First Bank In AMERICA

In 1791, former Morris aide and chief advocate for Northern mercantile interests, Alexander Hamilton, the Secretary of the Treasury, struck a deal with Southern lawmakers to ensure the continuation of Morris's Bank project; in exchange for support by the South for a national bank, Hamilton agreed to ensure sufficient support to have the national or federal capitol moved from its temporary Northern location, New York, to a Southern location on the Potomac. As a result, the First Bank of the United States (1791–1811) was chartered by Congress within the year and signed by George Washington soon after. The First Bank of the United States was modeled after the Bank of England and differed in many ways from today's central banks. For example, it was partly owned by foreigners, who shared in its profits. Also, it wasn't solely responsible for the country's supply of bank notes. It was responsible for only 20% of the currency supply; state banks accounted for the rest. Several founding fathers bitterly opposed the Bank. Thomas Jefferson saw it as an engine for speculation, financial manipulation, and corruption.[1] In 1811 its twenty year charter expired and was not renewed by Congress. Absent the federally chartered bank, the next several years witnessed a proliferation of federally issued Treasury Notes to create credit as the government struggled to finance the War of 1812, and a suspension of specie payment by most banks soon followed.