First Bank of the United States

George Washington's Secretary of the Treasury, Alexander Hamilton, suggested that the United States would benefit from the formation of a national bank along the lines of the Bank of England. He was convinced that the bank was both proper and constitutional, being allowed by the tenth amendment (not at that time even ratified) because it was an appropriate means, albeit not specified, to achieve the goals of the federal government.



The bank had branches in other cities and played a valuable role in the commerce of the young nation. However, it was constantly under attack from the Jeffersonian Democrats who prevented its charter from being renewed in 1811. However, the financial stress of the War of 1812 showed the need for the bank, and the Second Bank of the United States was chartered after the end of the war. After Alexander Hamilton spearheaded a movement advocating the creation of a central bank, the First Bank of the United States was established in 1791.

The First Bank of the United States had a capital stock of $10 million, $2 million of which was subscribed by the federal government, while the remainder was subscribed by private individuals. Five of the 25 directors were appointed by the U.S. government, while the 20 others were chosen by the private investors in the Bank.

The First Bank of the United States was headquartered in Philadelphia, but had branches in other major cities. The Bank performed the basic banking functions of accepting deposits, issuing bank notes, making loans and purchasing securities. It was a nationwide bank and was in fact the largest corporation in the United States. As a result of its influence, the Bank was of considerable use to both American commerce and the federal government.

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Quotes regarding First Bank of the United States.

By Alexander Hamilton
Opinion on the Constitutionality of the Bank of the United States, 1791


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