Bank of North America, First Incorporated Bank in the United States, Commenced Business January 7, 1782

The first incorporated bank in America was the Bank of North America, and its operations commenced January 7, 1782, in the commodious store belonging to its cashier, Tench Francis, on the north side of Chestnut Street, west of Third.

In 1780 the Assembly of Pennsylvania made a strong effort to relieve the people from the withering blight of the Continental money. It tried to redeem it by taxation at the rate of 1 to 40. But neither this nor any other measure prevented the coinage of the phrase, “It is not worth a Continental.”

To assist Congress in providing for the army, Robert Morris and other financiers of the State established the Bank of Pennsylvania, the first bank in America. The last attempt to prolong the life of the “Continentals” was made by the Supreme Executive Council in May, 1781; but the remedy proved fatal. Pelatiah Webster said of the proceedings: “Thus fell, ended and died the Continental currency, aged six years.”

During the Revolutionary War the country was extremely poor, with few industries but agriculture, and was quite denuded of the precious metals, owing to a heavy and long continued adverse foreign trade, so that the Congress of the United States experienced great difficulties in providing the requisite means for carrying on the hostilities.

On May 10, 1775, soon after the battle of Lexington, Congress made preparation to issue Continental paper, $2,000,000 of which were put in circulation on June 22 following.

From month to month these issues, which in the aggregate reached three hundred millions, depreciated, until eventually they became entirely valueless, notwithstanding the passage of laws making them a legal tender for the payment of debts.

On May 17, 1781, a plan for a National Bank was submitted to Congress by Robert Morris, of Pennsylvania, the principal provisions of which were as follows: The capital to be $400,000, in shares of $400 each; that each share be entitled to a vote for directors; that there be twelve directors chosen from those entitled to vote, who at their first meeting shall choose one as president; that the directors meet quarterly; that the board be empowered from time to time to open new subscriptions for the purpose of increasing the capital of the bank; statements to be made to the Superintendent of the Finances of America; 19that the bank notes payable on demand shall by law be made receivable for duties and taxes in any state, and from the respective states by the treasury of the United States; that the Superintendent of Finances of America shall have a right at all times to examine into the affairs of the bank.

On May 26, 1781, Congress adopted the following: “Resolved, that Congress do approve of the plan for the establishment of a National Bank in these United States, submitted for their consideration by Mr. R. Morris, May 17, 1781, and that they will promote and support the same by such ways and means, from time to time, as may appear necessary for the institution and consistent with the public good; that the subscribers to the said bank shall be incorporated agreeably to the principles and terms of the plan, under the name of ‘The President, Directors, and Company of the Bank of North America,’ so soon as the subscription shall be filled, the directors and president chosen, and application for that purpose made to Congress by the president and directors elected.”

On December 31 following Congress adopted “an ordinance to incorporate the subscribers to the Bank of North America.”

The first president was Thomas Willing, and the cashier was Tench Francis. The bank became at once a most important auxiliary in aid of the finances of the government, and so continued to the end of the war.

This institution was also incorporated by the State of Pennsylvania, on April 18, 1782.

Robert Morris subscribed for 633 shares of the bank on account of the United States, paying therefore $254,000, but, owing to the necessities of the government, he was almost immediately compelled to borrow a like amount from the bank, so that the institution derived but little benefit from the government subscription.

The deposits gradually assumed large proportions. Some of the States gave to the bank the assistance of their recognition. Connecticut made the notes receivable in payment of taxes, Rhode Island provided punishment for counterfeiting its issue, and Massachusetts created it a corporation according to the laws of that Commonwealth.

The operations of the bank were almost immediately attended with the restoration of confidence and credit. The State of Pennsylvania being unable to pay the officers of its army, relief was found in the bank, which advanced the money for the state, and received its reimbursement when the revenue was collected.

The public enemy infested the Delaware River and Bay, and seized vessels in the port of Philadelphia. The bank advanced $22,500, which enabled the merchants to fit out a ship of war, which not only cleared the river of the enemy, but captured a cruiser of twenty guns belonging to the BritishBritish fleet.

20The defense of the Western frontier was promoted by the advance of £5000 by the bank in 1782.

In the year 1785, when an ill feeling had arisen between the government of the State of Pennsylvania and the bank, the former repealed the charter which it had granted in 1782. The bank, however, continued its operations under the charter granted by the Federal Government till 1787, when it was rechartered by Pennsylvania.

The charter of the Bank of North America has been renewed from time to time, and was made a National Bank, December, 1864, and is still one of the leading financial institutions of the State and Nation.

It is one of the only three banks in existence at the time of the adoption of the Federal Constitution, the others being the Bank of New York, at New York City, and the Bank of Massachusetts, at Boston.