Bank of North America
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The Bank of North America was a private business chartered on December 31, 1781 by the Congress of the Confederation
Congress of the Confederation
The Congress of the Confederation or the United States in Congress Assembled was the governing body of the United States of America that existed from March 1, 1781, to March 4, 1789. It comprised delegates appointed by the legislatures of the states. It was the immediate successor to the Second...
and opened on January 7, 1782, at the prodding of Superintendent of Finance
Finance minister
The finance minister is a cabinet position in a government.A minister of finance has many different jobs in a government. He or she helps form the government budget, stimulate the economy, and control finances...
Robert Morris. This was thus the nation's first de facto central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
. It was succeeded in its role as central bank by the First Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
in 1791. The Bank of North America along with the First Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
and The Bank of New York
Bank of New York
The Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007...
obtained the first shares in the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
.
After Robert Morris became superintendent of finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
in May 1781, continental currency had ceased to be issued. Earlier, on April 30, 1781, Alexander Hamilton
Alexander Hamilton
Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...
, then only twenty-three years old and still serving in the military, had sent Morris a letter. First, Hamilton revealed that he had recommended Morris for the position the previous summer when the constitution of the executive was being solidified. Second, he proceeded to lay out a proposal for a National Bank. Morris, who had corresponded with Hamilton previously (1780) on the subject of funding the war, immediately drafted a legislative proposal based on Hamilton's suggestion and submitted it to the Congress. Morris persuaded Congress to charter the Bank of North America, the first private commercial bank in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
Meanwhile, Hamilton made public endorsement of the establishment under his pseudonym:
Congress have wisely appointed a superintendent of their finances,—a man of acknowledged abilities and integrity, as well as of great personal credit and pecuniary influence.
It was impossible that the business of finance could be ably conducted by a body of men however well composed or well intentioned. Order in the future management of our moneyed concerns, a strict regard to the performance of public engagements, and of course the restoration of public credit may be reasonably and confidently expected from Mr. Morris' administration if he is furnished with materials upon which to operate—that is, if the federal governmentFederal government of the United StatesThe federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
can acquire funds as the basis of his arrangements. He has very judiciously proposed a National Bank, which, by uniting the influence and interest of the moneyed men with the resources of government, can alone give it that durable and extensive credit of which it stands in need. This is the best expedient he could have devised for relieving the public embarrassments, but to give success to the plan it is essential that Congress should have it in their power to support him with unexceptionable funds. Had we begun the practice of funding four years ago, we should have avoided that depreciation of the currency which has been pernicious to the morals and to the credit of the nation, and there is no other method than this to prevent a continuance and multiplication of the evils flowing from that prolific source.
- 'The Continentalist' No. IV, August 30, 1781
Robert Morris deposited large quantities of gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
and silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
coin and bills of exchange obtained through loans from the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. He then issued new paper currency backed by this supply. He also managed to meet the interest obligations on the debt which he estimated to be about thirty million dollars. Accordingly, Thomas Goddard has called him "the father of the system of credit, and paper circulation, in the United States." Although able to operate nationwide, the Bank of North America primarily operated in three states, and in 1785 it lost its central bank status in Pennsylvania due to objections of "alarming foreign influence and fictitious credit", favoritism to foreigners and unfair competition against less corrupt state banks issuing their own bills of credit, such that Pennsylvania's legislature repealed its state charter on 13 September 1785. After a change of party in Pennsylvania's legislature in 1786 the Bank of North America was re-chartered within the Commonwealth in 1787, but under more restrictive conditions that would hinder it from performing its intended role as a central bank.
The Bank of North America opened in Montreal on March 8, 1837.
Bank of Pennsylvania
John Nixon was the first director of the Bank of PennsylvaniaBank of Pennsylvania
The Bank of Pennsylvania was established on July 17, 1780, by Philadelphia merchants to provide funds for the Continental Army during the American Revolutionary War...
