About The First and Second Banks of the United States Project
The Bank of the United States (now commonly referred to as the First Bank of the United States) was proposed by
Alexander Hamilton, Secretary of the Treasury, at the first session of the First Congress in 1790. The bill was
signed into law by President George Washington, and the First Bank of the United States opened for business in
Philadelphia in 1791 with a 20-year charter.
The First Bank acted as the federal government's fiscal agent by collecting tax revenues, securing the government's funds, making loans to the government, paying the government's bills, and managing the Treasury's interest payments to European investors in U.S. government securities. The bank also accepted deposits from the public and made loans to private citizens and businesses. The bank's notes were backed by gold reserves and allowed for a stable currency. The First Bank's charter expired in 1811, and renewal of the charter was defeated by one vote in both the House and the Senate.
The Second Bank of the United States was created when President James Madison and Albert Gallatin, Secretary of the Treasury, found the government unable to finance the country's military operations and other fiscal operations in the inflationary period during and after the War of 1812. In response, Madison and Congress agreed to form the Second Bank of the United States. In 1816, five years after the First Bank closed, the Second Bank of the United States was chartered, again for 20 years, patterned after the First.
During September 1833, President Andrew Jackson issued an executive order that ended the deposit of government funds into the Bank of the United States. After September 1833, these deposits were placed in the state chartered banks. When the time came, President Jackson opposed the charter's renewal. Reasons for opposition revolved around a belief that bestowing power and responsibility upon a single bank was cause for inflation and corruption, coupled with the belief that specie (gold or silver) was the only true money. In 1836 the charter officially expired, and the Second Bank of the United States was transformed into a state bank in Philadelphia, before permanently closing five years later.
The bulk of this collection, which consists primarily of speeches and Congressional hearings, was digitized by the Federal Reserve Bank of Philadelphia. The original documents, which have been bound into six volumes, are currently held by the Research Library at the Federal Reserve Bank of Philadelphia. Also included in these six volumes are documents relating to the Independent Treasury System set up after the close of the Second Bank of the United States for the purpose of retaining government funds. These original documents contain light ink on dark paper, as well as pages with missing text. We have created the best digital image possible from these documents. Additionally, documents relevant to the First and Second Banks have been extracted from the American State Papers, digitized by the Library of Congress, and been made available through this collection. Additional materials deemed relevant to the collection have been added from other sources.