Banks and Politics in America from the Revolution to the Civil War [Paperback]

Bray Hammond (Author)

Book Description

Publication Date: August 12, 1991

This is a book about politics and banks and history. Yet politicians who read it will see that the author is not a politician, bankers who read it will see that he is not a banker, and historians that he is not an historian. Economists will see that he is not an economist and lawyers that he is not a lawyer.

With this rather cryptic and exhaustive disclaimer, Bray Hammond began his classic investigation into the role of banking in the formation of American society. Hammond, who was assistant secretary of the Board of Governors of the Federal Reserve System from 1944 to 1950, presented in this 771-page book the definitive account of how banking evolved in the United States in the context of the nation's political and social development.

Hammond combined political with financial analysis, highlighting not only the in.uence politicians exercised over banking but also how banking drove political interests and created political coalitions. He captured the entrepreneurial, expansive, risk-taking spirit of the United States from earliest days and then showed how that spirit sometimes undermined sound banking institutions. In Hammond's view, we need central banks to keep the economy on an even keel. Historian Richard Sylla judged the work to be "a wry and urbane study of early U.S. financial history, but also a timeless essay on how Americans became what they are." Banks and Politics in America won the Pulitzer Prize for history in 1958.

Editorial Reviews

Review

Hammond writes engagingly and his work is a happy blend of diligent research and spirited recitals. . . . We have here an excellent account of the evolution toward a uniform paper currency based on Federal credit and a national banking law. -- The Bankers Magazine



Hammond offers some shrewd insights not only into the interaction between monetary policy and politics but also into the basic drift of federalism in these turbulent years. -- Civil War Times

About the Author

Bray Hammond (1886-1968) was Assistant Secretary of the Board of Governors of the Federal Reserve System from 1944 to 1950.

Product Details

• Paperback: 784 pages
• Publisher: Princeton University Press (August 12, 1991)
• Language: English
• ISBN-10: 0691005532
• ISBN-13: 978-0691005539
• Product Dimensions: 9.2 x 6.1 x 1.4 inches
• Shipping Weight: 2.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #907,259 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

19 of 19 people found the following review helpful:

4.0 out of 5 stars Interesting and original -- but tough to get through, September 12, 2002

By 

T. J. Graczewski "tgraczewski" (Burlingame, CA United States) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: Banks and Politics in America from the Revolution to the Civil War (Paperback)

If you've read Schlesinger's "The Age of Jackson" or other liberal interpretations of Jackson and the eponymous socio-political movement that swept the US in the 1830s and are interested in an alternative viewpoint, Bray Hammond's "Banks and Politics in America" (the 1958 Pulitzer Prize winner in history) should be at the top of your reading list.

I hasten to add, however, that this book is an extremely long and arcane history of American banking - central banking, to be more precise - with flashes of cogent analysis and iconoclastic conclusions. In short, this book is most definitely NOT for everyone, and even the most committed students will find that the author makes you work for the insights the book delivers.

Although the book covers over a century of early American banking (from the first colonial land grant offices to the Civil War), the unmistakable focus is Nicolas Biddle's management of the second Bank of the United States (BUS) and the successful Jacksonian assault on that institution beginning in 1832. During the course of his narrative Hammond mercilessly shreds the shibboleths of liberal historians: poor and simple agrarians fought the moneyed elite through Andrew Jackson and his reforms; Nicolas Biddle was a conniving, flagitious political operator; the BUS was a corrupt, inefficient institution that fattened lazy aristocrats at the expense of the humble productive classes; the West was the primary source of hostility toward the BUS. All nonsense, Hammond argues.

Rather, Hammond's thesis is that the main Jacksonian enemies of the BUS - not one of whom was an agrarian, he points out - used Jeffersonian language merely as a pretext to eradicate an institution that was successfully stabilizing the national currency and thus thwarting their speculative business interests. Although he acknowledges that residual agrarian hostility to banks and the resentment of states rights politicians to the intrusion of federal power through the BUS were contributing factors, Hammond argues that the primary impetus for destroying Biddle and the BUS was provided by a new and burgeoning group of business elite, primarily from New York. Made up of ambitious entrepreneurs and local bankers, these new Jacksonians bridled at the regulatory influence the BUS had on restraining free credit. Moreover, because the BUS collected all federal receipts, which at that time were mostly import duties on goods flowing through New York City, local New York banks could not profit from the lucrative trade their city supported. They believed the use of that currency was rightfully theirs, and they resented the fact it was sent to a bank run out of Philadelphia and controlled by Philadelphians (and foreigners, or so many believed, but Hammond denies).

Thus, Hammond concludes, the "Bank War" was really a fight between conservative, principled businessmen on the one side and reckless, "get rich quick" speculators on the other. He holds Nicholas Biddle up as second only to Alexander Hamilton for his contribution in creating the greatest economic engine the world has ever known: American capitalism. Andrew Jackson, meanwhile, is disparaged as a well-meaning dolt whose supposed reforms did nothing to benefit the common man he professed to represent, but rather destroyed the most effective central banking system ever developed by the 1830s.

14 of 14 people found the following review helpful:

5.0 out of 5 stars A unique source of American economic history., May 23, 1999

By 

[e-mail] (Springfield, Illinois, U.S.A.) - See all my reviews

This review is from: Banks and Politics in America from the Revolution to the Civil War (Paperback)

About twenty years ago I was researching the early development of banking in U.S. history. Since much of what is available regarding this period is marginally important, I was prepared to be disappointed. Instead, I found Hammond's work to be the most significant research and writing on the subject available at that time.

I learned that Hammond was an experienced banker before joining the Federal Reserve Banking system and becoming their first official historian. His work combines access to original source material, a plain Midwestern style of explanation, and scholarship that is both honest and reliable. In short, Hammond was one of nature's gift.

The book gives a comprehensive account of banking from the colonial period to the Civil War, a time of particular importance for innovative growth. The most important part of his work is his interpretation of the period immediately preceding the Jackson presidency, including a previously unknown development of an alliance of opportunistic young business democrats with decidely opportunistic interests in the potential of Western expansion. Hammond convincinly ties this movement to persons within Jackson's kitchen cabinet. When reading Hammond you quickly become convinced that he knew where all the bones were buried.

Hammond wrote a second book covering the period from the Civil War to the development of the present Federal Reserve system in the Wilson Administration. I understand from other sources that he became seriously ill during this period. The latter work is much shorter than the first and does not achieve the same high standard.

Hammond's original work is a must for anyone with a serious history in the history and development of U.S. financial structures.