The Republican. [volume] (Oakland, Md.) 1877-current, 1927-12-08
AMERICAS FIRST REAL
BANK STILL IN BUSINESS
Was Founded In Philadelphia in
1871 to Give Support to Gen.
WashingtOn's Army.


'Wrlrse, there were occasional attempts
~ banking during the early colonial
period, but no institution was formed
that approximated banking as we
know it today. The early colonial
conception of a bank was that of a
company or partnership formed to
supply circulating notes as medium
of exchange, in addition to the bills
of credit of the colonial governments.
1t was believed that if such notes were
based on landed security, current re-
demption would not be necessary.
Thus no capital was required for
starting bank, but merely confidence.
The assumption that giving security
for the ultimate paying of paper cur
rency is the same as providing for
its redemption at any time, or that it
will answer the same purpose, is an
economic fallacy. 1t confuses the
promise to pay with money itself. The
promise to pay is Of face value only
when there is certainty of it's fulfill
ment at some future indefinite time,
and, when land is the security, the
time is usually remote. A paper cur
rency must be promptly redeemable
in coin. No kind Of security is sub
stitute for such redemption.
But to get back to the Bank Of
fn11oTtnd
Robert Morris. Morris conceived that
a bank with a paid-up capital, on a
specie basis, and in high credit, as he
put it in his own words, would have
the interest of a stock two or three
times larger than that which it really
possessed" By this he meant that
the bank could lend it's credit, and re-
ceive interest therefor to an amount
of two or three times more than its
cash on hand. This conception is
absolutely sound and it is the founda-
ton of modern banking.
Our banks today lend their credit.
For instance, man comes in and de-
sires to borrow 100000 Nine times
out of ten, he doesn't want to take
$1,000 out the door with him, but he
merely wants that much to his credit
to draw upon, so the bank may be said
to be lending it's credit more than its
cash. When Robert Morris conceived
this idea back in Revolutionary days,
he founded modern banking.
The Bank of North America had a
], capital of S4OO,OO0.O0, part of which
gwas subscribed by the government.
The Bank made large advances to the
government, which enabled America
to prosecute the war more efficiently
than ever before. Besides that it did
a general discount and commercial
business.
Though Morris was the genius who
made the bank possible, he was
neither a director nor president,
mode,stly consenting to assume the
title of vice-president, and refusing
higher honor. The president was
Lawrence Jackson, well educated
and extremely capable man. Among
the under officers were such names as
Shelby, Kuyler, Place, and Higgins,
all we'll known in their day, but signi-
flying little or nothing to us now. The
most notable Of these was Shelby,
who was a young man of eXtraordl-
nary energy and financial ability. He
was also considerable of dandy
about town. He lived with his senior
officer Jackson down by the river
front.
The story is told that one morning
at five o'clock as Jackson was arising
to begin his daily work he saw Shell
by fully dressed in the living room.
"Good morning." said jackson
Good night" said Shelby rather
sleepily
But, as has been said, Shelby was a
man of tremendous energy and few
hours later he carried his brilliant
mind down to the bank Of North
America and started laboring on the
many problems which the Bank must
have had to face.
The charter of the Bank of North
America was repealed by the state OF
Pennsylvania in 1885, because the
state became convinced that the insti-
tuition tended to promote inequality
among citizens, by favoring one in the
matter of loan against another. The
state repented soon and in 1877 gran
ted a new charter, which was renewed
from time to time and under which it
continued until the national banking
law was passed. 1t declined at first
to enter the national banking system.
because it would have to change its
name, but finally, on account OF Its
illustrious origin, permission was
eigranted it to come in without such a
- change. The Bank Of North America
is still in existance in Philadelphia
1t is now one hundred and forty-six
years old and has passed its semi
annual dividend only five times in the
history of its long career, a record to
be exceedingly proud of, and tribute