Editing Federal Reserve Act (section)

=== First Bank of United States ===
The American financial system was deeply fragmented after the [[American Revolutionary War]]. The government was burdened with large wartime debts, and the new republic needed a strong financial institution to give the country a resilient financial footing. [[Alexander Hamilton]] and [[Thomas Jefferson]] had opposing views regarding whether or not the US could benefit from a European-style national financial institution. Hamilton was in favor of building a strong centralized political and economic institution to solve the country's financial problem. He argued that a central bank could bring order to the US monetary system, manage the government's revenues and payments, and provide credit to both the public and private sectors. On the other hand, Jefferson was deeply suspicious of a central bank because, he argued, it would undermine democracy. Jefferson and Southern members of congress also believed that a strong central financial institution would serve commercial interests of the north at the expense of Southern-based agriculture interests whose credit was provided by local banks during the post-revolutionary war era.
[[First Bank of the United States|The First Bank of the United States]] was established in 1791 chartered for a period of twenty years. The US government was the largest shareholder of the bank. Despite its shareholder status, the government was not permitted to participate in management of the bank. The bank accepted deposits, issued bank notes, and provided short-term loans to the government. It also functioned as a clearinghouse for government debt. The bank could also regulate state-chartered banks to prevent [[overproduction]] of banknotes. While some credited the bank with helping stabilize government finances and influence the broader economy, it remained a source of controversy. Many [[Jeffersonian democracy|Jeffersonians]] argued that the bank was unconstitutional and concentrated too much financial power in a centralized institution.<ref>{{Cite book |last=Ellis |first=Joseph J. |url=https://archive.org/details/americansphinx00jose/page/145/mode/1up?q=central+bank |title=American sphinx : the character of Thomas Jefferson |last2=Rogers D. Spotswood Collection. TxSaTAM |date=1998 |publisher=New York : Vintage Books |others=Internet Archive |isbn=978-0-679-76441-0}}</ref><ref>{{Cite web |title=Founders Online: Opinion on the Constitutionality of the Bill for Establishing … |url=https://founders.archives.gov/documents/Jefferson/01-19-02-0051#:~:text=15%20February%201791-,Opinion%20on%20the%20Constitutionality%20of%20the%20Bill%20for%20Establishing%20a,laws%20of%20Forfeiture%20and%20Escheat. |access-date=2025-04-20 |website=founders.archives.gov |language=en}}</ref> In 1811, the first bank of the United States failed to be renewed by one vote in both the House and the Senate.<ref>{{cite web|url=http://www.let.rug.nl/usa/essays/general/a-brief-history-of-central-banking/the-first-bank-of-the-united-states-(1791-1811).php|title=The First Bank of the United States (1791-1811) < A Brief History of Central Banking in the United States - Edward Flaherty < General < Essays < American History From Revolution To Reconstruction and beyond|website=Let.rug.nl}}</ref><ref>{{cite web|url=https://eh.net/encyclopedia/the-first-bank-of-the-united-states/|title=The First Bank of the United States|website=eh.net}}</ref>