Sometimes we need to look back in history to see where the roots of something was formed. Finance and banking has always fascinated many people and in light of today’s developments, looking back seemed appropriate.
Robert Morris Jr. was born in England in 1734, and moved to Oxford, Maryland when he was 13. He later became a partner in the shipping-banking business with Thomas Willing in 1757 in Philadelphia.
The US was in a crisis in 1781. The treasury was in debt by $25 million and public credit had collapsed, Robert Morris Jr. would make good on the US’s debt from his own personal monies. With the failure of their own policies staring them in the face Congress changed from the committee systems they had used for years and created the first executive offices in American history. Morris held two of them, Finance and Marine. While his detractors worried he was gaining “dictatorial powers” he was granted what we would call today “executive authority”. In a unanimous vote, Congress appointed Morris to be Superintendent of Finance of the United States from 1781 to 1784.
Three days after becoming Superintendent of Finance Morris proposed the establishment of a national bank. This led to the creation of the first financial institution chartered by the United States, the Bank of North America, in 1782. The bank was funded in part by a significant loan Morris had obtained from France in 1781. The initial role of the bank was to finance the war against Britain.
This was the nation’s first de facto central bank, following in the footsteps of the Bank of England until 1785, when the Bank’s charter within the Commonwealth of Pennsylvania was revoked. It was succeeded in its intended role by the First Bank of the United States in 1791. The Bank of North America along with the First Bank of the United States and The Bank of New York obtained the first shares in the New York Stock Exchange.