An independent bank for an independent nation
Bank of America’s oldest heritage bank, the Massachusetts Bank, helped early New Englander’s gain financial independence from England. The bank also helped establish the beginning of the China trade in the United States.
The year was 1784. The Revolutionary War was officially over. Thomas Jefferson led a congressional committee to propose two significant events that would change the course of history for the newly free United States of America. First, to divide up sprawling western colonies into states equal with the original 13. Second, to ban slavery in the United States after 1800, a proposal that was narrowly defeated, but which set the stage for the future Emancipation Proclamation. That year was also the beginning of the China Trade, funded in part by Bank of America’s oldest heritage bank—the Massachusetts Bank. After the American ship Empress of China arrived at Canton, China and returned with goods including silks and tea, the event incited many American merchants to enter the trade. It was a year of new independence and progress.
In 1784, Boston was a thriving port city. Although the young country had won political independence, its citizens had to do their banking through wealthy merchants managed by the Bank of England. The merchants accepted deposits, made loans and issued drafts. But this didn’t fit with the times. It was Boston, after all, a hotbed of activity, including the Boston Massacre and the Boston Tea Party. Its revolutionary spirit demanded growth and change. The people of Boston believed the establishment of an independent bank would lead to greater self-sufficiency and autonomy from England.
A group of local merchants rallied together to petition for the formulation of such a bank. Together, they wrote a proposal stating that the petitioners had been:
“…taught the experience of many nations that well regulated banks are highly useful to society, as they promote punctuality in the performance of contracts, increase the medium of trade, facilitate the payment of taxes, prevent the exportation of and furnish a safe deposit for cash, and in the way of discount [loans], render easy and expeditious the anticipation of funds at the expense only of common interest...”
The Massachusetts legislature received the proposal well and swiftly passed it. In February, 1784, Samuel Adams, president of the Massachusetts Senate at the time, sent the petition to Governor John Hancock, who placed his now-famous signature on the document granting that “said bank shall be a corporation and body politic under the name of the president and directors of the Massachusetts Bank.” With this, the Massachusetts Bank was the first joint stock–owned bank in the United States and only the second bank to receive a federal charter.
Early account holders at Massachusetts Bank included the patriot, Paul Revere; Josiah Quincy, mayor of Boston and President of Harvard College; the governor of Massachusetts, John Hancock; and General Henry Knox, who served as Secretary of State under George Washington. The bank’s first president was James Bowdin, an intellectual who consulted with Benjamin Franklin on his experiments with electricity and who would later serve two terms as governor of Massachusetts. The bank opened for business on July 5th, 1874 and was the only bank in the city of Boston for eight years.
The Massachusetts Bank went on to finance not only the earliest U.S. trade missions to China but also the first voyage of an American ship to Argentina, instituting what would become a long-standing presence in Latin America. These early ventures set a precedent for Bank of America’s role in the development of our global economy, which continues to this day.
Visit one of our Heritage Centers for an up close look at this and other stories from our bank’s history. Learn more