First Bank of the United States Facts & Worksheets

The President, the Directors, as well as Company of the Bank of the United States, also referred to as the First Bank of the United States, had been a national bank designated mostly by the United States Congress on February 25, 1791, for a term of twenty years.

See the fact file below for more information on the First Bank of the United States, or you can download our 30-page First Bank of the United States worksheet pack to utilize within the classroom or home environment.

Key Facts & Information

HISTORICAL BACKGROUND

• Alexander Hamilton believed that a national bank was required to strengthen and improve the nation’s credit, as well as to improve the handling of the United States government’s financial business under the newly enacted Constitution.
• The First Bank building, located within Independence National Historical Park in Philadelphia, Pennsylvania, and a national landmark for its historical and architectural implications.
• The Bank of the United States was established in 1791 as one of three significant financial developments suggested and endorsed by Alexander Hamilton. Aside from the national bank, other measures included the federal government’s assumption of state war debts, the establishment of a mint, and the imposition of a federal excise tax. The three goals of Hamilton’s measures were to:
• Create financial order, clarity, and legal precedent in the founding of The United States. 
• Establish credit for the new nation both domestically and internationally. 
• Resolve the issue of the “Continental” fiat currency issued by the Continental Congress before and during the American Revolutionary War.
• Hamilton’s four objectives were as follows:
  • Allow the federal government to assume the various states’ Revolutionary War debts.
  • Pay off your war debts.
  • Raise funds for the new administration.
  • Create a national bank and a common currency.
• On the other hand, The First Bank banknotes provided the United States with an extent similar to a national currency when each financial institution could print its banknotes.

HAMILTON PROPOSAL

• According to Hamilton’s plan presented to the First Congress, the initial funding for the First Bank of the United States would be established by selling $10 million in stock, with the United States government purchasing the first $2 million shares.
• Predicting the objection that this was not done because the U.S. government lacked $2 million, Hamilton proposed that the government buy the stock with money lent to it by the bank, with the loan to be paid back throughout ten equal annual installments. Furthermore, the remaining $8 million in stock would be offered to the general public, both within the United States and internationally.
• Furthermore, one-quarter of the purchase price for these non-government commodities had to be paid in silver or gold; the remaining amount might be created in bonds, stamps, or even other acceptable forms of payment.
• In contrast to the Bank of England, the bank’s primary purpose was to extend credit to the government and the private sector interests for funding and other economic development, through Hamilton’s Public Credit system.
• Other non-negotiable requirements existed for establishing the First Bank of the United States. These were some of them:
• That the bank would have a twenty-year charter from 1791 to 1811, after which time it would be up to Congress to approve or deny renewal of the bank and charter; however, no other federal bank would be authorized during that time; states, on the other hand, would be free to charter as many intrastate banks as they wished.
• To avoid the appearance of impropriety, the bank would: 
  • be prohibited from purchasing a government bond
  • have a mandatory director rotation
  • does not issue notes or incur debts in excess of its actual capitalization.
• That foreigners, whether living abroad or in the United States, would be permitted to own stock in First Bank of the United States but would not be permitted to vote.
• That the Secretary of the Treasury would be free to withdraw government deposits, inspect the books, and demand statements on the bank’s condition as often as once a week.
• Hamilton reintroduced a proposal he made nearly a year ago: raise the duty on imported spirits and the excise tax on domestically distilled whiskey and other liquors. The Whiskey Rebellion erupted in response to local opposition to the tax.
• An additional source of funding was required to guarantee that the government could fulfill both current and future demands of its governmental accounts, “for interest charges on the assumed budget deficits would begin to fall due at the end of 1791, but an additional $38,291 was needed to cover deficits in the finances that had been appropriated for existing commitments.”

OPPOSITION

• Hamilton’s bank proposal was met with widespread opposition from opponents of expanded federal power. The opposition was led by Secretary of State Thomas Jefferson and James Madison, who claimed that the bank was unconstitutional and benefited merchants and shareholders at the expenditure of most people.
• They believed that centralizing power away from local banks was unsafe for a sound financial system. They primarily benefited business interests in the commercial north rather than southern agricultural interests, contending that these proposals would violate the right to own property.
• Furthermore, they claimed that the establishment of such a bank was a violation of the Constitution, which explicitly mentioned that Congress was to restrict weights and measurements and issue coined money.
• The first part of the bill, the concept, and establishment of a national mint, was met with no real opposition and navigated through; it was assumed the second and third parts (the bank and an excise tax to finance it) would also glide around, and in their own way they did: the House proposed bill easily passed despite some heated objections.
• For example, the Senate version of the legislation did the same thing, but with far fewer and milder objections. It was when “the two bills changed houses; complications arose; in the Senate, Hamilton’s followers raised objections to the House’s alteration of the excise tax plans.”
• The establishment of the bank also brought up early constitutional concerns in the new government. Hamilton, then Secretary of the Treasury, argued that the bank was an efficient way to use the government’s authorized powers implied by the law of the Constitution.

