The First Bank of the United States (1791-1811) < A Brief History of Central Banking in the United States (2024)

FAQs

What happened to the First Bank of the United States in 1811? ›

Congress opted not to renew the bank's charter when it expired in 1811. Five years later, after the War of 1812, President James Madison signed a bill establishing the Second Bank of the United States.

The Bank acted as the federal government's fiscal agent, collecting tax revenues, securing the government's funds, making loans to the government, transferring government deposits through the bank's branch network, and paying the government's bills.

1791-1811: First Attempt at Central Banking

At the urging of then Treasury Secretary Alexander Hamilton, Congress established the First Bank of the United States, headquartered in Philadelphia, in 1791. It was the largest corporation in the country and was dominated by big banking and money interests.

The Bank acted as the federal government's fiscal agent, collecting tax revenues, securing the government's funds, making loans to the government, transferring government deposits through the bank's branch network, and paying the government's bills.

Foreign ownership, constitutional questions (the Supreme Court had yet to address the issue), and a general suspicion of banking led the failure of the Bank's charter to be renewed by Congress. The Bank, along with its charter, died in 1811.

After the charter for the First Bank of the United States expired in 1811, Stephen Girard purchased most of its stock as well as the building and its furnishings on South Third Street in Philadelphia and opened his own bank, later known as Girard Bank.

The Bank of the United States was first chartered by the US Congress on February 25, 1791 after being proposed by Alexander Hamilton (Secretary of the Treasury) in 1790. The purpose for the bank was to handle the financial needs and requirments of the new central government of the newly formed United States.

The First Bank of the United States was the first centralized banking system and helped stabilize the economy during the volatile years after the Revolutionary War. It helped shape fiscal policy that continues to this day through the Federal Reserve.

The First Bank of the United States was a cornerstone of Hamilton's fiscal policy. It helped fund the public debt left from the American Revolution, facilitated the issuance of a stable national currency, and provided a convenient means of exchange for all the people of the United States.

Jackson's distrust of the Bank was also political, based on a belief that a federal institution such as the Bank trampled on states' rights. In addition, he felt that the Bank put too much power in the hands of too few private citizens -- power that could be used to the detriment of the government.

Why was the first bank of the United States chartered? ›

One of the chief proponents of a national bank was Alexander Hamilton the first Secretary of the Treasury because he felt it would stabilize and improve the nation's credit.

Many citizens, politicians and businessmen perceived it as a menace to both themselves and U.S. democracy. One notable opponent was President Andrew Jackson, who, in 1829, when the charter still had seven years to run, made clear his opposition to the Bank and to the renewal of its charter.

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However, the bill passed both houses of Congress by February 8, 1791. President Washington signed the Bank of the United States into law on February 25, 1791. What did Secretary of the Treasury Alexander Hamilton's "Report on a National Bank" provide for?

The Bank of United States, founded by Joseph S. Marcus in 1913 at 77 Delancey Street in New York City, was a New York City bank that failed in 1931. The bank run on its Bronx branch is said to have started the collapse of banking during the Great Depression.

In December 1997, National City Corp. announced that it was acquiring the Kalamazoo–based First of America Bank Corporation, with offices in Michigan, Illinois and Indiana, for $7.1 billion in stock. The acquisition was completed in March 1998.

Thomas Jefferson's supporters, who had opposed the original chartering of the BUS, were in power in 1811 and chose not to renew the BUS charter when in expired in that year.

The bank's charter was unfair, Jackson argued in his veto message, because it gave the bank considerable, almost monopolistic, market power, specifically in the markets that moved financial resources around the country and into and out of other nations.

Reconstituted in 1816, the Bank of the United States continued to stir controversy and partisanship, with Henry Clay and the Whigs ardently supporting it and Andrew Jackson and the Democrats fervently opposing it. The bank ceased operation in 1841.