The recent deal by Bank of America to purchase Fleet Bank was viewed as a defeat for Bank of America's crosstown rival, Wachovia Bank, which was characterized by many as being left in the dust by the nation's largest retail bank.
Wachovia, which recently changed its name from First Union, can no longer claim it is "the largest retail banking franchise on the East Coast." It still, however, can claim something even more important, in my opinion, that Bank of America may be tempted to but cannot claim.
The New York Times reported on Oct. 28 that "Fleet's roots in Boston go back to 1784, when, as Massachusetts Bank, it was the first federally chartered bank in the United States." This would mean the storied Bank of America, with its purchase of Fleet, would hold the nation's first federal banking charter.
In fact, America's first private bank of a modern type, Bank of North America, was established on Chestnut Street in Philadelphia in 1781 by the likes of Ben Franklin, Alexander Hamilton, and Robert Morris. Chartered by the state, like the ones that followed a few years later in Boston and New York, the Bank of North America was absorbed into other banks and ultimately into First Pennsylvania Bank, which was bought by CoreStates, which was, in turn, bought by First Union, now Wachovia.
The Office of the Comptroller of the Currency's Web site (
This first federal banking charter went to the same bank that traced itself back to Bank of North America. In fact, when First Pennsylvania Bank went charter shopping in 1974 after a dispute with the Federal Reserve, one of the supposed reasons "First Pennsy" gave for its charter switch to the OCC was that the bank could now trace its roots back to the first national bank charter.
While the above banks are private banks, they should not be confused with government-chartered central banks. The First Bank of the United States, also on Chestnut Street, was suggested by Treasury Secretary Alexander Hamilton, chartered by Congress, and approved by President George Washington in 1791, when Philadelphia was still the nation's capital. (Yes, not D.C. but Philadelphia!) This bank was needed to help us recover from our Revolutionary War debt.
Likewise, the Second Bank of the United States, also on Society Hill near Independence Hall, was authorized in 1816 by President Madison.
While Philadelphia is truly the "Birthplace of American Banking," my friends in Boston continue to argue this point. We have similarly debated on the first mutual savings bank, the first savings and loan, and the first credit union. I have concluded that Philadelphia was the site of the first in each case, but they always come up with an opposite conclusion.
With this latest merger, Bank of America will be able to claim a lot of new "firsts" and "number ones," but state and federal charter No. 1 is the property of Wachovia.
