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Covers the First and Second Banks, including constitutional disputes, lending impacts, and payments-system challenges that affected national finance.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & 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1791?","Question",{"text":63,"@type":64},"Congress established it under a 20-year charter to strengthen the nation’s ability to manage money and credit, despite concerns about constitutional authority and concentrated power.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"What constitutional concern surrounded the First Bank?",{"text":68,"@type":64},"Opponents argued the federal government lacked explicit authority to charter banks, but deeper concerns focused on the potential harm that such power could cause to states and the republic.",{"name":70,"@type":61,"acceptedAnswer":71},"How did the Second Bank address earlier banking and currency problems?",{"text":72,"@type":64},"It aimed to help the Treasury raise needed funds and promote a more uniform currency by restraining state bank note practices and managing specie-to-note exchange 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novel,rich in politi-cal intrigue and colorful characters.Where students might expect an encyclo-pedic description of how each part ofourfinancial system was carefully designed,they find a patchwork o institutions thathas evolved in response to the pressingneeds ofour unique economic circum-stances and political sensibilities  \nIndeed,the story ofthe American finan-cial system cannot be told without someappreciation for the great and continuingdebate over the establishment of a largenational bank—what we now call acentral bank—that is in a unique posi-tion to influence a nation's money andcredit.This is a story of how Americans'mistrust of power coexists,howeveruneasily,with the desire to promoteefficiency in our payments system.Inthis Commentary,we recount the riseand fall of the Banks of the UnitedStates,our nation's early attempts atcentral banking and the precursors ofthe Federal Reserve System.  \n## United States\n\nThe American Revolution was a painfulesson in the importance of an effectivenational payments system.With only aloose coalition of state govemments,therevolutionaries nearly lost their struggleagainst British sovereignty for want ofcredit.America's first Secretary of theTreasury,Alexander Hamilton—a manwhose abrasiveness was as legendary ashis intelligence—foresaw continued perilif the nation failed to establish a strongnational bank.Such a bank could moreefficiently collect and disburse govem-ment funds and aid in the issuance ofgovemment debt.Hamilton's efforts toplace such powers in the hands o a cen-tral authority earned him a reputation as  \n# Fear and Loathing of Central Banksin America\n\na \"monarchist.\"Nonetheless,in 1791,athis prompting,Congress established the(First)Bank of the United States(FBUS)under a 20-year charter.The bank had ini-tial capital ofS10 million,making it byfar the largest bank of the time.Althoughthe federal govemment provided one-fifthof its capital and appointed its directorsthe bank was designed to be a largely pri-vate institution so that its managementwould have adequate incentive for main-taining its financial integrity.The FBUSthus established the “quasi-private”qual-ity that would influence future incarna-tions of central banking in America.  \nMany,including the influential ThomasJefferson,opposed the bank on thegrounds that it was unconstitutional—the federal government was not expresslygranted the authority to charter banksBut what underlay the constitutionalityissue was apprehension over the enor-mous power this institution might pos-sess.In the hands of the federal govern-ment,such power would almost certainlybe used to the disadvantage of the statesand,ultimately,of the republic.Indeed,because the FBUS acted as the federalgovernment's fiscal agent,it continuallyreceived state banks'obligations.As theircreditor,it could affect their lendingpower—when the FBUS redeemednotes,state banks lost reserves,reducingtheir lending potential.  \nThe FBUS's bid for renewal of its 20-yearcharter was defeated in Congress by onevote.But it seems the bank was killed byuneasiness about its very existence,notby a belief that it had exercised its powerto the nation's detriment.In fact,theFBUS was generally thought to havemanaged the federal government'sgrowing fiscal resources effectively andto have provided some modest oversightto the expanding network of state banking  \nJune 2002  \nThe Federal Reserve System is Amer-ica's uneasy compromise between ourwariness of concentrated financialpower and our desire to promoteefficiency in our national paymentssystem.In fact,the Federal Reserve isthe nation's third attempt to establisha large national bank—what we nowcall a central bank—that is in a uniqueposition to influence a nation's moneyand credit.This Commentary retellsthe story of the rise and fall of the twoearlier national banks,the Banks ofthe United States.  \ninstitutions that was becoming the back-bone of th","cbCaijVMFT6hyMy4","https://ap.wps.com/l/cbCaijVMFT6hyMy4","pdf",1394688,"English","# Fear and Loathing of Central Banks in America\n## United States\n## The(Second)Bank ofthe United States","[{\"question\":\"Why did Congress establish the (First) Bank of the United States in 1791?\",\"answer\":\"Congress established it under a 20-year charter to strengthen the nation’s ability to manage money and credit, despite concerns about constitutional authority and concentrated power.\"},{\"question\":\"What constitutional concern surrounded the First Bank?\",\"answer\":\"Opponents argued the federal government lacked explicit authority to charter banks, but deeper concerns focused on the potential harm that such power could cause to states and the republic.\"},{\"question\":\"How did the Second Bank address earlier banking and currency problems?\",\"answer\":\"It aimed to help the Treasury raise needed funds and promote a more uniform currency by restraining state bank note practices and managing specie-to-note exchange pressures.\"}]","Fear and Loathing of Central Banks in America | PDF",1789959770,13]