The Magic Trick

In 1791, the first Secretary of the Treasury of the US, Alexander Hamilton, convinced then-new president George Washington to create a central bank for the country. Secretary of State Thomas Jefferson opposed the idea, as he felt that it would lead to speculation, financial manipulation, and corruption. He was correct, and in 1811, its charter was not renewed by Congress.

Then, the US got itself into economic trouble over the War of 1812 and needed money. In 1816, a Second Bank of the United Sta...