The American Banking System from 1800-1810
Looking back to the outset of the 19th century, it is impossible to say that any real banking system had really been developed in the US. This is to say that, though there were roughly 120 private commercial banks that had been chartered by new state governments, the so-called system was scarcely organized. It was ad hoc in nature and directly linked to the merchant banking practices of the pre-independence period. The years preceding the turn of the century were important because they brought a central banking authority onto the scene. In 1789 the new federal government established a position for the Secretary of the Treasury. As we know, the first to hold this prestigious title was Alexander Hamilton. He accomplished a great deal in the 11 years leading up to the year 1800. Most notably his actions were largely responsible for the creation of the First Bank of the United States, which was given a charter in 1791. This thrust towards central banking was only to last 20 years, however. Up for review in 1811, the bank’s charter was not renewed.
This paper will argue that the failure to renew the First Bank of the United State’s charter was a direct result of the strong ideological differences between state centered and federalist politics. Many were very skeptical about a strong centralized banking system, while others believed that the only way to create unity in the country was through a highly focused central banking system. Despite the relative efficiency of the First Bank of the United States, and despite the fact that it is widely considered to be a success by economic historians, the general suspicion of banking led to its demise. In other words, this paper will argue that the 1800-1810 period was one of exhaustive tension between centralists and de-centralists. This had important and lasting effects on the banking system, the most obvious being that, in the following century, state banks proliferated to the point where they were chartered with abandon. As John K. Galbraith noted, “every location large enough to have a church, a tavern, or a blacksmith shop was deemed a suitable place for setting up a bank. These banks issued notes, and other, more surprising enterprises, imitating the banks, did likewise. Even barbers and bartenders competed with banks in this respect” (Flaherty, 1997: http://odur.let...
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...institution, and based on the bitter conflicts between Madison and Hamilton over state vs. federal power, the bank itself became politicized. As state-led forces increased their popularity, it is wholly unsurprising that the First Bank of the US was one of the first things to go.
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Del Mar, Alexander. “History Of Monetary Systems: Chapter XVII: Bank Suspension Since The Era Of Private Coinage” History of the World, 01-01-1992
Foner, Eric., Garraty, John A (eds) “Banking” The Reader’s Companion to American History, Houghton Mifflin: New York, 1991., pg. 191
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The Second Bank of the United States opened in 1816 under the presidency of James Madison and was located in Baltimore, Maryland. The primary idea of the federally operated bank was to maintain
He states that the financial system was based on competing state banks with no central bank which promoted a rapid economic growth. As the American banking system developed the money supply developed with it. The federal government began the banking system through the issuing of specie but as the capitalist system developed the banking structure developed as well. During the Civil War, the North printed Greenbacks that drove gold from the domestic circulation to help pay for war necessities. The Greenbacks, however, were rarely used in the South expressing the different economies of the North and the South at the time of the Civil War. With differing economies and the growth of specie and paper money, Brands argues that the basis of knowledge about the money system of this time lays a foundation for how Carnegie, Rockefeller, and others were able to manipulate the market and gain wealth. Leading into price manipulation by those in corporate
As the new century approached, a national crisis began to develop in the United States. The nation faced a severe depression, nationwide labor unrest and violence, and the government’s inability to fix any of the occurring problems. The Panic of 1893 ravaged the nation and became the worse economic crisis of its time. The depression’s ruthlessness contributed to social unrest and weakened the monetary system’s strength, leading to a debate over what would be the foundation of the national currency. As the era ended, the US sought to increase its power and strength.
The issue of whether or not America should have a National Bank is one that is debated throughout the whole beginning stages of the modern United States governmental system. In the 1830-1840’s two major differences in opinion over the National Bank can be seen by the Jacksonian Democrats and the Whig parties. The Jacksonian Democrats did not want a National Bank for many reasons. One main reason was the distrust in banks instilled in Andrew Jackson because his land was taken away. Another reason is that the creation of a National Bank would make it more powerful than...
During his term as secretary of the treasury, he acted with the power and commanding force of a Prime Minister. None of the other founding fathers contributed as much to the economy’s growth, and the shape of the country in general, as he did. Alexander Hamilton was the most influential of the United States’ early politicians in the development of the country’s economy. One of the earliest examples of Hamilton’s power was his role in the national assumption of state debts. After the Revolutionary War, individual states had varying amounts of debt.
