Almost 200 years later...déjà vu

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the bread stuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." -Andrew Jackson, 7th US President

In 1836, Andrew Jackson forced the closing of the Second Bank of the U.S. by revoking its charter.Interesting... now why is this so familiar?"The Second Bank of the United States provided a convenient way for the government to handle its affairs. The bank was created when James Madison and Albert Gallatin found the government unable to finance the country in the aftermath of the War of 1812.

The War of 1812 had put the United States in significant debt, and the First Bank of the United States had closed in 1811. The debt of the nation led to an increase in banknotes among the new private banks, and as a result, inflation increased greatly. As a result, Madison and Congress agreed to form the Second Bank of the United States. After the war, despite the debt, the United States also experienced an economic boom, due to the devastation of the Napoleonic Wars. In particular, because of the damage to Europe's agricultural sector, the U.S. agricultural sector underwent an expansion. The Bank aided this boom through its lending, which encouraged speculation in land.

This lending allowed almost anyone to borrow money and speculate in land, sometimes doubling or even tripling the prices of land. The land sales for 1819, alone, totaled some 55 million acres (220,000 km²). With such a boom, hardly anyone noticed the widespread fraud occurring at the Bank as well as the economic bubble that had been created.

Courtesy of Thomas Dixon "Thought of the week"