The American Banking System from 1800 to 1810Looking back to the early 19th century, it is impossible to say that a true banking system was actually developed in the United States. This is to say that although there were around 120 private commercial banks established by the new state governments, the so-called system was poorly organised. It was ad hoc in nature and directly linked to the business banking practices of the pre-independence period. The years before the turn of the century were important because they brought a central banking authority onto the scene. In 1789 the new federal government created the position of Secretary of the Treasury. As we know, the first to hold this prestigious title was Alexander Hamilton. He accomplished a great deal in the 11 years before 1800. In particular, his actions were largely responsible for the creation of the First Bank of the United States, which was chartered in 1791. This push toward central banking only lasted 20 years, however. years. Pending revision in 1811, the bank's charter was not renewed. This article will argue that the failure to renew the charter of the First Bank of the United States was a direct result of the stark ideological differences between state-centered and federalist politics. Many were very skeptical of a strong centralized banking system, while others believed that the only way to create unity in the country was through a highly focused central banking system. Despite the relative efficiency of the First Bank of the United States, and despite the fact that it is widely considered a success by economic historians, general suspicion of the banking system led to its demise. In other words, this article will argue that the period 1800-1810 was a time of intense tension between centralists and decentralists. This had important and long-lasting effects on the banking system, the most obvious of which was that, over the next century, state banks proliferated to the point of being chartered with abandon. As John K. Galbraith noted, “any place large enough to contain a church, a tavern, or a blacksmith shop was considered a suitable place to open a bank. These banks issued banknotes and other more surprising enterprises, imitating the banks, did the same. Even barbers and bartenders were competing with banks in this respect" (Flaherty, 1997: http://odur.let...... half of the document ...... institution, and on the basis of the bitter conflicts between Madison and Hamilton on state versus federal power, the bank itself became politicized as state-led forces increased in popularity, it is not entirely surprising that the First Bank of the United States was one of the first to disappear. DeCarolis, Lisa Marie Energia (accessed 12-12-99) Del Mar, Alexander. “History of Monetary Systems: Chapter XVII: Suspension of Banking from the Era of Private Coinage” History of the World, 01-01-1992 Foner, Eric., Garraty , John A (ed.) “Banking” The Reader's Companion to American History, Houghton Mifflin: New York, 1991., p. 191Flaherty, Edward 1997. A Brief History of Banking in the United States (accessed 12- 12-99) "James Madison discusses the constitutionality of a national bank" (accessed 12-12-99)