The First Bank of the United States: Banking Profiles
Executive Summary
- The First Bank of the United States was created as a private central bank after the American Revolution.
Introduction
This was the first attempt of the private banking interests to take over US money creation. Its charter renewal was blocked in party by the efforts of James Madison. Bank’s stockholders were kept secret initially, but upon dissolution, it was discovered 80% of the stockholders were foreign banks. A major stockholder being the Bank of England that was controlled by the Rothschilds.
The creation of the First Bank of the United States was the subject of great debate. This is explained in the following quotation.
These fears of centralized banking would continue for generations. They would erupt in full force during the debates over the First Bank and the Second Bank of the United States. The national dialogue involved in the chartering of these two banks became deeply charged and highly consequential for both their friends and foes and caused so much anxiety and debate that a national bank was twice created and twice defeated. The First Bank of the United States, championed by Alexander Hamilton, approved by President George Washington, and opposed by Thomas Jefferson and James Madison, was given a twenty-year charter in 1791. When the charter expired in 1811, the Populist proagrarian opponents won over the commercial class’s advocacy by a single vote, and the bank was dead.29 Increasingly, fears of bank power clashed with economic efficiency. The national government needed credit, and a uniform currency aided by a national bank was the only way to achieve it. This caused one early opponent, James Madison, to change his mind about banking once he became president. After the War of 1812, the fiscal state of the nation was in disarray, and President Madison pushed for a second national bank. The Second Bank of the United States was chartered in 1816. Madison used the bank to fund the government after the war and restore fiscal order, but the bank never became popular or widely accepted, in part thanks to President Andrew Jackson leading a vehement opposition to the bank, referred to as a “bank war.” Jackson used his executive power to remove the bank’s funds, and the bank fought back by calling in its loans and bankrupting many banks in the country. The dispute was best described by Jackson himself: “The bank is trying to kill me, but I will kill it.”Jackson shared Jefferson’s agrarian disdain for banks and was concerned that the national bank would concentrate financial power and influence to the detriment of the “common man.”
Source: How the Other Half Banks
https://www.amazon.com/How-Other-Half-Banks-Exploitation/dp/0674286065
This underscores the point that James Madison did not understand banking. He never needed to create a bank, as the US never needed to borrow any money. It is impossible to have a need to borrow something that you can create. This fact is hidden from politicians by bankers.