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Founding ChoicesAmerican Economic Policy in the 1790s$
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Douglas A. Irwin and Richard Sylla

Print publication date: 2011

Print ISBN-13: 9780226384740

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226384764.001.0001

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Federal and State Commercial Banking Policy in the Federalist Era and Beyond

Federal and State Commercial Banking Policy in the Federalist Era and Beyond

(p.151) 5 Federal and State Commercial Banking Policy in the Federalist Era and Beyond
Founding Choices

Howard Bodenhorn

University of Chicago Press

This chapter describes the founding choices with respect to the banking system in the United States. The chapter shows that Robert Morris's Bank of North America, the nation's first bank which had been chartered in 1781–1782 (by Congress and also several states), exemplified the first approach. It was made accountable to the federal government which, in a Hamiltonian innovation, owned 20 percent of the Bank's stock, and its governance provisions balanced the interests of large and small stockholders. Hamilton's charter allowed the Bank to open branches throughout the United States. Founding choices about the sort of banking Americans should have now seem eerily relevant in the aftermath of the banking and financial crises of the early twenty-first century. Reforms embodying stricter regulation of U.S. banking and financial services are therefore at the top of legislative agendas.

Keywords:   founding choices, banking system, Bank of North America, Hamiltonian innovation, governance, provisions, Hamilton's charter

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