PRESIDENTIAL APPROVAL

• George Washington expressed reservations about signing the “bank bill” into law at first. Washington requested written advice and justifications from all his cabinet officials (most particularly from Hamilton). 
• The bill was deemed unconstitutional by Virginia Attorney General Edmund Randolph. Jefferson also affirmed that Hamilton’s proposal violated the Constitution’s spirit and letter. Hamilton, who, unlike his fellow cabinet members, was from New York, responded quickly to those who claimed the bank’s incorporation was unconstitutional. 
• Furthermore, on February 25, 1791, convinced that the measure was authorized by the constitution, Washington signed the “bank bill” into law.
• Washington appointed three Commissioners to take memberships for this new bank on March 19, 1791: Thomas Willing, David Rittenhouse, and Samuel Howell.
• Willing was elected President on October 25, 1791, and served until his resignation due to illness on November 10, 1807. He was succeeded by David Lenox, who served until the charter expired on March 4, 1811.

CHARTER OF THE FIRST BANK OF THE UNITED STATES

• When Hamilton left office in 1795, the latest Secretary of the Treasury, Oliver Wolcott, Jr., informed Congress that more funds were required due to the current state of government finances. This could be accomplished by either selling the government’s bank stock or raising taxes.
• When the charter for the First Bank of the United States expired in 1811, Stephen Girard bought the majority of its stock, as well as the building and furnishings on South Third Street in Philadelphia, and established his own bank, which became known as Girard Bank. Girard hired George Simpson, the store clerk of the First Bank of the United States, as the new bank’s cashier, and on May 18, 1812, the new bank opened for business with seven other employees.

BANK BUILDING

• From 1790 to 1800, Philadelphia, Pennsylvania, served as the nation’s capital, and the First Bank of the United States was established there. In 1791, the bank opened its doors in Carpenters’ Hall, about 200 feet from its current location.
• The bank building was designed by Samuel Blodgett, Superintendent of Buildings for Washington DC’s new capital, though it has also been attributed to James Hoban. It was finished in 1795.
• The First Bank of the United States has been designated a historic structure several times. When Independence National Historical Park was established in 1956, it was included. Furthermore, the architecture of the building was analyzed by the Historic American Buildings Survey in 1958. It was added to the National Register of Historic Places on October 15, 1966, along with the rest of Independence National Historical Park, and the bank was designated a National Historic Landmark on May 4, 1987. The landmark designation describes it as an initial masterwork of momentous Classical Revival design.
• When funding from the state of Pennsylvania was not forthcoming, a proposal to house the collection of the Philadelphia Civil War Museum was dropped. Future plans for the building include housing the National Park Service archaeology lab, which is currently located across the street.

First Bank of the United States Worksheets

This fantastic bundle includes everything you need to know about the First Bank of the United States across 30 in-depth pages. These ready-to-use worksheets are perfect for teaching kids about the First Bank of the United States, which had been a national bank designated mostly by the United States Congress on February 25, 1791, for a term of twenty years.

Complete List of Included Worksheets

Below is a list of all the worksheets included in this document.

1. First Bank of the United States Facts 
2. Hamilton Maze
3. Bank Codes
4. The Bank Bill Approval
5. The National Bank
6. Hamilton’s Plan
7. Opposition in Proposal
8. #Bank_Pic
9. In Various Fields
10. HIGHLIGHT & INSIGHT
11. Design Your Own Bank

Frequently Asked Questions

When was the First Bank of America established?

The First Bank of America was established in 1791.

What was the main purpose of the First Bank of America?

The main purpose of the First Bank of America was to stabilize the nation’s finances and establish a standard currency. It also played a significant role in funding the government.

Who was the first president of the First Bank of America?

The first president of the First Bank of America was Alexander Hamilton.

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