continue its operations. In 1811, the proponents of the bank had to build a majority coalition to
ensure the bank’s survival.
The Republicans were still strong with a liberal leaning median voter. But now they only
held 75% of house seats, relative to 80% a few years before, and partisan capacity had dropped
considerably. Despite these advantages, the Republicans still formed a relatively weak winning
coalition. Two bills, the first on April 21, 1810, and the second on January 24, 1811, illustrate
the voting patterns in the house; both bills proposed to postpone indefinitely a bill to continue the
national bank. The attempt to recharter finally failed in the House on January 24, 1811 in a vote
of 65 to 64. On February 20, 1811; the bill was defeated in the Senate, 18 to 17. Vice President
George Clinton of New York cast the deciding vote in the Senate, never having forgiven Gallatin
and Madison for opposing his presidential ambitions.
For each roll call in the house, I estimated a logit model that included a dummy variable
for region (=1 for south), party (=1 for Republicans/Democrats), DW-NOMINATE 1
st
dimension
(DW-1), and DW-NOMINATE 2
nd
dimension (DW-2). Federalists voted against both bills,
which would have defeated the bank’s recharter, demonstrating considerable party unity.
Republicans were not as unified and there was some support for the bank. Taking into account
preferences on the first dimension, legislators who were more conservative were more likely to
oppose postponement while those more liberal were more likely to support postponement.
These voting patterns demonstrate the continued opposition to the bank by Republicans
and liberal legislators and the persistent support for the bank by members of the Federalist Party.
Even though the Republicans could have acted earlier, when partisan majorities were as high as
80% and partisan capacity still higher, they waited until there was a window of opportunity to act
on those preferences, form a winning coalition, and get rid of the bank.
6. The second Bank of the United States, 1816-1832
At the time, the failure to recharter the bank was not seen as a major political defeat or
the harbinger of a financial crisis. But as the country was drawn into the War of 1812, the
financial difficulties of its previous military endeavors against Great Britain surfaced yet again.
The absence of a national bank forced the Treasury to employ state banks as depositories for the
public revenue. Even though the banks had to submit weekly and monthly statements of their
accounts to the Treasury Secretary, the government required no security for its deposits.
22
Stabile, Donald R. and Jeffrey A. Cantor. 1991. The Public Debt of the United States An Historical
Perspective, 1775-1990. New York: Praeger.
23
Kinley, David. 1910. The Independent Treasury of the United States and its Relations to the Banks of
the Country. Washington, DC: Government Printing Office.
17
Convention