Timeline on Central Banks
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 its doors in Philadelphia.
January 21, 1793
Hamilton and the National Bank are accused of corruption 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 its Charter renewal 4 years early.
July 10, 1832
President Jackson vetoes the Bank’s recharter on the grounds that the Bank is unconstitutional.
With the National Bank powerless, Jackson successfully pays off the nation’s 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 its 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.
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.
August 15, 1971
Under the regime of the French President Charles de Gaulle up to 1970, France reduced its dollar reserves, trading them for gold from the U.S. government, thereby reducing U.S. economic influence abroad. This, along with the fiscal strain of federal expenditures for the Vietnam War, led President Richard Nixon to end the direct convertibility of the dollar to gold in 1971, resulting in the system’s breakdown, commonly known as the Nixon Shock.