As the US celebrates 250, remember the cradle of its banking industry

• Key insight: Washington, D.C., may be the epicenter of the nation's birthday celebrations, but the financiers, financial institutions, and city that funded it deserve some attention, too.
• Supporting data: Philadelphia was our nation's birthplace, our capital before 1800, our first financial center and our largest city when the Constitution was ratified in 1789.

• Forward look: Our nation's 250th anniversary is being celebrated without properly recognizing the many institutions and financiers who made independence possible.

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Living in Philadelphia's Society Hill during the 1976 Bicentennial was a banking historian's dream come true.

Most Americans experienced it through the lens of patriotism and politics. I experienced it through the lens of banking history.

Philadelphia didn't just host the Founding Fathers. It financed them.

Philadelphia gave us the bank that funded Washington's army, the brokers who built our first capital markets, and the institutions that turned a fragile new republic into a creditworthy nation.

Unfortunately, as was the case 50 years ago, our nation's 250th anniversary is being celebrated without properly recognizing the many institutions and financiers who made independence possible.

From our townhouse at the corner of 4th and Spruce, I would regularly walk past our nation's first commercial bank of a modern type. This was the Bank of North America, chartered in 1781 at 3rd and Chestnut by financier Robert Morris to fund the Revolutionary War.

A few blocks away, I visited our nation's first central banks, the First and Second Banks of the United States, established in 1791 and 1816 by Alexander Hamilton and James Madison, respectively.

On the way to visit historic Independence Hall, I'd pass the Philadelphia Board of Brokers at 2nd and Walnut, founded in 1790 as our nation's first real stock exchange.

Sorry New York, but Philadelphia was our nation's birthplace, our capital before 1800, our first financial center, and our largest city when the Constitution was ratified in 1789. When my grandfather arrived at Ellis Island, he moved straight to Philadelphia where he became a door-to-door salesman.

Besides being the birthplace of American banking, the City of Brotherly Love is also home to our first savings and loan in 1831 and our first mutual savings bank in 1816, the Philadelphia Savings Fund Society, or PSFS, where I had an account.

Most celebrations of our 250th anniversary, technically a "semiquincentennial," are on the East Coast.

New York, with its controversial mayor and clowning courtside celebrities hot off celebrating the Knicks' NBA championship, will remind everyone that it is the world's most important city and financial capital. Signature anniversary events include a tall ship parade, Macy's fireworks and Times Square celebrations.

Washington, D.C., flush with federal money and forever-feuding politicians, where governing sometimes seems like a joke, is the focus of the nation's celebration. There are many made-for-television spectacles, including the White House's UFC Octagon spectacular, the Great American State Fair, National Mall festivities, military parades, concerts, and, of course, fireworks.

Meanwhile, Philadelphia, with clowns to the left and jokers to the right, is stuck in the middle, celebrating with food festivals, fireworks, parades, music events, neighborhood block parties, replica Liberty Bells, and hot-air balloons.

Other than the long-overdue, federally funded restoration and reopening of the First Bank of the United States, Philadelphia is largely ignoring the extraordinary financial legacy that helped build our nation, including financiers like Stephen Girard, Morris, and Haym Salomon who sacrificed their personal fortunes to support American independence. How can we celebrate our Founding Fathers yet forget the financiers who funded them?

I am a proud "Miamiadelphian," living in Miami but visiting Philadelphia almost every month since relocating in 1987. This month I visited the historic banking sites, recalling the time when being a Philadelphia banker was almost like being a Philadelphia lawyer.

Great banking names like Fidelity, First Pennsylvania, Girard Bank, Provident National Bank, and Philadelphia National Bank, the original PNB, are gone. All that's left is the PSFS sign in Center City.

Philadelphia's banking history includes the storied national banking charter #1, traced back to The First National Bank of Philadelphia, chartered by the Office of the Comptroller of the Currency in 1863 to help fund the Union Army. That charter, now held by Wells Fargo Bank, goes back through the fabled "First Pennsy" and CoreStates Banks.

One of my banking case studies when I taught finance at Wharton revisited the disastrous 1998 takeover of Philadelphia's favorite hometown bank, CoreStates, by North Carolina's First Union. Post-merger customer service was so bad that First Union had a record 20% defection rate, far above the normal 5% to 10% post-merger rate.

Adding insult to injury, Philadelphia's favorite CoreStates Spectrum, the home of the NHL Flyers and NBA 76ers, was rebranded as the First Union Center. First Union's cost cutting and poor service led it to become locally known as the "FU Bank." Philly's fans, who once pelted Santa Claus with snowballs, never forgive bad banking service.

The FU Bank disaster produced another first in American banking: a top-ten bank forced to rebrand itself with the name of a much smaller acquired bank to shed its toxic customer service image. First Union, then the nation's sixth largest, became the fourth largest after buying Winston-Salem's Wachovia Bank in 2001, adopting the Wachovia name most customers never heard of and couldn't pronounce.

Philadelphia is also the birthplace of convenience banking. The FU Bank wreckage ironically gave rise to "America's Most Convenient Bank." Commerce Bank, based in nearby Cherry Hill, New Jersey, exploited First Union's missteps and disrupted the industry with customer-friendly "WOW banking."

Founded by a former Burger King franchisee, Commerce Bank's "Have it your way" banking offered seven-day hours, instant ATM cards, no overdraft fees, free coin counters, and lollipops and dog biscuits at its "stores." Their motto: "No Stupid Fees, No Stupid Hours." TD Bank bought Commerce Bank and still uses "America's Most Convenient Bank" as its official slogan.

Today, Philadelphia is our sixth most populous city, but none of its top ten banks are based there. Like much of urban America, Philadelphia has become a "banking colony," with Bank of America and Wells Fargo each controlling roughly 20% of the city's deposits.

Much has changed in Philadelphia since I walked those Bicentennial streets.

Hometown banks are gone. Coveted charters were moved. Historic banking names disappeared. Financial decision-makers long ago left town. Nothing's left but granite banking tombstones repurposed into restaurants and retailers.

Time changes many things, but not history.

Celebrating America's birthday is easy. Remembering what it commemorates is harder: Philadelphia gave birth not only to American independence, but to American banking.