
John Potter wrote Cheves on November 8, 1820, from Washington (the Cheves Papers, Charleston, S.C.):
I saw Mr. Calhoun and Mr. Crawford yesterday. Jenny & I. spent last night with the former who labors earnestly to be the friend of the Bank, and highly approves of the plan for limiting the Bank paper to where it is issued.
Mr. Crawford with whom I touched lightly upon the subject was alike favorable, but did not think the consequences would be as considerable as was supposed.
“These gentlemen now think it appropriate to ask Congress what may be done a propos the welfare of the Bank.”
27 See Roberts' letters, n. 6..
28 The Cheves Papers, Charleston-, S.C.
29 , Catterall, op.cit., p. 94Google Scholar.
30 Ibid., p. 95.
31 Roberts to Cheves, January 20, 1821: “I would be as far as any man from giving Phila. stockholders any advantage over the distant ones.” The Cheves Papers, Charleston, S.C.
32 The Biddle Papers, Library of Congress. The Roberts Papers in the Pennsylvania Historical Society are especially disappointing. Full of letters relating to Bank matters up to 1819, they contain nothing on the subject thereafter, save three letters from Jones, until 1824 when the series again begins. All letters relating to Cheves's regime are missing.
33 , Catterall, op.cit., p. 81Google Scholar.
34 The Roberts Papers, Pennsylvania Historical Society.
35 I have been unable to see the Biddle Papers still at “Andalusia.”
36 Philadelphia National Gazette, January 24, 1821.
37 Biddle to Monroe, Crawford, and Roberts, January 29, 1821 (the Monroe and Biddle Papers, Library of Congress). The minute books of the Bank are lost so far as I can find.
38 Ibid.,
39 One characteristic but earlier reaction is found in the bitter editorials in Niles Register, December 16, 1820. This contains some sarcastic references to the literary style of the part of the memorial' that was clearly Cheves's' work. Perhaps if Cheves had been able to write as lucidl y as Biddl e he might have defeated him. Here his limited education was a real obstacle.
There are numerou s letters from John Sergeant and Roberts to Cheves in the Cheves Papers in Charleston regarding the struggle.
40 Annals, 17th Cong., 1st Sess. (March 14, 1822), p. 291.
41 Cf. the following from Clay to Cheves (the Cheves Papers, Charleston, S.C):
“(Confidential)
Ashland 5th Oct. 1822
“My Dear Gheves:
So you, have executed your intention, intimated to me in April last of announcing publicly your fixed determination to resign the'Presidency of the Bank. What next? …. Henry Clay.”
42 The Cheves Papers, Charleston, S.C. It is possible by reading together the Cheves and Biddle papers to follow the struggle from both sides. Some of the crosscurrents are quite amusing. How hard Biddle worked is shown by the following from the Biddle Papers, Library of Congress.
Colt of Baltimore had written Biddle, November 2, 1822:
“I must entirely agree with you on the subject referred to [obviously Biddle's campaign for the presidency]-but we have here some influential men who are sick they say of lawyers & will not hear of one succeeding to Cheves.”
To this letter Biddle replied as follows on November 4.
“Before receiving your letter I had been spoken of & spoken to by some of the leaders of both the parties which divide the stockholders of the Bank. I need not mention names but they are persons who are very decidedly in opposition to each other. Some of them my old colleagues & some who have been in active opposition. When pressed to know whether I would allow my name to be brought forward I have said that I would neither seek nor shun the office-that I would engage in no intrigue & trifle with no parties but if a respectable majority of stockholders wished me to be placed at the head of the institution I would serve if elected.
“The subject has I understand been favorably received here.
“I have reason to suppose it would not be disagreeable to the gov't.
“In relation to the professional difficulty you mention I was rather surprised to find myself classed among the lawyers without meaning to disown my occupation. You know pretty well what my history has been…. I am afraid that my only pretention to be a lawyer is my having at most only nominally a membership of the bar about two years, as I have given it up for eleven years past & my pursuits have been ver y different from those which occupy lawyers.”
43 See Robert Gilmor's letter to Cheves, July 21, 1822. The Cheves Papers, Charleston, S.C.
44 Letters of W. Forrest and Richard P. Forrest to Biddle (the Biddle Papers, Library of Congress), April 9, 1822, March 29, 1822. Both explain that Monroi values Biddle highly but South Carolina, Ne w York, and Pennsylvania have all the diplomatic jobs. He cannot appoint another Pennsylvanian.
However, Biddle had succeede d in getting his dissatisfaction across to Monroe. It is too bad Biddle's own letters on this point are missing from the Librar y of Congress file.
45 The Biddle Papers, Library of Congress.
46 The Biddle Papers, Library of Congress, November I, 1822.
47 John Potter to Cheves (the Cheves Papers, Charleston, S.C.) from “Colerain, near Savannah,” December 1822.
48 On the general scheme of Jackson's ideas, see Catterall, , op.cit., pp. 196–97Google Scholar. In addition there is President Tyler's tribute. “In 1828,” writes Lyon G. Tyler, John Tyler, “in his speech on the Cumberland Road … praised its [the Bank's] [former] president, Langdon Cheves of South Carolina, for the ‘self denying policy’ which had given the Bank ‘the power to influence’ which it then so unhappily enjoyed” (italics added). Tyler, Lyon G., Letters and Times of the Tylers, 1885, I, 488Google Scholar . Thus Cheves had the personal respect of precisely the elements most hostile to the Bank. True Jackson refused Calhoun's attempts to make Cheves Secretary of the Treasury in 1830. But that was only because of Cheves's belief in free trade. Wiltse, Charles M., John C. Calhoun, Nullifier (Indianapolis: Bobbs-Merrill Company, 1949), pp. 20–21Google Scholar.