of his first acts, as shown by Lewis, was the unfolding of a
plan which led to the establishment of the first Bank of the
United States.

In March, 1789, a great and fortunate change took place in the
management of American public affairs. The Constitution of the United
States went into operation. A vigorous, responsible executive was
conferred upon the country, and an incredible impulse given to all
schemes of national importance. Among those now called upon to take part
in the administration of public affairs was Alexander Hamilton. Placed
in charge of the Department of the Treasury, he found before him the
prodigious task of settling the financial affairs of the United States
upon a sure and satisfactory basis. Toward the attainment of this end no
measure seemed more important to him than his old and favorite one for
the establishment of a national bank. Without loss of time he devised a
plan for such an institution which seemed to him practicable, and in
1790 spread before Congress the result of his labors.

"The establishment of banks in this country," says Hamilton in the
course of his report, "seems to be recommended by reasons of a peculiar
nature. Previously to the Revolution, circulation was in a great measure
carried on by paper emitted by the several local governments. This
auxiliary may be said to be now at an end. And it is generally supposed
that there has been for some time past a deficiency of circulating
medium.

"If the supposition of such a deficiency be in any degree founded, and
some aid to circulation be desirable, it remains to inquire what ought
to be the nature of that aid.

"The emitting of paper money by the authority of government is wisely
prohibited to the individual States by the national Constitution; and
the spirit of that prohibition ought not be disregarded by the
Government of the United States.

"Among other material differences between a paper currency issued by the
mere authority of Government, and one issued by a bank, payable in coin,
is this: that in the first case there is no standard to which an appeal
can be made, as to the quantity which will only satisfy or which will
surcharge the circulation; in the last, that standard results from the
demand. If more should be issued than is necessary, it will return upon
the bank. Its emissions must always be in a compound ratio to the fund
and the demand. Whence it is evident that there is a limitation in the
n