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The Evils of Necessity:
December 14, 1790
Alexander Hamilton proposes a Bank of the United States.
December 16, 1790
Patric Henry opposes the National bank because it is unconstitutional.
February 25, 1791
President Washington asks his cabinet members for opinions on the National Bank. Thomas
Jefferson submitted that such
a Bank was unconstitutional and would also violate the yet to be ratified 10th
Amendment. Alexander Hamilton submitted that Congress's power to collect
taxes, was also power to create a national bank. Not convinced by either side,
Washington sided with Hamilton as it was Hamilton's job as Secretary of the Treasury to
know what he was doing.
December 12, 1791
The Bank of the United States opens it's doors in Philadelphia.
January 21, 1793
and mismanagement. Opponents to the National Bank call for the demise of
the unconstitutional Bank. Congress fails to act.
February 20, 1811
Congress refuses to let the National Bank renew its Charter on the grounds that the Bank
is unconstitutional.
March 4, 1811,
The Bank of the United States is dissolved.
January 20, 1815
President Madison vetoes a bill that would create a second National Bank.
January 8, 1816
Faced with financial hardship from the War of 1812, Congress proposes a 2nd National Bank.
The Bill also allows the President to suspend hard currency.
March 14, 1816
The 2nd National Bank gets Congressional approval.
January 1, 1817
The 2nd National Bank opens for business.
January 9, 1832
The 2nd National Bank applies for it's Charter renewal 4 years early.
July 10, 1832
President Jackson vetoes the
Bank's recharter on the grounds that the Bank is unconstitutional.
January 1835
With the National Bank powerless, Jackson successfully pays off the nations debt leaving
the U.S. with a surplus of $5,000.
July 11, 1836
Paper money results in tremendous inflation in property value. President Jackson issues a
Specie Circular mandating that land payments be made with gold and silver.
July 4, 1840
President Van Buren approves the Independent Treasury which allows the Federal government
to control it's own money.
June 7, 1841
Henry Clay, on behalf of the Whig party, introduces legislation to abolish the Independent
Treasury in hopes to replace the national banking system with a Federal Bank.
July 28, 1841
The Senate passes a bill, sponsored by the Whig party, to revive the 2nd National Bank by
creating a Federal Bank that would be called The Fiscal Bank of the United States.
(A State chartered Bank for the District of Columbia that would be used by the U.S.
Government. ) President Tyler vetoes the bill as unconstitutional.
August 13, 1841
The Independent Treasury Act is repealed leaving the National government without a Banking
system for the next 5 years. The Secretary of the Treasury deposits the government's money
into State Banks.
September 3, 1841
Congress again tries to create a Federal Bank. This time, they set it up to be run by
State office holders. Again, President Tyler vetoes it as unconstitutional.
September 18, 1873
A flood of paper money snowballs the Nation into a depression that lasts 5 years.
January 14, 1875
The Specie Resumption Act allows legal tender to be exchanged for gold. When the Act goes
into affect in 1879, the nation starts to revive from the 1873 depression.
1907
The Nation again goes into a Depression because of paper currency, but J.P. Morgan saves
the Nation from a major crisis by providing the government with $100 million dollars in
gold.
December 23, 1913
In response to the National Depression in 1907, President Wilson gets Congress to pass the
Owen-Glass Federal Reserve Act. The Act is intended to better regulate paper money.
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Copyright, 1997