History of Banks Essay

The creation of the first national bank in the United States was of utmost importance in setting precedence for how much power the constitution actually grants the government. The debate over whether to create a national bank raised many questions over the constitution that hadn’t been tested before. It also raised questions about what the government can do when the constitution has no written clause on a certain subject. In looking at the arguments from Alexander Hamilton, James Madison, and Thomas Jefferson regarding a national bank, people can find out more about how some of the leading founders of the Constitution wanted to see the United States government run.

At this time the government was funding its debt through private banks such as the Bank of North America and the Bank of New York. Not satisfied with the structure of American banking, Hamilton reported to Congress the need to establish a National Bank in December of 1790. The Senate created a committee to study Hamilton’s proposal. On the committee were men who shared Hamilton’s ideas in fiscal matters, and that of a strong federal government. One of the members, General Schuyler, was Hamilton’s father in law. It was of no surprise that a bill arose out of the committee supporting Hamilton’s plan to incorporate a Bank of the United States.

Even before the creation of the Federal Reserve, banks were used by the public just as we use them today. Deposits were made into savings accounts. Loans were taken out to mortgage a home or finance a new business. Banknotes were issued and spent when the public borrowed from the banks. Borrowers spent these banknotes just as paper money is spent today. These bank notes were valued as money since they were backed by the promise that they would be exchanged on demand for either gold or silver.

Hamilton’s creation of the first bank in the United States continues to exist in today’s economic environment. However, at that time Hamilton’s proposal was met with widespread resistance from individuals such as James Madison and Thomas Jefferson who considered the creation of a federal bank as unconstitutional. The analysis made by Gordon in his book is consistent with arguments made by to have a bank that would be effective in order to implement the powers authorized by the government as it was implied in the constitution

A financial crisis, he believed, would embellish the need for a central bank, confirming support for charter renewal in 1836. Biddle’s campaign appears to have had less effect than either his followers or his critics believed at the time, but the Bank War became a matter of powerful debate in Congress, in the press, and among the public. Spokesmen argued that Biddle’s capacity to disrupt the economy only highlighted the dangers of a central bank. The federal deposits were not returned to the Second Bank, and its charter expired in 1836. President Jackson had won the Bank

While the hard-money believed that hard currency was the only safe currency. The Bank’s charter was set to expire in 1836, and Jackson had no plans of renewing it. Although, Biddle had supporters such as Henry Clay and Daniel Webster who told Biddle to apply for a recharter four years before the Bank's expiration date, which Biddle did. Congress passed the bill for the recharter, but Jackson vetoed it. Then Jackson had Roger Taney remove the government’s deposits from what he called the “monster.” This forced Biddle to put out loans and raise interest rates. As the financial institution grew worst, Jacksonians blamed the horrible condition on Biddle, and he left with no hope of a recharter. The Bank was expired in 1836.

The bank provided credit to growing enterprises, issued bank notes which served as a dependable medium of exchange throughout the country, and it exercised a restraining effect on the less well manages state banks. Nicholas Biddle, who ran the Bank, tried to put the institution on a sound and prosperous basis. But Andrew Jackson was always determined to destroy it (Brinkley, 249). The Bank had two opposition groups: the “soft-money” faction and the “hard-money” faction. Soft money advocates objected to the Bank of the United States because it restrained the state banks from issuing notes freely. Hard money advocates believed that coin was the only safe currency, and they condemned all banks that issued bank notes.

The validity of President Andrew Jackson’s response to the Bank War issue has been contradicted by many, but his reasoning was supported by fact and inevitably beneficial to the country. Jackson’s primary involvement with the Second Bank of the United States arose during the suggested governmental re-chartering of the institution. It was during this period that the necessity and value of the Bank’s services were questioned.

