Why was the first bank of united state chartered?and why was the charter of each allowed to expire? |
Why was the first bank of united state chartered?and why was the charter of each allowed to expire? |
The First Bank of the United States was needed because the government had debt from the Revolutionary War and each state had a different form of currency. Alexander Hamilton conceived of the bank to handle the war debt and to create a standard form of currency.
After Hamilton left office in 1795, the new Secretary of the Treasury Oliver Wolcott, Jr. informed Congress that, due to the existing state of government finances, more money was needed. This could be achieved either by selling the government's shares of stock in the Bank, or raising taxes. Wolcott advised the first choice. Congress quickly agreed. Hamilton objected, believing that the dividends on that stock had been inviolably pledged for the support of the sinking fund to retire the debt. Hamilton tried to organize opposition to the measure, but was unsuccessful. The bank's charter expired in 1811. It followed the Bank of North America and it was succeeded by the Second Bank of the United States.