Summary
Established in 1782, the Bank of North America was the first commercial bank in the United States. Chartered by both the Second Continental Congress and the Pennsylvania Assembly, it financed government operations and supported commerce in Philadelphia. Directed by Robert Morris and Thomas Willing, the bank became a model for the later First Bank of the United States. Controversy over its role fueled the early debates over banking power, government control, and economic policy in the New Nation Era.
Essential Facts
- Key People: Robert Morris, Thomas Willing.
- Part Of: New Nation Era.
Key Details
- The Bank of North America was chartered by the Second Continental Congress in 1781.
- The bank started operations in 1782.
- The Pennsylvania General Assembly also granted it a charter in 1782.
- Robert Morris and Thomas Willing led the bank’s operations.
- The bank took over the Bank of Pennsylvania’s operations in 1782.
- It provided loans to both government entities and private merchants.
- By 1784, it had become a key financial institution in Philadelphia.
- Rural Pennsylvanians criticized the bank for being corrupt and linked too closely to the government.
- Pennsylvania revoked the bank’s state charter in 1785, but it was restored in 1787.
Significance
The Bank of North America is important to American History for the role it played in the financial development of the United States during the New Nation Era. The debate over its role brought regional attitudes about banking and state authority to the forefront, leading to a clash between urban and rural lawmakers. The bank’s operations established precedents for national financial institutions and directly influenced the creation of the First Bank of the United States, an essential piece of Alexander Hamilton’s Financial Plan.
Notes
Organization
- The Bank of North America was the first real commercial bank in the U.S.
- The bank received a charter from the Second Continental Congress in 1781.
- It was also chartered by the Pennsylvania General Assembly in 1782.
- It took over the operations of the Bank of Pennsylvania, which had been used by Congress since 1780.
Early Role
- Wealthy Philadelphians Robert Morris and Thomas Willing directed the bank.
- It became an important part of Philadelphia’s mercantile community.
- The bank was influential in the Pennsylvania state government and the national government.
Growth
- The bank loaned money to both federal and state governments.
- It also started lending money to merchants in Philadelphia.
- By 1784, the bank became a powerful financial tool for Philadelphia merchants and investors.
- Its hard-money (gold and silver) reserves helped maintain financial credibility and banknote value.
Controversy
- Robert Morris served in the Pennsylvania Assembly and debated rural colleagues in 1785 over the bank’s charter.
- Rural Pennsylvanians saw the bank as corrupt and too closely tied to the state government, which led to political controversy.
- The Pennsylvania state government revoked the bank’s charter.
- The bank continued operating under its federal charter.
- The bank regained its state charter in 1787.
Legacy
- The debate in the 1780s revealed differing views on the role of banks in the U.S.
- It also exposed a regional divide in Pennsylvania’s state politics, which was a precursor to the events that unfolded during Shays’ Rebellion and the Whiskey Rebellion.
- The Bank of North America became a model for the First Bank of the United States.
- Despite losing its state charter, the bank continued operating as a lender and repository.
- The bank remained important to Philadelphia’s mercantile community throughout the early republic and beyond.
AP US History
The Bank of North America is part of the following units, topics, and chapters in the AP US History curriculum:
Lexicon
The following terms and definitions related to the Bank of North America are relevant to the study and understanding of its role in American History.
First Bank of the United States (1791–1811) — Established in 1791 as part of Alexander Hamilton’s Financial Plan, the First Bank of the United States helped stabilize the national economy, manage government funds, and regulate currency. It faced strong opposition from Democratic-Republicans who viewed it as unconstitutional and favoring elites. Despite its success in strengthening federal financial control, Congress refused to renew its charter in 1811.
Democratic-Republican Party — One of the first political parties in the United States. The party supported a weak central government in favor of strong states and a strict interpretation of the U.S. Constitution. The party split in the mid-1820s, and a faction exists today as the modern Democratic Party. The original party was led by Thomas Jefferson and James Madison. Four Democratic-Republican candidates were elected President: Jefferson, Madison, James Monroe, and John Quincy Adams.
Federalist Party — One of the first political parties in the United States. The party supported a strong central government and a loose interpretation of the U.S. Constitution. The party faded out in the mid-1820s. Alexander Hamilton was the party’s leader. John Adams was the only member of the party to be elected President.
Hamilton’s Financial Plan — A comprehensive strategy proposed by Secretary of the Treasury Alexander Hamilton to strengthen the nation’s economy. It included measures such as establishing a national bank, assuming state debts, and implementing protective tariffs. Hamilton’s plan aimed to centralize economic power and promote industrialization, laying the foundation for a strong federal government.
Robert Morris (1734–1806) — Morris was a key financial leader during the American Revolution. As a delegate to the Continental Congress, he supported independence and helped acquire supplies for the military. He served as superintendent of finances from February 20, 1781, to September 1784, working to stabilize the economy and establish the Bank of America. Morris played a vital role in funding the war and is often called the “Financier of the American Revolution.” Morris was a signer of the Declaration of Independence, the Articles of Confederation, and the United States Constitution.
Thomas Willing (1731–1821) — Willing was a Philadelphia businessman, Patriot, and a business partner of Robert Morris. In 1775, he was elected to the Second Continental Congress. Although he personally voted against independence, he helped fund the American war effort and was involved with the Secret Committee of Congress, which managed war supplies and foreign trade. After the American Revolutionary War, he was the President of the Bank of North America and then served as the 1st President of the First Bank of the United States from 1791 to 1807.
