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 The Bank of the United States

The (First) Bank of the United States, proposed by Treasury Secretary Alexander Hamilton, was established in 1791 with a charter from the Congress of twenty years. Privately owned, the bank would serve as the fiscal agent for the federal government.  It took deposits, issued currency, and made loans to both the government and the private sector. Although successful, it was a politically controversial institution. Opponents such as Thomas Jefferson and James Madison, (who would later change his position), felt that a national bank was unconstitutional and benefited only merchants and the elite. It did not help matters that British interests held some two-thirds of the bank's capital stock. When the (First) Bank's charter came due for renewal in 1811, Vice President George Clinton cast a tie-breaking vote in the Senate, effectively ending any chance the bank would see its charter renewed.   After its expiration, Philadelphia merchant Stephen Girard bought the bank and its assets, and it remained a successful lending institution. Girard Bank was acquired 1983, and is now part of BNY Mellon.


Financing the War of 1812, along with the difficulties of having numerous state banks throughout the nation, resurrected the call for a Congressionally chartered national bank.  In 1816, the (Second) Bank of the United States was created, again with a twenty-year charter. Twenty percent of the bank's capital stock was owned by the federal government, making it the largest shareholder. The remaining stock was owned by investors, located in both in the United States and Europe. Like the (First) Bank, it was headquartered in Philadelphia, eventually having twenty-five branches by 1832. The bank faced many early problems, including corruption and mismanagement of its monetary policies.  In 1823, Nicholas Biddle was appointed as the bank's third (and last) president. Biddle drastically improved the bank's management, and the institution began to thrive under is his leadership.  It survived a Supreme Court challenge to its constitutionality, and enjoyed support from the Treasury Department and generally a favorable public opinion. 


Despite this, newly elected President Andrew Jackson was determined to end the Bank of the United States.  Jackson strongly opposed Biddle and other pro-bank Republicans such as Daniel Webster and Henry Clay.  He had long shared the viewpoint that a central bank was an unconstitutional idea. He vetoed the bank’s re-charter legislation, and won his 1832 reelection against Clay campaigning upon an anti-bank platform.  Although the charter for the Bank of the United States was still valid until 1836, Jackson was able to effectively end the bank’s operations much earlier.  He directed the Treasury Department to remove federal deposits and revenue from the institution, placing the monies in “Pet banks”- smaller institutions that Jackson personally favored.  Biddle responded by inducing a short-lived financial crisis, but public and political backlash ended his efforts to renew the bank’s charter.  After its expiration in 1836, the private bank floundered, and was eventually dissolved in 1841.


The two charter periods of the Bank of the United States are important chapters in the nation's financial history, particularly with respect to understanding the role of central banking and the eventual creation of America's Federal Reserve System.

1791 Bank of the US Loan Receipt

1791 United States Loan Office Receipt to The Bank of the United States


Dated December 2, 1791


This example is a receipt issued from the U.S. Loan Office (Massachusetts) for sinking the national debt incurred by the Revolutionary War.  The transfer is of a loan certificate, (Six percent stock), of $372.58 made to the bank.

1794 Act of the Third Congress: First Session

Providing for the Payment of the Second Installment Loan due on a 

Loan made of the Bank of the United States


Approved June 4, 1794


This Act of the Third Congress provided for the U.S. Treasury to remit the proceeds of foreign loans to the Bank of the United States. The broadside was printed in Philadelphia by Francis Childs and John Swaine, the official printers to the United States. Broadsides of this Act (bearing the signature of the Secretary of State) would have been distributed to all thirteen States.  It is signed in type by the Speaker of the House, the President of the Senate, and the President of the United States.                                                                     

The full text of the Act reads as follows:


SEC. 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the President of the United States be, and he hereby is authorized and empowered to apply two hundred thousand dollars of the proceeds of foreign loans heretofore transferred to the United States, in payment of the second installment due to the Bank of the United States, upon a loan of the said bank, made pursuant to the eleventh section of the act for incorporating the subscribers to the said bank: And that the annual period for the payment of each installment of the said loan, shall be deemed to be the last day of December in each year.


SEC. 2. And be it further enacted, That a sufficient sum of the dividends, which have accrued, or which shall hereafter accrue, on the stock owned by the United States, in the Bank of the United States, be, and the same is hereby appropriated to the payment of the interest, which has, or shall become due, on the loan obtained, as aforesaid.

One of four known broadside printings of this Act


1797 Report of the Commissioners of the Sinking Fund Relative to the Sale of a Part of the

Capital Stock of the Bank the United States, Belonging to the United States


Dated January 26, 1797


In 1789, Alexander Hamilton established a sinking fund within the newly created Treasury Department to reduce the debt from the Revolutionary War. Selected sources of revenue were used to finance the sinking fund, including duties on imported goods, proceeds from public lands sales, and dividends from shares in the Bank of the United States. Commissioners were appointed to manage the fund, purchasing Treasury securities to reduce the nation's outstanding debt. The report begins with a short introduction by John Adams, along with remarks from then Secretary of the Treasury Oliver Wolcott. 


