First Bank of the United States

The President, Directors and Company of the Bank of the United States
Company type	Federally chartered bank
Industry	Banking, finance
Founded	February 25, 1791; 235 years ago in Philadelphia, Pennsylvania, United States
Founder	United States Congress
Defunct	March 4, 1811
Headquarters	Philadelphia, United States
Area served	United States (multiple states)
Key people	Thomas Willing (President 1791–1807), David Lenox (President post-1807)
Products	Banking services, loans to federal government
Number of employees	8 (at acquisition by Girard in 1812)

The President, Directors and Company of the Bank of the United States, commonly referred to as the First Bank of the United States, was a federally chartered bank established by the United States Congress on February 25, 1791, with a twenty-year authorization. It followed the Bank of North America as one of the earliest national financial institutions but did not operate as a contemporary central bank; it lacked functions such as implementing monetary policy, supervising private banks, maintaining excess reserves, or serving as a lender of last resort. Its designation as a national entity permitted it to maintain branches across several states and provide loans to the federal government, differentiating it from state-chartered banks which were confined to operating within individual states.

The creation of this bank was integral to Treasury Secretary Alexander Hamilton’s plan to enhance federal fiscal authority through a three-pronged approach that also included establishing a federal mint and levying excise taxes. Hamilton regarded the bank as vital for securing national credit stability and overseeing government financial operations under the newly ratified US Constitution.

Located in Philadelphia, Pennsylvania, the First Bank’s headquarters—completed in 1797 inside what is now Independence National Historical Park—is designated as a National Historic Landmark due to its architectural and historical importance. Among its principal leaders was President Thomas Willing (1791–1807), who received considerable backing from prominent figures such as George Washington.

Background

Alexander Hamilton, serving as the inaugural Secretary of the Treasury, was instrumental in developing the United States’ financial framework. His efforts encompassed advocating for a national bank, consolidating state war debts under federal responsibility, founding a mint, and instituting federal excise taxes. Hamilton’s primary goals were to establish fiscal order, build both domestic and international creditworthiness, address problems associated with Continental currency, and create a reliable revenue stream for the government.

Fundamentally, Hamilton sought to have the Federal Government assume Revolutionary War debts and ensure their repayment, generate funds to support government functions, and institute a national bank that would provide a standardized currency.

Proposal

In 1790, Hamilton proposed capitalizing the First Bank of the United States by issuing $10 million in stock shares. The government would acquire $2 million worth through a loan from the bank itself, repayable over a decade. The remaining $8 million was made available for purchase by private investors both within America and abroad, with an upfront payment requirement of 25% in gold or silver.

Unlike the Bank of England, the First Bank’s chief purpose was to extend credit to both governmental and private sectors to stimulate economic growth under Hamilton’s Public Credit framework. While serving as a repository for tax revenues and providing short-term loans to the government were important functions, these were secondary in comparison.

Essential terms for establishing the bank included:

A twenty-year charter spanning 1791 to 1811, during which no other federal banks would be authorized; however, states retained freedom to charter banks operating solely within their borders.
Measures designed to avoid conflicts of interest: directors were prohibited from purchasing government bonds; regular rotation of directors was mandated; limitations were imposed on note issuance and overall indebtedness.
Foreign investors were permitted to hold stock but were excluded from voting rights.
The Secretary of the Treasury held powers to withdraw deposits, audit financial records, and demand frequent reporting on the bank’s finances.

To address increasing fiscal requirements—including interest payments on assumed state debts—Hamilton advocated raising tariffs on imported distilled spirits alongside excise taxes on domestically produced liquors. This revenue strategy aimed at bolstering government income but encountered significant local resistance that ultimately led to the Whiskey Rebellion.

Opposition

Hamilton’s proposal for a national bank encountered significant resistance from proponents of limited federal authority, notably led by Secretary of State Thomas Jefferson and James Madison. They contended that the bank was unconstitutional and disproportionately benefited merchants and investors rather than the wider populace. Jefferson and Madison also criticized Hamilton’s initiative to establish a government Mint, expressing concerns that centralization would undermine local banks and favor northern commercial sectors at the expense of southern agricultural interests. They argued that Congress lacked explicit constitutional power to establish such an institution, invoking the Tenth Amendment and apprehensions about potential violations of property rights.

