First Bank of the United States

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Bank facade

The First Bank of the United States was proposed by Alexander Hamilton to relieve the war debt from the United States Revolutionary War, develop a national currency, and dispose of the western territories. Housed in Philadelphia, Pennsylvania (in Carpenters' Hall for several years) when that city was the capital, it was designed by Samuel Blodgett and James Windrim. It was chartered in 1791 for 20 years, and thus expired in 1811. It followed the Bank of North America and it was succeeded by the Second Bank of the United States.

The establishment of the bank raised early questions of constitutionality in the new government. Hamilton, then Secretary of the Treasury, argued that the Bank was an effective means to achieve the authorized powers of the government implied under the Necessary and Proper clause of the constitution. Secretary of State Thomas Jefferson argued that the Bank violated traditional property laws and that its relevance to constitutionally authorized powers was weak.

Tenets the bank was based on include:

Sound finance, with a balanced government budget, except during wartime emergency
Sound banking, with reserves in gold and silver
Being a lender of last resort
The currency notes issued could serve as instruments of national policy
Regulating the national economy

The First Bank of the United States in Philadelphia, Pennsylvania.

The First Bank of the United States (BUS) was very controversial. Many protested this bank, saying that it was never specified in the Constitution. People who favored the bank, however, stated that the Constitution never forbade a national bank (implied powers), and therefore the federal government was able to make one. This, along with many other controversies, helped spawn the first two political parties. The Federalist party, supported by Hamilton, favored a national bank, whereas the Jeffersonian Democratic-Republicans, led by Jefferson and Madison, strongly opposed it.