All this changed in 1811， when Congress decided not to renew the First Bank's charter. Opposition to renewal in part came from Anti-Federalists-notably Thomas Jefferson—who saw the Bank as a bulwark of big government， concentrated economic power. Equally strong opposition came from state-chartered banks， which resented its real or imagined regulatory power.
In the five years following the demise of the First Bank， many of the fears of its supporters were realized. The number of state banks almost tripled despite the dislocations caused by war. The quantity of outstanding bank notes rose from $36 million to $76 million. The specie held by the banking system actually declined. As a result， the structure of banking was seriously weakened， and in 1814 a run on banks forced most to renege on their legal obligations to exchange notes for specie. It is possible that a strong central bank with a management devoted to conservative note-issuing practices could have prevented the rapid note expansion.
In 1816 the Congress chartered the Second Bank of the United States along the same lines as the First Bank. After a rocky start， the Second Bank recaptured its special position in the banking community under the able hand of prominent Philadelphian Nicholas Biddle. There followed more than a decade of national financial stability.
Like its predecessor， the Second Bank had enemies. Banks in general resented the Second Bank's privilege of holding government deposits， funds which they believed might as easily be part of their own reserve base. Most important the Second Bank had to contend with the bitter opposition of a remarkably effective politician President Andrew Jackson， who announced his goal in 1828， fully seven years before the Bank would need to be rechartered. Winning the election campaign of 1832， Jackson wasted no time in putting as much distance as legally possible between the federal Treasury and the national bank. He withdrew government deposits from the Second Bank and placed them in his“pet banks” around the country.
If destruction of the Second Bank of the United States was folly， then the price of that folly was several decades of financial instability， when a majority of states experimented with some form of free banking legislation. Typically these laws allowed anyone to set up a bank， provided the issue of notes was backed with securities kept on deposit with the state banking authority. Some free banking states， like Louisiana， could boast of perfect success in protecting bank customers. Others- notably Michigan - became refuges for wildcatters. Obviously the era of free banking had dragged too long before the Federal Reserve System came forth in 1913.