. Morris subscribed 10,000 pounds sterling to fund it. It was not a bank in the ordinary sense but an organization formed for the purpose of financing supplies for the army. In 1782, the Bank of North America superseded the Bank of Pennsylvania. Serving from 1792 to 1808, Nixon succeeded the first president of the Bank of North America, Thomas Willing
Thomas Willing
Thomas Willing was an American merchant and financier and a Delegate to the Continental Congress from Pennsylvania....
, who went on to become the first president of the First Bank of the United States
First Bank of the United States
The First Bank of the United States is a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.-Banking History:...
. William Frederick Havemeyer was its president from 1851 to 1861 and brought it successfully through the crisis of 1857. After it had become a National Bank
National bank
In banking, the term national bank carries several meanings:* especially in developing countries, a bank owned by the state* an ordinary private bank which operates nationally...
in 1865, a president of the same name presided over its liquidation in 1908.
The Bank of Pennsylvania was re-established in 1793, with a charter from the Commonwealth of Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
, and branches were opened in Pittsburgh, Harrisburg
Harrisburg, Pennsylvania
Harrisburg is the capital of Pennsylvania. As of the 2010 census, the city had a population of 49,528, making it the ninth largest city in Pennsylvania...
, Lancaster
Lancaster, Pennsylvania
Lancaster is a city in the south-central part of the Commonwealth of Pennsylvania. It is the county seat of Lancaster County and one of the older inland cities in the United States, . With a population of 59,322, it ranks eighth in population among Pennsylvania's cities...
, Reading
Reading, Pennsylvania
Reading is a city in southeastern Pennsylvania, USA, and seat of Berks County. Reading is the principal city of the Greater Reading Area and had a population of 88,082 as of the 2010 census, making it the fifth most populated city in the state after Philadelphia, Pittsburgh, Allentown and Erie,...
, and Easton
Easton, Pennsylvania
Easton is a city in Northampton County, Pennsylvania, United States. The population was 26,800 as of the 2010 census. It is the county seat of Northampton County....
. The original branch of the Bank of Pennsylvania remained in business in Pennsylvania through the 19th and 20th centuries under a variety of other names including First Pennsylvania Bank and, before its acquisition by Wachovia
Wachovia
Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo in 2008, Wachovia was the fourth-largest bank holding company in the United States based on total assets...
, CoreStates
CoreStates
CoreStates Financial Corporation was a United States bank holding company in the Philadelphia, Pennsylvania, metropolitan area.The bank, previously known as PNB , was renamed in the mid-1980s after a series of mergers...
, and through this acquisition Wachovia operates under national bank charter #1. Wachovia still (as of July, 2010) operates a branch at the northwest corner of S. 6th and Chestnut Sts. in Philadelphia, diagonally opposite Independence Hall
Independence Hall
Independence Hall is the centerpiece of Independence National Historical Park located in Philadelphia, Pennsylvania, United States, on Chestnut Street between 5th and 6th Streets...
, which was the original site of the Bank of North America. This branch is the longest continuously operating branch bank in the United States, operating in that location since 1781. Ironically, Wachovia merged in 2001 with North Carolina's First Union Bank, which also numbers among its predecessors the Bank of North America. Following Wells Fargo's
Wells Fargo
Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
acquisition of Wachovia, Wells Fargo adopted Charter #1.
External links
- Legislative and documentary history of the Bank of the United States: including the original Bank of North America, by Matthew St. Clair Clarke and David A. Hall. This collection of documents was aimed to include the entire proceedings, debates, and resolutions of Congress relating to the Bank of North America, the First (1791-1811) Bank of the United States, and the Second (1816-1836) Bank of the United States. These documents were compiled four years before the closing of the Second Bank.
- Legislative and documentary history of the banks of the United States, from the time of establishing the Bank of North America, 1781, to October 1834; with notes and comments, by R. K. Moulton. An attempt to compile all the public documents considered to be essential in attaining a thorough knowledge of the national banking operations of the United States, from 1781 to 1834.