Bank of the United States summary

Bank of the United States, Bank chartered in 1791 by the U.S. Congress. It was conceived by Alexander Hamilton to pay off the country’s debts from the American Revolution and to provide a stable currency. Its establishment, opposed by Thomas Jefferson, was marked by extended debate over its constitutionality and contributed significantly to the evolution of pro- and anti-bank factions into the first U.S. political parties, the Federalist Party and the Democratic-Republican Party. The national bank played the unexpected but beneficial role of preventing private state banks from overextending credit, a restriction that some nevertheless considered an affront to states’ rights. Meanwhile, agrarian populists regarded the bank as an institution of privilege and wealth and the enemy of democracy and the interests of the common people. Antagonism over the bank issue grew so heated that its charter could not be renewed in 1811. Criticism of the bank reached its height during the administration of Pres. Andrew Jackson, who led anti-bank forces in the long struggle known as the Bank War. The bank’s charter expired in 1836. Its reorganization as the Bank of the United States of Pennsylvania ended its regulation of private banks.