For "A Positive Profit": The Federal Investment in the First Bank of the United States, 1792-1802

Abstract

I N 1791, implementing Secretary of the Treasury Alexander Hamilton's recommendation, the government of the United States purchased 5,000 shares of stock, at $400 per share, in the Bank of the United States (BUS). This two-million-dollar investment, extraordinary by today's conceptions concerning government-business relationships, secured a 20 percent interest for the American people in the new, federally chartered corporation. Historians of the early national period have largely overlooked this aspect of the bank operation, focusing instead on the bank's role in the emerging political partisanship and the crucial question of the bank's constitutionality, rather than whether this investment was beneficial to the American taxpayer.1 This article examines the history of the investment, the stock's performance, and how the public's holdings were managed between 1792 and 1802, when the government sold its remaining shares. It also assesses the importance of the investment to the American people.