Well it only took 5 years until the banking and money supply system was going out of control mainly because of greed of the State banks issuing more and more money.

The Events of 1816

The Second Bank of the U.S. was chartered in 1816 with the same responsibilities and powers as the First Bank.

Author's Note: This was a mistake. The Second Bank would not even enjoy the limited success of the First Bank.

Although foreign ownership was not a problem (foreigners owned about 20% instead of 80% with the first bank, of the Bank's stock), the Second Bank was plagued with poor management and outright fraud (here comes that political greed factor again).

The Bank was supposed to maintain a "currency principle" --

To keep its specie/deposit ratio stable at about 20 percent. Instead the ratio bounced around between 12% and 65 percent. It also quickly alienated state banks by returning to the sudden banknote redemption practices of the First Bank.

Various elements were so enraged with the Second Bank that there were two attempts to have it struck down as unconstitutional.

Author's Note: In 1816 a fluctuation as indicated aboved was devastating. There were no credit cards back then. Can you imagine the turmoil!

Things stated to heat up in 1819 when an American named McCulloch challenged the constitutionalty of the 2nd Bank of the United Stats and took the issue all the way to the Supreme Count of the U.S. in McCulloch v. Maryland (1819) the Supreme Court voted 9-0 to uphold the Second Bank as constitutional.

Chief Justice Marshall wrote:

"After the most deliberate consideration, it is the unanimous and decided opinion of this court that the act to incorporate the Bank of the United States is a law made in pursuance of the Constitution, and is part of the supreme law of the land" (Hixson, 117).

In 1824 Mr. Osborn challenged the constitutality of the 2nd Bank of the U.S. again, but the Court reaffirmed their opinion in a 1824 case Osborn vs. Bank of the United States.

Nicholas Biddle became the Bank's president in 1823 and it began to function as hoped. By the time the Bank had regained some control of the money supply and had restored some financial stability in 1828.

And then the financial climate of the United States started to change with the popular election of Andrew Jackson, the 7th President of the United States. More nearly than any of his predecessors, Andrew Jackson was elected by popular vote.

Andrew Jackson, an anti-Bank candidate, had been elected President.

Although the Second Bank was not a campaign issue (Biddle actually voted for Jackson), by 1832, four years before the Bank's charter was to expire, political divisions over the Bank had already formed. Pro-Bank members of Congress produced a renewal bill for the Bank's charter, but Jackson vetoed it.

In his veto message Jackson wrote:

"A bank of the United States is in many respects convenient for the Government and for the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the Constitution.

Subversive of the rights of the States, and dangerous to the liberties of the people, I felt it my duty...to call to the attention of Congress to the practicability of organizing an institution combining its advantages and obviating these objections.

I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country."

Second Bank of the United States expired in 1836.

The U.S. would be without an official central bank until 1913 when the Federal Reserve System was formed. Jackson believed that the nation's money supply should consist only of gold or silver coin minted by the Treasury (a TRUE patriot) and any foreign coin the Congress chose to accept.

BUT, the caveat was that the gold and silver stocks of the U.S. were terribly inadequate to provide a sufficient money supply of Jackson's preference. The U.S. at that time had no substantial mines of its own and regularly had a trade deficit, so there was no dependable method to increase the moneysupply under what Jackson perceived to be the only Constitutional monetary system.

But, nevertheless, President Jackson's (Old Hickory- was his nickname) theory was quite sound. This is borne out by the fact that many years later the U.S. eventually adopted the gold standard for its currency until President Franklin D. Roosevelt declared that gold was no longer needed as a basis for the United States Currency, and that yet is another subject that will be covered in this site.

President Jackson controlled the Supreme Court
on the matter of banking.

in 1837 in Briscoe v. Bank of Kentucky that state-chartered banks, state-owned banks, and the banknotes they created were fully Constitutional (Hixson, 119). Combined with the unanimous 1819 McCulloch ruling, the legal environment of the U.S. had clearly established that central banking, state banking, and paper currency issued by both entities were Constitutional.

That the U.S. chose to proceed through the balance of the nineteenth century without a central bank would lead to interesting and creative measures to construct a financial system

So 77 years elapsed before the U.S. had a central dept. to control the monetary system, i.e. another central bank system. The system that was hatched which would impact the country and citizens of the U.S. for as long as the there is a country.

The Federal Reserve System
A Private Corporation

This private, secret action by the world's international bankers has not been exposed as the method by which the United States monetary system is neither owned, not controlled by its Federal Government, not has any benefits to its citizens.

Continue to find out WHY.