1. The Bank of the United States

3. Hamilton submitted a report to Congress in December 1790, outlining his proposal for creating a national bank

4. Alexander Hamilton, first Secretary of the Treasury
Hamilton (Federalist Party) argued a national bank was necessary for the nation's credit, and to conduct the financial business of the United States government

5. The President, Directors and Company, of the Bank of the United States is commonly known as the “First Bank of the United States”
It was a national bank

6. Under Hamilton’s national bank plan, the number of votes was to be determined by the size of each shareholder’s investment

7. The proposed national bank would have a maximum ratio of loans to specie {pronounced spee-she} which was gold or silver

8. The other provision was that the government would own 20 percent of the U.S. bank

9. Purposes of the Bank of the U.S
1. Federal fiscal and monetary power
2. The federal mint
3. Excise taxes

10. U.S. Bank Duties
Issuing paper money(banknotes or currency)
Providing a safe place to keep public funds

11. U.S. Bank Duties
Offering banking facilities for commercial transactions
Acting as the government’s fiscal agent in collecting tax revenues

12. Thomas Jefferson was afraid that a national bank would create a financial monopoly that would undermine state banks

13. Even with the opposing voices and much debate in Congress, Hamilton’s bill cleared both the House and the Senate in the winter of 1791

14. Hamilton delivered to the president a lengthy (ca
Hamilton delivered to the president a lengthy (ca. 15,000 words) refutation of his fellow cabinet members’ arguments
President George Washington signed the bill

15. It was chartered for a term of twenty years
Chartered by the United States Congress on February 25, 1791
It followed the Bank of North America, the nation’s first de facto central bank

16. The Bank of the United States also accepted deposits from the public and made loans to private citizens and businesses

17. The First Bank’s charter required it to seek approval from Congress before making loans to any state or to foreigners in order to protect the interests of the U.S. Constitution

18. At its initial public offering (IPO), the First Bank did not directly sell shares for immediate delivery, but rather “scrips,” (or receipts) which cost $25 each

19. There was speculation which contributed to the First Bank scrip bubble of 1791 and the Panic of 1792
The public survived each financial crisis

20. Unlike modern central banks, the Bank of the United States did not officially set monetary policy
Unlike state banks, First Bank notes were the only ones accepted for payment of federal taxes

21. When the First Bank opened, the country had only three other banks
In contrast, there were 101 state banks in the country when the First Bank’s charter expired in 1811

22. Without the First Bank, the government had to rely more heavily on state banks to help finance the war
The United States had debt from a war with England, soaring prices, and devalued money from rising inflation

23. 1816, President James Madison signed the bill that would create the second Bank of the United States

24. Brief Banking History
Feb. 25, First Bank of the United States
Apr. 10, Second Bank of the United States

25. Mar 6, 1819 McCulloch v. Maryland, Supreme Court case ruling state banks cannot interfere with federal institutions

26. 1836 Economic depression
Jan 1, 1861 Investment banking firm which helps finance north during the civil war
Feb. 25, 1863 Congress approves the National Bank Act

27. Dec. 23, 1913 The Federal Reserve Act sets up a new system of federal banks
October 24, 1929 The Great Depression begins in the U.S.
Mar 6, 1933 Bank Holiday closes all of the nation’s banks

28. Jun 18, 1933-1999 Glass-Steagall Act separates commercial and investment banking; FDIC
Aug 9, 2007 Global Financial Crisis leads to increased regulations and reforms

29. 2007 Global Financial Crisis
Banks overextend their abilities to make loans and assume debt
Housing market bubble leads to the housing market crash giving us foreclosures, high unemployment and the Great Recession ( )
Worst financial event since the Great Depression

30. The First Bank building is now registered as a National Historic Landmark in Philadelphia, Pennsylvania
It is located in Independence National Historical Park