First Bank of the United States for kids: Alexander
Hamilton
The American Currency
History started in the Colonial Era, before the Revolutionary
War.
In 1790 Alexander Hamilton, the Treasury Secretary started to
formulate plans for the First Bank of the United States. He wanted
this to be a centralized institution, similar to the Bank of
England. The federal government would own 20% of the stock and have
two seats on the board of directors. The federal government would
also have the right to inspect the books at any time. But, like the
Bank of England of the time, it would otherwise be owned by its
stockholders. The First Bank of the United States, a National Bank,
was chartered for a term of 20 years, by the United States Congress
on February 25, 1791. The Bank bill stated that a "bank of the
United States" shall be granted limited legal rights in order to
manage the national finance, to obtain loans for the federal
government in case of sudden emergencies, and to promote trade and
industry. The National Mint was then
established and authorized by the Coinage Act of April 2, 1792
and also established the
silver dollar as the unit of money and lawful tender in the United
States of America.
First Bank of the United States for kids:
The Charter
The First Bank of the United States was issued a twenty-year charter
running from 1791 to 1811, after which time it would be up to the
Congress to approve, or deny, renewal of the bank and its charter.
First Bank of the United States for kids:
The State Banks
The First Bank of the United States, the National Bank, it was not
solely responsible for the nation's supply of bank notes. It was
responsible for only 20% of the currency supply - the state banks
accounted for the rest. It was the envy of state banks because,
although a commercial enterprise, it received all of the
government’s deposits including foreign customs duties, it could
make more loans and receive more interest payments. States were free
to charter however many intrastate banks they wished.
Opposition to the First Bank of the United States
There were many opponents to the First Bank of the United States,
notably Thomas Jefferson and James Madison. The opposition was that
centralization of power, moving away from private banks was
dangerous to a sound monetary system. It was also seen to be of
primary benefit to the business interests in the commercial north,
not the agricultural interests of the South. It was believed that it
benefited the wealthy at the expense of the American population. Jefferson and his supporters also argued that
the creation of such a bank violated the Constitution, as the
creation of a Bank of the United States or a government mint were
not listed among the expressed powers allowed to the federal
government.
Purpose of the First Bank of the United States
The Purpose
of the First Bank of the United States was to act as the federal
government’s fiscal (financial) agent:
● Collect
tax revenues
● Transfer
money
● Ensure the
government's funds were secure
● Make loans
to the government
● Make loans
and accept deposits of private citizens
● Pay the
bills of the government
● Pay the
interest payments to European investors
● Interest
rates were capped at 6%
Facts about the First Bank of the United States
Interesting History Facts about the History of the First Bank of the
United States are
detailed below.
Facts about the
History of the First Bank of the United States for kids
First Bank's History Fact 1:
Its twenty year
charter ran from February 25, 1791 to January 24, 1811.
Plans were initially formulated in 1790 by Alexander
Hamilton, secretary of the treasury
First Bank's History Fact 2:
The charter was
signed into law by President George Washington on
February 25, 1791
First Bank's History Fact 3:
It began operations
at the temporary premises at Carpenters’ Hall in
Philadelphia on December 12, 1791
First Bank's History Fact 4:
In 1792 it opened
branches in Baltimore, Boston, New York, Charleston
First Bank's History Fact 5:
The United States
government owned 20% of its capital but private
investors owned the rest - it was still a
privately held banking corporation.
First Bank's History Fact 6:
The bank started with
capitalization of $10 million - $2 million was held by
the government and the remaining $8 million by private
investors
First Bank's History Fact
7: The institution was
answerable to the US Treasury and Congress and subject
to Treasury Department inspection
First Bank's History Fact
8: The institution
comprised of 25 directors, including some senators and
congressmen
First Bank's History Fact
9: The first president
of the institute was Thomas Willing, who had been
president of the Bank of North America
First Bank's History Fact
10: It was the only
banking institute permitted to have offices across the
nation.
First Bank's History Fact 11:
When making loans the
borrower either had their account credited or were given
“banknotes, redeemable in specie”
First Bank's History Fact 12:
First Bank notes were
the only ones accepted for payment of federal taxes.
First Bank's History Fact 13:
Foreigners were
allowed to be First Bank of the United States
stockholders, but were not be allowed to vote
First Bank's History Fact 14:
After 20 years in
existence, the charter for renewal was defeated by one
vote.
The bill to re-charter failed in the House of
Representatives on January 24, 1811.
First Bank's History Fact 15:
Stephen Girard
purchased the premises and most of the stock in
the First Bank of the United States and opened his own
bank, later known as Girard Bank
First Bank's History Fact 16:
The need to open the
Second Bank of
the United States
arose when the
War of 1812
erupted
Facts about the
History of the First Bank of the United States for kids
First Bank of the United States for kids - President George Washington Video
The article on the
First Bank of the United States provides an overview of one of the Important
institutions established during the presidency of
George Washington. The following video will give you additional important facts, history and dates about the political events experienced by the 1st
American President whose presidency spanned from April 30, 1789 to March 4, 1797.
First Bank of the United States
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Interesting Facts about the
First Bank of the United States for kids and schools
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First Bank of the United States for kids
●
First Bank of the United States, one of the Important
events of the era
●
George Washington Presidency from April 30, 1789 to March 4, 1797
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Fast, fun, interesting facts about the First Bank of the
United States
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Foreign & Domestic
policies of President George Washington
● George Washington Presidency and
George Washington First Bank of the United States for schools,
homework, kids and children |