Front Page Titles (by Subject) THE MONEY MARKET AND NICHOLAS BIDDLE - Democratick Editorials: Essays in Jacksonian Political Economy
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THE MONEY MARKET AND NICHOLAS BIDDLE - William Leggett, Democratick Editorials: Essays in Jacksonian Political Economy 
Democratic Editorials: Essays in Jacksonian Political Economy, Foreword by Lawrence H. White (Indianapolis: Liberty Fund, 1984).
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THE MONEY MARKET AND NICHOLAS BIDDLE
April 1, 1837.
Title added. Text abridged and extract deleted.
The money-market has been in a violent ferment during the past week. Meetings of the merchants, “protracted meetings,” and frequent informal conferences have been held. The result of the whole matter has been an application to the Philadelphia Money Autocrat, Nicholas Biddle,1 for his gracious and merciful interposition. “Drowning men catch at straws,” and a mere man of straw has the bank potentate proved himself to be on this occasion. His worshippers, however, reverence him as possessing the attributes of potentiality, and their homage is as fervent as that of a race of croakers of old to King Log. . . .2
. . .
Either Nicholas Biddle has the prodigious money power which the merchants ascribe to him, or he has not. If he has in truth the power of relieving the financial distresses of the times, then the ground of the last administration for opposing the renewal of the charter of such a potential institution, which holds the destinies of the Confederacy in the hollow of its hand, and which can create plenty or scarcity, prosperity or ruin, at the volition of a single mind, is shown to have been correct. If he has not this power, what a wretched farce is now played off before the community. But the merchants obviously believe in his potentiality, and thus, so far as they are concerned, acknowledge the validity of General Jackson’s original and chief position. Yet they opposed him for assuming it. This, then, shows that their temporary pecuniary interest outweighs with them the eternal political interests of their country. What a commentary on the patriotism of the desk and the ledger!
But are the proposed measures3 truly measures of relief, or are they only calculated to arrest, for a brief space, the descending blow, to fall at last with accelerated force and augmented weight, not on the heads now justly exposed to the shock, but on the heads of those who, not having been participants in the enormities of mad speculation, have not merited its terrible consequences? The latter clause of this alternative question, it seems to us, must be answered in the affirmative.
What has produced the evil state of things under which the community now groans? A too wide extension of credit, far surpassing the demands of healthy and legitimate business, and diffusing itself to all sorts of chimerical enterprizes. The legitimate business of a country is measured by the amount of its exportation and the domestick consumption of its own products. When it exceeds this limit it becomes unhealthy speculation, certain to terminate, sooner or later, in revulsion and ruin; as the machine, driven beyond the rate of speed fixed by the laws of its mechanism, is sure to be thrown out of repair, if not broken all to pieces. That this is the case with our community is a position too self-evident to require argument. The plan of relief, as it is called, which is now proposed, is a mere plan to put off the day of payment of the immensely over-inflated amount of debt. But the means of procras[tina]tion are of the most expensive kind. Those who are to receive the benefit of the extension of credit, will be obliged, in the nature of things, to pay prodigious rates of interest for the present funds they realize, and the day of ultimate payment will find them less able to meet their obligations than they are now. Those whose imaginary wealth consists in houses and lands held at a nominal value far exceeding their intrinsick worth, will not suffer the bubble which they have so long fancied actual substance, to burst into empty air, as long as they can keep up the sparkling nothing by forced loans, procured at any rate of extortion. Neither will they retrench their luxurious style of expenditure, assumed in the confidence of sudden wealth. The shock which is thus deferred will thus fall at last with accumulated force. But in the meanwhile one set of creditors will be substituted for another. The banks, which, if the crisis were now to take place, would sustain their share, or a share, of the loss, will, in the interval of prolonged credit, take good care to entrench themselves behind triple securities. The foreign creditors, in extending indulgence, will be equally on the alert to secure ultimate payment; and the blow will finally fall on the mechanick and labourer, on thousands of general creditors, who, if men were now suffered to experience the natural consequences of their rashness and folly of speculation, would come in for an equal portion of indemnity.
It is our s[i]ncere conviction that the proposed measure of procrastination, and any measure of procrastination, can be followed only by an increase of ultimate evil. That evil may be spread over a wider surface, but it will not be diminished in amount. The old saying, that the hair of the dog is a cure for his bite, will be found as false in its present, as in its more usual application. It is seldom the same thing possesses utterly opposite qualities. There is a new theory in medicine which administers as a remedy that which caused the disease. The merchants and Mr. Biddle are now for applying this theory to business. An excessive inflation of bank credit caused the evil; and they now propose a still further inflation as the cure. The traveller who warmed his frozen hands with his breath in the cave of the Satyr, and afterwards blew in his porridge for an opposite purpose, excited the admiration of his host. We shall not less admire the miraculous qualities of Nicholas Biddle if the breath of his nostrils can produce such contrary results. The frog, in the fable, when he was blown up to unnatural dimensions, finding himself in pain, asked to be still further distended; but he was destroyed, not relieved, by the experiment. When the rain for forty days and forty nights covered the earth with a deluge, it was not a continuation of the storm that caused the waters to subside. We doubt if the community can be rescued from the dreadful consequences of a deluge of bank credit, by a further effusion from the fountain of evil.
[1 ]President of the Second Bank of the United States, at the date of this editorial operating under a charter from the state of Pennsylvania.—Ed.
[2 ]An allusion to the fable of the frogs desiring a king, to whom Jupiter sent down a log of wood.—Ed.
[3 ]A reference to Biddle’s offer to rediscount bills held by the New York banks.—Ed.