Politics and its influence on the operation of the State Bank of Illinois

Includes bibliographical references.The second State Bank of Illinois and its relationship with politics is the subject of research covered and analyzed in this paper. There were a number of primary motivating forces for selecting this topic for research, first, I wanted to clearly identify those members of Congress who both supported and opposed Andrew Jackson’s bank policy. After establishing these men and their parties on the question of the United States Bank, I next wanted to see how each of these factions aligned on such questions as state banking, specie currency and a hard-money policy, and Martin Van Buren's Sub-Treasury plan. Secondly, after having established party-lines on the national level, I wanted to shift the scene to Illinois where state banking was being practiced end compare the political party’s attitude on banking in this state with that on the national level. Thirdly, and most importantly, I wanted to show the relationship of the State Bank's operations with that of politics in Illinois. I was interested in discovering what party or parties supported the State Bank of Illinois, what party had control of the State Bank of Illinois, the influence party control had on the bank’s financial matters, important investigations into bank affairs, and generally the effect politics and politicians exerted in its operation between 1835 and 1843. A number of important facts are brought forth through research in this area. First of all, it was shown that Andrew Jackson and his famous "Kitchen Cabinet" were the ones most responsible for defeating and dissolving the Second Bank of the United States. The Whigs defended their continued operation, but even Henry Clay and Daniel Webster could not overcome the sentiment Jackson had aroused against the federal bank. Likewise, Andrew Jackson, Roger Taney, and Amos Kendall were the ones responsible for the establishment of state banks in place of the federal banks. The Whigs were opposed to these inflationary institutions, but again were unable to raise enough people sentiment to defeat their establishment. Thus, nationally the Democrats stood for state banking versus national banks, where as the Whigs supported national banks in favor of state banks. Oddly enough, this same sentiment did not exist in Illinois. The Democrats in Illinois also opposed the national banks, but unlike their national counterpart, they too were hostile to state banks. On the other hand, the Illinois Whigs favored the national bank, but with its being dissolved they directed their loyalty to the cause of state banking. Obviously, banking in Illinois also was susceptible to political debate. Debate and accuse they did, for the Democrats were most jealous of the control the Whigs utilized in operating the State Bank. After 1836, the Democrats had only one thing in mind--destroy the State Bank of Illinois, & so doing, the Democrats hoped to establish and form their own banks. The Whigs, on the other hand, were in full control of banking affairs. Prior to 1837, the Whigs had few problems due to the bank's successors, but after the Panic of 1837 the Whigs were constantly defending and halting democratic attempts to investigate banking operations and personnel. Eventually, Whig support of the state banks began to waver, and when it did, the Democrats destroyed the state banks. Research in this area was most rewarding to me for a number of reasons. The material uncovered on Abraham Lincoln and his great work in support of the banks was most interesting. Also, most of the paper, I feel, involved original research. Many investigation reports, newspaper items, and personal letters were discovered which helped enormously in adding interesting material to the body of the paper. The greatest reward in writing this paper was to compare political strategy and techniques in our times with those in the past, I found that party organization was managed and controlled better today, but party loyalty in those days was strong, if not stronger, than it is today.M.A. (Master of Arts