Early Banking in the United States: Experiments with Central Banking

In 1785, the Continental Congress adopted the dollar as the unit for the national currency. At that time, a variety of private notes were printed. After the ratification of the Constitution in 1790, Congress chartered The First Bank of the United States to operate until 1811 and authorized it to issue paper bank notes to eliminate confusion and facilitate commerce.

This bank also served as the U.S. Treasury’s fiscal agent, thus performing the first central bank functions in the United States. The privately owned bank was the subject of controversy, and its charter was not renewed. The Second Bank of the United States was given a twenty-year charter in 1816. President Andrew Jackson vetoed the recharter of the Second Bank.