Going hand in hand with his detestation of large, extremely controlling national governments, Jefferson was intent on having no national bank present in the US, but Hamilton was certain the country would benefit from one. For example, in a personal letter written by Alexander Hamilton, he wrote, “Mr. Madison, co-operating with Mr. Jefferson, is at the head of a faction, decidedly hostile to me, and my administration; and actuated by views... subversive of the principals of good government, and dangerous to the Union... Mr. Jefferson... [displays] his dislike of... funding [the] debt.” (Doc 2) Hamilton implied that by not advocating a national bank, Jefferson did not want to help the country pay off its debt. Jefferson, however, was dead set against having a national bank because he wanted the common people, such as the farmers, to have maximum influence on the government. This way, a strong central government could not have supreme political, economic, and social power, all of which together would open the doors for future corruption, even if the government was set up in the manner directed in the Constitution. Jefferson defended this judgement to the extent that he formed a political party so it could develop into a well-supported suggestion. Thus, the perspective on national banks could more efficiently progress into the point where it impacted the whole country and prevented the formation of a national bank. Equally, the excise tax proposed by Alexander Hamilton and carried out by Congress, factored in on Hamilton and Jefferson’s feud on having a national bank. In a letter written by Thomas Jefferson, he manifested his reaction to the excise tax by commenting, “The excise tax is an infernal one... [the public’s]
One such issue was that of the National debt and creating a National Bank. In 1790, Alexander Hamilton proposed that Congress should establish a national bank, in which private investors could buy stock, could print paper money, and keep government finances safe. Washington signed the bill establishing a national bank and started a strong foundation for a thriving economy and a stable currency.
Sosin, Jack M. "Imperial Regulation of Colonial Paper Money, 1764–1773". Pennsylvania Magazine of History and Biography, Volume 88, Number 2 (April 1964), 174–98.
In the summer of 1832 and Congress renewed the Bank’s charter even though it wasn’t due until 1836. Jackson hesitated to approve of the charter, so Henry Clay and Nicholas Biddle went on the offensive to attempt to persuade Jackson to pass the bill. Jackson, having had his opinion on the banks cemented by Clay’s presence in the organization, then committed to de-establishing the Second National Bank. He waged war against Biddle in particular to make sure Biddle lost power. He vetoed the bank bill, and after winning the race to be reelected, he closed Biddle’s bank. He ordered his Secretary of the Treasury to move money from the Second National Bank to smaller, state banks. When Congress returned from its summer recess, it censured him for his actions. In 1836, Bank of US was dead, and the new democratic-congressmen expunged Jackson’s censure. Because Jackson had no formal plan for managing the nation’s funds after the Second National Bank closed, it caused problems in Van Buren’s administration. He destroyed the Bank of the United States, in the main, for personal reasons. Jackson hated the bank before his presidency because as a wealthy land and slave owner he had lost money due to its fiscal policies. He believed that Congress had no right under the constitution to charter a
Following the failure of the Articles of Confederation, a debate arose discussing how a centralized government ought to be organized. The prevailing opinion ultimately belonged to the Federalists, whose philosophy was famously outlined in The Federalist Papers. Recognizing that in a free nation, man would naturally divide himself into factions, they chose not to remedy this problem by stopping it at its source; instead, they would limit its effects by placing strict structural safeguards within the government's framework. The Federalists defined a facti...
Friedman, Milton and Jacobson Schwartz, Anna. A Monetary History of the United States, 1867-1960. Princeton, 1963
He shows this by simply ripping Grendel’s arm off in fight between them. Also Beowulf shows him being strong by purposefully opening up the hall again to make the monster come so he can kill it. “He might think less of me if I let my sword go where my feet were afraid to, if I hid behind some broad shield: my hands alone shall fight for me, struggle for life against the monster.” (265-269). He exemplified great courage when he defeated Grendel and his mother to save Hrothgar's kingdom. Also Beowulf really shows strength just by being able to fight everyone and protect the town all by himself. No one else wanted to help the townspeople or had the courage to do so, so Beowulf is really strong in all aspects, mind and body. This is exactly how Beowulf was really
It is a daunting task to come across one person on Earth that meets Beowulf-like expectations for heroism. Beouwulf is simply a multi-dimensional hero in a fictional setting while regular people usually do not have those have those odds working in their favor. However, if Beowulf’s remarkable personality traits are placed in different categories for heroes rather than grouped together, then it is easier to pinpoint the great warriors of our time.
Popular culture can be defined as the general accepted culture in society. Anyone can learn about what is the generally accepted culture in America because it’s usually advertised in music, books, fashion, literature, schools and the mass media to name a few. In the book images of color, images of crime, chapter 1 shows how Indians have been negatively affected by popular culture throughout the years. However, I would say that many races have been affected by popular culture to the point in which the identity and the heritage of different culture is rapidly disappearing.
The invention of money was a major improvement in peoples’ lives. In the past, people usually had to travel all day to find the person who is willing to exchange their goods. In addition, the goods people want to exchange did not have the standard value of measurement. This led to unequal exchanges. Furthermore, it is not convenient to carry heavy goods from one place to another for an exchange. To solve these issues, money will be the only solution. Later, people tend to develop money from cowry shells to credit cards for the convenience and to improve their society.