Rare copy, 1797, Printed by Order of the House of Representatives, F. Childs, Philadelphia

1805 Gallatin Letter (frank)_edited.png
Franking cover signed by Secretary Gallatin

1805 Treasury Department Correspondence 

Letter from Albert Gallatin, Secretary of the Treasury, to Thomas Willing, President of the Bank of the United States


Dated September 6, 1805


The (First) Bank of the United States served as the fiscal agent of the United States for its twenty-year charter period.  During part of this time, Albert Gallatin, a Swiss-born politician, served for 14 years as the nation's longest-serving Secretary of the Treasury. Gallatin was responsible for managing the nation through very difficult financial times, from managing the federal debt to paying for the War of 1812. Although he left office in February of 1814, he helped form the (Second) Bank of the United States, and is considered one of America's financial "Founding Fathers."  


Thomas Willing served as the first President of the Bank of the United States.  Willing had extensive political experience, serving as the Mayor of Philadelphia, a politician in Albany, a judge, and bank president.  Although he initially voted against the Declaration of Independence, Willing is remembered as a patriot who served the young nation in a variety of positions throughout his life.  The text of the letter reads as follows:

                  Sir, I have the honor to inform you that I intend to pay on the 30th inst. to the Bank of The United States the balance

                    of the loans obtained from that institution by the United States and amounting to seven hundred thousand dollars.


                                                                                                                                                                   I have the honor to be

                                                                                                                                                            respectfully Sir your obed’t servt.

                                                                                                                                                                         Albert Gallatin

1806 Bank of the United States Check

Four Hundred Dollars


Dated November 24, 1806


This example, numbered 391, represents a typical bank check drafted during the first charter of the bank.

1824 Bank of the U.S. Bill of Exchange

One Hundred Pounds Sterling


Dated November 19, 1824


This bill of exchange was similar to a check; it was a non-interest bearing note representing funds to be remitted at a specified date.  As negotiable instruments, bills of exchange were often traded by merchants and brokers, sometimes at a discount to their face value.  They were issued in multiple copies in case of loss or damage, only one note ultimately to be paid. This example was made out to the firm of Fletcher and Gardiner, renowned silversmiths of Philadelphia whose work was internationally known. This bill was drafted on the account of the famous London merchant bank, Baring Brothers & Co. Baring Brothers were the English banking agents used by the Bank of the United States, the U.S. Government, and many American merchants.  The bill bears the signature of Nicholas Biddle, president of the bank, along with a printer's mark of Murray, Draper, Fairman & Co.


A rare example of a Bill of Exchange from the chartered (Second) Bank of the United States

1826 Bank of the U.S. Bill of Exchange

Sixty-four Pounds, Fourteen Shillings Sterling


Dated December 18, 1826


This example, issued in 1826, represents the Third and Fourth copies of the original bill.  It is drafted against

the account of Baring Brothers & Co. of London, and was payable sixty days from its date of issue.

A rare example of a Bill of Exchange from the chartered (Second) Bank of the United States

1830 Bank of the US Capital Stock shares

1830 Bank of the United States Capital Stock Certificate

Forty Shares, Signed by Nicholas Biddle


Dated November 3, 1830


This example was issued to a James Benson of Worcestershire, England.

A rare example from the chartered (Second) Bank of the United States


1833 Treasury Department Correspondence

Letter from Louis McLane, Secretary of the Treasury, to 

Nicholas Biddle, President of the Bank of the United States


Dated April 10th, 1833


This letter served as a formal request by the Secretary of the Treasury, Louis McLane, for the bank to remit government funds to the Treasurer of the United States, John Campbell.  Secretary McLane would serve in this office for two years before President Jackson replaced him. McLane had conspired with Biddle to renew the charter of the bank, and would ultimately refuse Jackson's orders to remove the government's deposits in his effort to shut down the institution.  Jackson shuffled his Cabinet around, and appointed McLane to serve as his Secretary of State from May 29, 1833 to June 30, 1834. The text of this letter reads as follows:

Sir, I have to request that a bill in triplicate, in favor of John Campbell, Treasurer of the United States, for a sum in Sterling equal to Five Thousand at the current rate of Exchange, payable at a short sight, may be drawn and transmitted to this Department, accompanied with an account of the cost. As soon as the bill is received and the account examined, this amount will be remitted to the Bank.


                                                                                              I am very respectfully your obedient servant 

                                                                                                                        Louis McLane

                                                                                                               Secretary of the Treasury   

Copyright The Joe I. Herbstman Memorial Collection of American Finance 


All Rights Reserved

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