Bank+of+the+United+States

The first Bank of the United States was founded in 1791 by the first secretary of state, Alexander Hamilton. He argued that the United States needed a chartered bank to establish public credit, increase foreign investment, authorize power over national finances, and gain support of the new government from wealthy citizens. Congress approves a charter for the bank, even though there was an argument that the establishment of a central bank was not found in the Constitution. There was a head office in Philadelphia as well as branches located in eight other cities. Because the government was the largest stockholder, they shared the profits with the bank, however they had no participation in the Bank of the United States. By the time the renewed debate in Congress, the Federalists were not in control. The Democratic-Republicans had the control and were ready to act against the Federalists and the national bank. In 1811, Congress voted to abandon the charter for the Bank of the United States.
 * __Background Information:__**

The Democratic-Republican Party evolved from the Anti-Federalist group that opposed the many policies of Alexander Hamilton. Thomas Jefferson and James Madison were a part of the Democratic-Republican party. They favored states' rights and strictly followed the Constitution. They were in opposition to a national bank and wealthy interests.

Within the first two months of opening its doors, the Bank of the United States was flooding the market with loans and banknotes. Most loans were targeted to be paid off and new investors were brought in to try and make money. As the stocks started to rise, there was sharp decline in the stock market, causing people to forcable sell their stocks. One example of this is William Duer Democratic-Republicans looked down on the Bank's conservative policies and the fact that a large portion of stock was held by the Bank of England and other foreign countries. Jefferson based his argument about the legality of the bank off of the tenth amendment. Even though the amendment was not yet a part of the constitution, it stated that any rights that are not listed as federal laws are reserved as rights of the states. The Democratic-Republicans believed the south would not benefit from a bank because most of the business interests were focused on commercial aspects in the north, whereas in the south, the focus was on agriculture. He also believed that if there was a national bank, there would be a monopoly because there would be no economic competition within the nation.
 * __Jefferson's Viewpoint:__**

"Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe despositories." -- If the Bank of the United States was supposed to help get rid of debt, how can you explain the Panic of 1792 and its outcome?
 * __Questions:__**

Primary Sources