Bank of North America Opens

United States - Scott #1578a (1975)
United States – Scott #1578a (1975)

On January 7, 1782, the Bank of North America was opened in Philadelphia, Pennsylvania, as the first American commercial bank. This was a private bank  first adopted on May 26, 1781, by the Confederation Congress and chartered on December 31, 1781, a week prior to its official opening. It was based upon a plan presented by U.S. Superintendent of Finance Robert Morris on May 17, 1781, that created the Nation’s first de facto central bank. When shares in the bank were sold to the public, the Bank of North America became the country’s first initial public offering. It was succeeded in its role as central bank by the First Bank of the United States in 1791.

In May 1781, Alexander Hamilton revealed that he had recommended Morris for the position the previous summer when the constitution of the executive was being solidified. Second, he proceeded to lay out a proposal for a national bank. Morris, who had corresponded with Hamilton previously on the subject of funding the war, immediately drafted a legislative proposal based on Hamilton’s suggestion and submitted it to the Congress. Morris persuaded Congress to charter the Bank of North America, the first private commercial bank in the United States.

Portrait of Alexander Hamilton by John Trumbull, 1806
Portrait of Alexander Hamilton by John Trumbull, 1806

When Robert Morris became superintendent of finance in February 1781, Continental currency had ceased to be issued. On April 30, 1781, Alexander Hamilton sent Morris a letter. The original charter called for the disbursement of 1,000 shares priced at $400 each. Benjamin Franklin purchased one share for 0.1% ownership as a sign of good faith to Federalists and the new bank and Hamilton made public endorsement of the establishment under his pseudonym.

William Bingham’s first daughter, Ann Louisa Baring was born the day before the bank opened, and her father purchased 9.5% of the shares for himself. She was also the granddaughter of Thomas Willing, a primary shareholder and the original President of the bank offices at Philadelphia. Using a gift/loan from France, Robert Morris purchased 63.3% of the original shares for the government. Robert Morris deposited large quantities of gold and silver coin and bills of exchange obtained through loans from the Netherlands and France. He then issued new paper currency backed by this supply.

By 1783, Congress and several states including Massachusetts enacted legislation, allowing Americans to pay taxes with Bank of North America certificates. Within three years, the Bank was considered a creditworthy institution.

After a change of party in Pennsylvania’s legislature in 1786 the Bank of North America was re-chartered within the Commonwealth in 1787, but under more restrictive conditions that would hinder it from performing its intended role as a central bank.

Three pence Colonial currency from the Province of Pennsylvania issued by the Bank of North America, 6 August 1789. Printed by Benjamin Franklin Bache on marbled paper obtained by Benjamin Franklin. Engraved signature of Trench Francis.
Three pence Colonial currency from the Province of Pennsylvania issued by the Bank of North America, 6 August 1789. Printed by Benjamin Franklin Bache on marbled paper obtained by Benjamin Franklin. Engraved signature of Trench Francis.

John Nixon was the first director of the Bank of Pennsylvania. Morris subscribed £10,000 sterling to fund it. It was not a bank in the ordinary sense but an organization formed for the purpose of financing supplies for the army. In 1782, the Bank of North America superseded the Bank of Pennsylvania. Serving from 1792 to 1808, Nixon succeeded the first president of the Bank of North America, Thomas Willing, who went on to become the first president of the First Bank of the United States. Nixon was in turn succeeded by John Morton, who served as President until 1822. William Frederick Havemeyer was its president from 1851 to 1861 and brought it successfully through the crisis of 1857. After it had become a National Bank in 1865, a president of the same name presided over its liquidation in 1908.

The Bank of Pennsylvania was re-established in 1793, with a charter from the Commonwealth of Pennsylvania, and branches were opened in Pittsburgh, Harrisburg, Lancaster, Reading, and Easton. The original branch of the Bank of Pennsylvania remained in business in Pennsylvania through the 19th and 20th centuries under a variety of other names including First Pennsylvania Bank and, before its acquisition by Wells Fargo, as Wachovia, First Union Bank and CoreStates. Wachovia (as of November, 2012) operated a branch at the northwest corner of S. 6th and Chestnut Streets in Philadelphia, diagonally opposite Independence Hall, which was the original site of the Bank of North America. This branch is the longest continuously operating branch bank in the United States, operating in that location since 1781. Following Wells Fargo’s acquisition of Wachovia, Wells Fargo adopted Charter #1.

The Bank of North America along with the First Bank of the United States and the Bank of New York were the first shares traded on the New York Stock Exchange. The Bank of North America opened a Canadian affiliate in Montreal, Lower Canada on March 8, 1837.

Lithograph of the Bank of North America at 309 Chestnut Street, Philadelphia, Pennsylvania. The inscription reads
Lithograph of the Bank of North America at 309 Chestnut Street, Philadelphia, Pennsylvania. The inscription reads “Oldest bank in the country and one of the most substantial. Chartered by Congress in 1781 and has continued ever since under the same name. Capital, $1,000,000. Surpluss and profits, $1,800,000.”

The 10-cent Banking and Commerce commemorative stamps were first placed on sale at New York, New York, on October 6, 1975, in conjunction with the Centennial Convention of the American Bankers Association (Scott #1577-1578 with a joined pair listed as Scott #1578a). The se-tenant pair of stamps focused attention upon the important role that banking and commerce played in the development of the United States. Shown on Scott #1577 (“Banking”) is an Indian Head Penny and a Morgan-type Silver Dollar while Scott #1578 (“Commerce”) features a quarter and a 20-dollar Gold Double Eagle. The background of the stamps reproduces a security design found in currency, stocks, and bonds. V. Jack Ruther designed the stamps, which were issued in sheets of forty, perforated 11. The Bureau of Engraving and Printing issued 73,098,000 copies of each stamp, printed using lithography and engraving.

I was just starting to collect U.S. stamps in 1975 and I received the Postal Service’s Mint  Set as either my birthday or Christmas gift that year. I can recall the Banking and Commerce issue being one of my favorite sets of stamps at the time as I was just beginning to collect coins as well and obtaining one of the beautiful Morgan silver dollars was one of my great dreams. I believe I may have had an Indian head penny back then already. My numismatic collection had begun in earnest with another Christmas gift from one of my grandparents: an uncirculated Columbus commemorative half dollar as well as several 1935-series U.S. silver certificates. I did eventually obtain several Morgan silver dollars and had a very nice U.S. twentieth-century type collection at one point. I probably gave up the coins sometime in the mid- to late-1980s as I began to concentrate on stamps more. I wish I still had those coins…

Preliminary design for the Great Seal of the United States, 1782
Preliminary design for the Great Seal of the United States, 1782

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.