Why a National Bank

in 1790 Alexander Hamilton the first secretary of the Treasury persuaded Congress to pass a bill creating a central bank for the United States it would be modeled on the Bank of England this is where all federal deposits go so as the United States government gains money it gets deposited in the Bank of the United States and so it was essentially the bank for the u.s. government the Bank of the United States would provide a stable mechanism to help the government function smoothly but many were opposed to the idea of a large private bank loaning out money to the federal government Secretary of State Thomas Jefferson was one of them Jefferson just hated banks he hated commerce but his idea of the United States was a nation of yeoman farmers Jefferson wants the world of America to stay the way it is he wants it to be agrarian agricultural he says this is moral wealth a bank this is immoral wealth because it's money making money Jefferson did everything he could to persuade President George Washington not to sign the bill authorizing the bank he's in the cabinet and he says to George Washington this is unconstitutional read the Constitution there's nothing in it that says you can create a bank Hamilton says to George Washington well that's true but the Constitution does allow you to raise revenue and the right to raise revenue implies the right to have some place to put it Washington listens and he says you're right and thus the Bank of the United States is created Hamilton had one and the Bank of the United States was a resounding success by the beginning of the 1800s there were 29 branches across the country and the United States had a more reliable supply of money than most nations in Europe this was the only national bank so that you could get the Bank of the United States branch in Boston to give you a effective a piece of paper which you could take to Atlanta and turn instantly into money and it was a place where taxes could be gathered and it was a very efficient mechanism but the opposition to a National Bank in the United States would grow especially as new States entered the Union in the West were resentment against the eastern banking establishment Randeep and the fight that Hamilton and Jefferson had started over the Bank of the United States would come to dominate American politics for the next 40 years [Music]

Channel: NBC News Learn

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Length: 2min 47sec (167 seconds)

Published: Fri May 01 2020