While the national mint proposal passed without much difficulty, legislative complications emerged due to discrepancies between the House and Senate versions of the bill, especially concerning the excise tax intended to fund the bank. Although both chambers approved their respective versions despite objections, reconciling these differences proved problematic.

The constitutionality of the bank was a pivotal point of contention: Hamilton maintained that the bank was a necessary instrument to carry out government powers implied by the Constitution. In contrast, Jefferson argued it infringed on property laws and exceeded congressional authority. Madison stressed that any powers not explicitly granted to Congress were reserved for states or the people, asserting that establishing a bank was not among those authorized powers. Ultimately, President George Washington made his decision following thorough consultation with his cabinet.

Presidential approval

Initially reluctant to endorse the "bank bill," George Washington sought written counsel from his cabinet members, particularly Alexander Hamilton. Attorney General Edmund Randolph and Secretary of State Thomas Jefferson, both Virginians, opposed the legislation on constitutional grounds. Hamilton, representing New York’s perspective, defended the government’s sovereign prerogative to incorporate entities like the First Bank of the United States—privately owned rather than a federal agency—arguing that such actions were permissible if aligned with governmental objectives under the Constitution.

Persuaded by Hamilton’s arguments, Washington signed the bank bill into law on February 25, 1791. Subsequently, on March 19, 1791, he appointed Thomas Willing, David Rittenhouse, and Samuel Howell as Commissioners responsible for managing subscriptions to the bank. Willing assumed the presidency on October 25, 1791, serving until 1807 when ill health compelled his resignation. The Philadelphia branch officially opened on December 12, 1791; David Lenox succeeded Willing as president until the charter expired on March 4, 1811.

Expiration of charter

Following Hamilton’s departure from office in 1795, Treasury Secretary Oliver Wolcott Jr. informed Congress that additional funding was necessary for government operations and recommended selling government-held shares in the bank rather than increasing taxes. Despite Hamilton’s objections—he believed dividends were earmarked for debt retirement through the sinking fund—Congress approved this approach. Hamilton’s opposition did not prevail.

The First Bank of the United States was eventually replaced by the Second Bank of the United States in 1816.

Acquisition by Girard

Following the expiration of the First Bank of the United States' charter in 1811, Stephen Girard, a distinguished businessman and influential figure, purchased the majority of its shares along with the property located on South Third Street in Philadelphia. He established his own financial institution, which later became known as Girard Bank, officially commencing operations on May 18, 1812. To manage the new bank, Girard employed George Simpson, who had served as cashier at the First Bank, along with seven additional staff members. Additionally, he provided the Trustees of the First Bank with leased premises at a minimal rent to oversee the institution’s winding down. Operating as the sole owner, Girard’s bank avoided Pennsylvania’s legislative requirements for banking charters.

Bank headquarters and branches

During its operation while Philadelphia was the national capital (1790–1800), the First Bank of the United States was based in that city. It initially functioned out of Carpenters' Hall beginning in 1791 before expanding by opening branches in key urban centers such as Boston, New York, Charleston, Baltimore (1792), Norfolk (1800), Savannah and Washington, D.C. (1802), and New Orleans (1805), thereby extending its presence across major financial hubs in the United States.

The bank’s main building, completed in 1797, is attributed to architect Samuel Blodgett with potential input from James Hoban. This Greek Revival edifice holds the distinction of being the first federal government structure purpose-built for banking activities. Its architectural and historical importance led to its incorporation into Independence National Historical Park in 1956 and its designation as a National Historic Landmark in 1987.

Although it has been closed to visitors since the 1970s and formerly housed park administrative offices until approximately 2000, there are plans to transform the building into a museum focused on early American economic history. In June 2023, Independence National Historical Park obtained $22 million via the Great American Outdoors Act to fund restoration and museum development efforts, aiming for an opening in 2026.

This landmark continues to represent a foundational element of early U.S. financial infrastructure and exemplifies strategic leadership in public banking evolution.

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