In response to this panic, a committee was established to find the flaws of the current banking system. This committee, the National Monetary Commission, found there were two main flaws dominating the system. First, the currency was not responsive to changes in demand. (Born...13). This meant that the bank had a fixed amount of currency, regardless of the

In the late 1820s, Nicholas Biddle, the president of the national bank, wanted to strengthen the national Bank, stop the over issuing of money to small local banks, and create a more stable currency in order to prevent inflation. In 1832, there was a bill to extend the charter, which expired in 1836, another twenty years. However, Jackson refused to sign the bill saying that the bank would use it’s power to prevent his reelection. But, In his veto of the charter to the senate he takes the side of the common man, saying the rich and powerful too often bend the acts of government to their selfish purposes.” foot note Here Jackson seems as like the president for the everyday American, but, his real reason for vetoing the charter was for reelection purposes, which reveals that Jackson was not a good president because he put his agenda in front of the people’s. In replace of the National Bank, Jackson established spaller states wide “pet banks”. Due to the elimination of National bank, the government lost its ability to regulate the pet bank’s activities. This led to the constant printing of paper money in order to help finance many of the 18th century reforms. This inflation caused the value of the dollar to dramatically declined. The wageworks’, whom Jackson said that this bank reform would benefit the most, value of salary continually decreased. Jackson attempted to fix the problem by passing the Specie Circular, which required land purchasers to pay in gold and silver coins. But, Britain contemporaneously required that Americans pay them in gold and silver as well. Due to the general lack of gold in America, many banks were forced to close. Many people lost their money and trade slowed down as Britain need for cotton lessened. This ultimately led to the collapse of the economy and resulted in a depression. What Andrew Jackson had done to benefit the common man who couldn’t get

There have been many controversies since the United States declared independence in 1776. One of the many domestic issues that divided American citizens was developing the First National Bank in the late 1700s. Hamilton was in favor, while Jefferson opposed and American citizens chose their side based on what they believed what was best for the country. Hamilton proposed a Report on a National Bank in December of 1790 announcing what the National Bank would include. Hamilton’s proposal included, “The bank’s stock would be worth $10,000,000. 20,000 shares would be sold privately at $400 per share ... 5,000 shares or $2,000,000 of bank stock would be bought by the U.S. government. The bank would be run by a 25-man board of directors - 20 chosen by the shareholders and 5 by the government. The bank’s president would be elected by the board of directors. Notes and bills (money) issued by the bank would be redeemable on demand ... and would be accepted by the U.S. government for all payments due. The bank’s charter would run for 20 years and would be subject to renewal by Congress. The bank would be allowed to establish branch offices in other cities; its main branch would be in Philadelphia, the nation’s capital” (http://www.digitalhistory.uh.edu/teachers/lesson_plans/pdfs/unit3_ 4.pdf). Although the first part of the bank bill, establishing a national mint, did pass with ease, supporters and opposers debated the rest of the bill, which included the development of

The First Bank of United States – 1791 to 1811. Mr. Hamilton urged Congress to adopt the model he had come up with, which included one national bank that would hold the federal government’s deposits and would lend to the government and business. Though there was much opposition, the proposal was accepted but the bank’s charter was given a 20 year limit. The bank, known as First Bank or Bank of United States, helped to bring the economy of the country together. However, it was a private institution where foreigners owned 70 percent of the bank and this concerned the citizens of the United States. When the charter was up for renewal it was rejected and the bank was closed in 1811. ("First Bank of the United States" 1-16)

As a staff analyst, I think that there are many alternatives present which can save the Bank from a huge loss. Actually in this dispute I feel that Bank is right because they made it clear in the purchase order that the machines needs to be shipped through Yellow Freight and also paid the invoice before time as per their custom. But still the carrier was changed by Data Max without asking or informing the bank.

Giovanni di Bicci de’ Medici founded the Medici bank in 1397 after splitting from his nephew to establish a bank branch in Florence. As the new bank grew and expanded, so did the wealth and power of the Medici family. When Cosimo il Vecchio de’ Medici, Giovanni’s son, took over the banking business in 1434, the increasing economic power of the Medici family allowed them to establish themselves as effective rulers of Florence while keeping the republican system of government nominally intact. The bank provided the Medici family a combination of economic and political power that facilitated the stability of Medici rule. Thus, the failure of the Medici bank during the reign of Lorenzo il Magnifico was key to the collapse of the Medici

The math teacher was babbling on about how this specific formula worked and halfway through her example I noticed that she had made a mistake. I hesitated a hundred times before raising my hand. It felt almost wrong because usually no one spoke up unless they had to go to the bathroom or get a drink which we all know that was just an excuse so we didn’t have to hear the teacher talk about something we weren’t interested in at that moment. According to Freire, we were taught within the banking system of education to accept our ignorance as justifying the teacher’s existence (319). In other words, students were “trained” in a way to keep