A Classification of American Wealth
History and genealogy of the wealthy families of America - Sponsors


 Part 1 : Colonial and Mercantile America  Part 2 : America in the Gilded Age
 Part 3 : America in the Twentieth Century  Encyclopedia of American Wealth

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   Part II-Chapter 5 : Bankers I  > Index and Introduction  :  « Previous  1 - 2 - 3  Next »

In his function as Secretary of the Treasury, Alexander Hamilton stood also behind the First Bank of the United States, which was chartered in 1791 despite fierce opposition of the new Republican party and notably Secretary of State Thomas Jefferson and congressman James Madison, both future US presidents. Thomas Willing, the merchant partner of Robert Morris and president of the Bank of North America headed the First Bank of the United States in its first years. With a capital of $ 10 million, the Philadelphia based First Bank of the United States was America’s largest corporation and it soon became a vital financial institution. As the only bank with a federal charter, it opened branches in Boston, New York, Baltimore and Charleston South Carolina. Although it had not the powers of a modern central bank, the First Bank of the United States led the banking system of the early Republic as it could issue as much as $ 10 million in dependable notes and serve as a clearing house for state chartered banks through its branches. These also spread to Norfolk Va, Washington, Savannah and New Orleans. Thanks to the influence of Treasury Secretary Albert Gallatin, the First Bank of the United States even survived the administrations of Republicans Thomas Jefferson and James Madison, formerly fierce opponents to the bank’s chartering, until its charter expired in 1811. Although Gallatin had in the meantime persuaded president Madison to support the re-chartering, the leading Republicans in both houses of Congress prevented it. Albert Gallatin was in charge of the Bank’s liquidation, which involved the selling of its branches to the most influent state banks. The head office in Philadelphia was taken over by Stephen Girard, then the richest man in America and a large shareholder of the Bank, who used it as the basis of his non-chartered private Girard Bank, injecting a capital of 1'200'000 $.

Private banking houses, like the Girard Bank in Philadelphia, emerged generally as the result of the specialization of wealthy shipping merchants on the financial transactions related by the trading business. The major such houses included Prime, Ward & King in New York as well as Alexander Brown and his sons, who established a network of private banking houses in Baltimore, Philadelphia, New York and Liverpool. These private bankers were at the top of America’s wealth scale : Stephen Girard being the richest man in the country, Nathaniel Prime one of the five richest men in New York and the Browns among the country’s wealthiest families. Private bankers were also the chosen representatives of their great European equivalents : Barings, represented by Girard in Philadelphia and by Thomas Wren Ward in Boston; Rothschild, represented by immigrant August Belmont in New York or Lizardis of Paris, whose American agent was Edmond Forstall in New Orleans.

The liquidation of the First Bank of the United States happened at a difficult moment when the country due to its engagement in the War of 1812 once more required vast financial resources. Unable to get enough subscriptions for several war loans, the government was eventually assisted by a group of wealthy merchants, including Stephen Girard and John Jacob Astor, who financed $ 10 million and placed it among their fellow merchants and business partners. The precariousness of government finance during the war and the post war recession convinced the Republican government under James Madison, to re-establish a national bank. Thus was created the Second Bank of the United States in 1816, with Stephen Girard as a big subscriber and one of the government appointed directors.
 

Bankers I  > Index and Introduction  :  « Previous  1 - 2 - 3 Next »   

Patroons and Manor Lords

Planter  Aristocrats

Shipping Merchants

The Landlords of New YorkCity

Bankers I

Early American Industrialists
 

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