The Banker Who Made America

  

“The Banker Who Made America

 

By Richard Vague

 

Polity, 438 pages, $35

 

Patriotism, George Washington wrote from Valley Forge in 1778, "must be aided by a prospect of interest or some reward." If Washington represented the patriotic side of the American Revolution, Thomas Willing, America's leading merchant and banker at the time, represented the interested side. A devotion to both impulses has marked America's democratic experiment from the beginning. But while Washington is remembered as the foremost of the Founding Fathers, Willing (1731-1821) has fallen into obscurity.

 

Richard Vague's "The Banker Who Made America" rescues Willing from oblivion, declaring his subject "the most powerful figure in early American history that you've likely never heard of." As the first president of the Bank of the United States, Willing, Mr. Vague writes, "was the dominant economic force in the country."

 

Willing was born into a prominent Philadelphia family. He inherited a modest fortune and quickly emerged as the leader of the city's conservative business establishment. He helped organize the colonies' resistance to Britain, but stopped short of supporting independence.

 

"The rich are in general slaves to fear," Thomas Paine wrote in "Common Sense" (1776), first published in Philadelphia, "and submit to courtly power with the trembling duplicity of a spaniel." No pamphlet did more to convince Americans to declare their separation from Britain, but it seems to have left Willing cold. As a delegate to the Continental Congress, he voted twice against adopting the Declaration of Independence. He "made his fortune by becoming an expert in saying no when he needed to," Mr. Vague suggests, though fortunes are typically kept, not made, in that way.

 

In November 1777, as most patriots fled Philadelphia before its capture by the British, Willing remained and collaborated. He even negotiated a proposed truce with Britain's Gen. William Howe, which granted Americans almost everything they could ask for except their independence. Willing duly forwarded Howe's offer to the Continental Congress. There were shouts of treason, but Gen. Washington intervened on Willing's behalf, calling him a "worthy, well-disposed man." Willing remained on good terms, and profitably in business, with both the British and the patriots.

 

The Bank of England made the British Empire the mightiest in the world, but the North American colonies remained a financial backwater as they struggled to assert their independence. No banks equivalent to those that proliferated in 18th-century England existed in America, and many hoped a republic of yeomen farmers could do without them. "A banking Aristocracy is not better," John Adams grumbled, "than any other Aristocracy."

 

But Alexander Hamilton, among others, recognized that a national bank, in harnessing private wealth to create public credit, was as vital to independence as a military victory. The challenges of keeping an army fed and armed gradually imposed this insight on even the most obdurate members of the Continental Congress. Thus in 1781 the Bank of North America was born. It was the first commercial bank on the continent.

 

Seeing the need for a bank is one thing; successfully running one is another. This was the novel task that fell to Willing. He had no practical experience in banking, but then neither did anyone else in America. What he did possess, however, was the confidence of the financial community the bank was meant to harness and serve -- confidence the Continental Congress desperately needed.

 

The business of banking, Willing wrote, "was a pathless wilderness, ground but little known to this side of the Atlantick. All was to us a mystery." But under Willing's leadership, the bank thrived, though it could do little to compensate for the financial weakness of the national government under the Articles of Confederation, which entrusted only the state governments with the power to tax. Three years into his tenure, Willing could boast that the bank had thus far avoided a single "material loss, or even mistake of any consequence."

 

In managing the bank, Willing worked closely with Robert Morris, the superintendent of finance (in effect the Treasury Secretary), who had also been Willing's longtime partner in the mercantile firm Willing, Morris & Co. The partners conducted private business alongside that of the government, creating obvious potential for conflicts of interest.

 

But Willing largely avoided the hostility the bank itself generated for enriching a privileged elite. Even John Adams -- not an easy man to charm -- referred to Willing as "the most agreeable man."

 

In 1791, when a much stronger federal government chartered the Bank of the United States, Willing was the obvious choice to run it. The bank was the government's lender, principal depository and financial agent. But it was capitalized primarily by private investors, and it was established to facilitate private as well as public business.

 

Willing retained the confidence of the elite community that owned and used his bank. By the late 1790s, the bank was responsible for most commercial lending in the country. Willing oversaw its vast operations with a punctilious vigilance that earned him the nickname "the old regulator." He was, Mr. Vague writes, "a colossus presiding over the financial landscape of the new republic."

 

Though Thomas Jefferson came to power in 1801 in large part by opposing the bank, he left both it and Willing alone. We credit Jefferson with purchasing the Louisiana Territory from France in 1803 for $15 million. But it is more accurate to say Willing and his associates purchased it, then resold it to the United States, while keeping a few million in fees for themselves.

 

Mr. Vague, a former secretary of banking and securities for the state of Pennsylvania, writes with an expert's assurance on the financial history of the era. And he is admirably fair-minded in assessing both Willing's achievements and the grievances of his critics. Willing was a facilitator and a beneficiary of government favoritism, Mr. Vague acknowledges, but that favoritism, adeptly channeled, allowed a fragile government to attract the support of wary capitalists. Willing himself, however, never comes into view. The banker operated like a sphinx at the center of some of the most interesting and polarizing events in our history.

 

"My success in life has not been derived from superior abilities, or extensive knowledge, a very small and scanty share of either having fallen to my lot," Willing wrote in a short autobiography in 1786. "It can only be ascribed to a steady application to whatever I have undertaken, a civil and respectful deportment to all my fellow citizens, and to an honest and upright conduct in every transaction of life."

 

Here is the voice of a new species created by the Revolution, at once mundane, formidable and distinctly American. It combines sharp-eyed intelligence with genuine modesty and leavens clever opportunism with the recognition that all men are created equal, even if some are less equal in their instincts for getting paid.

 

One might prefer the selfless virtue exemplified by Washington, the yeoman simplicity imagined by Jefferson. But it is the Willings of America who made this country the economic wonder that it is.

 

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Mr. Rowe is an assistant professor of history at New College of Florida.” [1]

 

1. REVIEW --- Books: When There's A Willing There's a Way. Rowe, Adam.  Wall Street Journal, Eastern edition; New York, N.Y.. 18 July 2026: C7.