Why Did Hamilton Support the National Bank?
Alexander Hamilton supported a national bank because the United States needed some way to recovery financially after the Revolutionary War. At the time, the United States had no common currency. The creation of a national bank would facilitate the creation of a common currency.
The creation of common currency was important because, on their own, the currencies of the various states had little value. Using one common currency put a significantly greater amount of financial support behind the currency and raised its value. It was necessary to create a national bank to distribute and manage the new currency. Hamilton’s concept of a centralized bank was adopted in 1791. The new bank was to operate for 20 years under the supervision of both the federal government and private individuals. The establishment of the bank was not without controversy, however. Many feared that the bank’s northern location would affect the decision to place the United State’s capital closer to the a midpoint between the northern and southern states. Others complained that the creation of a national bank fell outside the powers granted to government by the United States Constitution. Regardless, the bank operated for the 20 years for which it was originally chartered before being disbanded in 1811.