This article will conclude my national banks “race to the first”…kind of.
Earlier we explored banks who were first to receive the first national charter starting from the West Coast, moving to the East. This time I’ll explore the first national bank chartered in all of the United States.
To set the stage, remember that Philadelphia was historically the major Colonial financial center. This is why our Declaration of Independence was authored and signed in Philadelphia and why Philadelphia served as our young nation’s first capital city.
During the Revolutionary War, Robert Morris, a Philadelphia businessman and our nation’s Superintendent of Finance, decided to form the first bank. He petitioned the Continental Congress for authorization and gained a charter on December 31, 1781. Morris’ goal was to satisfy the financial needs of our national government, the Commonwealth of Pennsylvania, and Philadelphia merchants.
While raising $400,000 of capital to fund the new enterprise, Morris received subscriptions from a wide swath of present period leaders. Names of founding stockholders read like a list of our Founding Fathers: Thomas Jefferson, Benjamin Franklin, Alexander Hamilton, James Monroe, John Jay, and John Paul Jones. (Isn’t it interesting that the first four names have all been featured on U.S. currency?) Also note that Alexander Hamilton would later go on to start the Bank of New York in 1784, and serve as our nation’s first Secretary of Treasury!
Upon considering where to locate the first offices of the Bank of North America, Robert Morris selected the store of Tench Francis on Chestnut Street in Philadelphia, a fellow merchant and agent for the William Penn family. Operations started on January 7, 1782, a mere week after having received its charter. Tench Francis also served as the bank’s first Cashier, a position similar to today’s CEO.
Following its opening, there was some question as to whether the Continental Congress had proper authority to grant a banking license, so the conservative management sought a duplicate charter from Pennsylvania three months later.
Very quickly, the Bank of North America gained a reputation for prudent, fair business dealings. While other banks would be founded in New York and Boston in 1784, in Providence in 1791 and in Baltimore in 1795, the Bank of North America was viewed as the primary bank in America at the end of the 18th century. When Thomas Jefferson wrote a draft for $100, he simply addressed it “to the Cashier at the Bank.” It was understood that “The Bank” was the Bank of North America.
The Bank of North America provided badly needed financing to our early government during the Revolution including $80,000 to the State of Pennsylvania. Then during the War of 1812, the Bank of North America provided $650,000 emergency loan to the Federal Government. And during the Civil War, the Bank of North America provided over $4,500,000 in credit to the Federal Government.
Congress returned a favor to the Bank of North America in 1864 when The Bank was given special approval to seek a national bank charter without changing its name. While this may seem insignificant, every other national bank has always been required to include the word “National” in its formal name.
When I visited New York as a kid, I thought the “N.A.” in “Citibank, N.A.” stood for North America, meaning its operations in North America as opposed to its global operations. The N.A. actually stands for “National Association,” meaning a national charter. The Bank of North America received national charter #602 on December 8, 1864.
You may ask how this organization relates to Wells Fargo. Well, The Bank of North America continued to prosper using its original name until it merged in 1929 with the Pennsylvania Company for Insurances on Lives to form the Bank of North America and Trust Company. This institution then merged with the First National Bank of Philadelphia in 1955 to form The First Pennsylvania Banking and Trust Company. And this firm became Corestates which was acquired by First Union, which became Wachovia Bank.
So you see, this bank’s proud heritage and its founding stockholders are now part of Wells Fargo’s family!
Oh, and remember the bank’s first Cashier, Tench Francis? I immediately recognized his name as the founding father of the U.S. Navy Supply Corps. In 1795 President Washington selected him to centralize all the Navy Pursers as the first Purveyor of Public Supplies for the United States Navy. Given that I’m a Supply Corps officer, I was tickled to see both his name and John Paul Jones as part of our Wells Fargo lineage!