First National Bank Controversy

One of the biggest controversies in the early U.S. history was the first national bank. In 1791, the Bank of the United States was created as a charter bank by Congress. The initial purpose of creating the bank was to eliminate states from investing in foreign banks and keeping all currency affairs within the United States. It was also created to create a standard form of currency and handle war debt while boosting the United States economy financially. Although the proposition of the bank was well needed and useful, many opposed and questioned whether or not creating a bank was constitutional.

The controversy behind the national bank lies with its purpose and legality of being established. Alexander Hamilton knew how the Bank of England worked so he established a bank based on the principles used by the British. He proposed his financial system based on the fact that the bank would be a private institution in which the government would be the major stockholder. The government would be allowed to have more control

Jefferson along with other Americans felt that establishing a bank went against the constitution. There was no legal authorization stated in the constitution allowing such financial authority. It is clear of the powers entitled to the central government and those granted to the states. Jefferson saw fit that all power not specifically granted to the central government were reserved to the states. He believed that is was up to the states to charter banks, not Congress. The establishment of the bank would also create a controversial uproar amongst the north and south as it would support the wealthy businesses and the privileged class while the agricultural south had little to no benefits from the bank. The creation of the Bank of the United States and the corrupted banking in the years after eventually lead to a campaign war solely about the national bank’s