The creation of the First National Bank in 1791 during the administration of George Washington (1732-1799; see entry in volume 1) was one of the most controversial issues facing the young nation. Opponents argued that the bank was an expansion of federal power not authorized by the Constitution and an intrusion on the rights of states. Debate over the bank, which controlled the nation's money supply, continued through the 1840s.

The charter (an official form of recognition and guidelines) for the federal bank was authorized in 1791 and renewed for twenty years in 1816, when the Second National Bank was formed. Congress moved early—in 1832—to renew the charter, four years before it was due to expire. That was an election year, and Henry Clay, who led support for the National Bank...