The Origins of Commercial Banking in America, 1750-1800

The nature of America's early economy has been hotly contested for several decades. Historians have often focused on the question of when America became "capitalist," while economists have tried to determine when American economic growth sped up. In The Origins of Commercial Banking in America, Robert E. Wright argues that the ultimate causes of American economic development and transformation into a modern society can be reduced to the causes of American banking. In the first full analysis of the origins of American commercial banking since Bray Hammond's monumental study forty-five years ago, Wright skillfully examines the political and economic forces that contributed to the origins and rise of banks in cities such as Philadelphia, New York, and Boston, as well as in smaller towns servicing rural America. Wright expertly assesses the impact of the war for independence, Superintendent of Finance Robert Morris' policies under the Confederation, the economic and political effects of the postwar depression of 1784-86, the attempts of the Constitutional Convention of 1787 to address the country's economic problems, and Secretary of the Treasury Alexander Hamilton's financial program under the new Constitution. Wright looks at both the macro and micro sides of issues—how state and national governments addressed problems and chartered (and sometimes unchartered banks) as well as how private individuals tried to cope with the need to obtain capital and the effects on them of early bankruptcy laws. He describes the varied and sometimes arcane financial and commercial instruments that existed both before and after the establishment of banks, and how they fostered economic development. We are introduced to an emerging capitalist system struggling to provide capital needed by America's voracious economy. The Origins of Commercial Banking in America is essential reading for anyone interested in the political and economic origins of the early republic.