into bankruptcy because they had overexteded their loans and discounts(Foner/Garraty, 192).
             Within the first few years of independence, it was almost natural that more trust was needed in the banking system. "The thinking of the time favored the establishment of a single quasi-governmental bank in each state that would operate in the public interest under private management. The overriding fear of political leaders was that excessive numbers of banks or loans too much in excess of specie reserves would hobble the taxing and spending functions of government by swamping the economy in depreciated paper. Political leaders also recalled very well the wild inflation resulting from unrestrained governmental issues of continental and state bills of credit (paper money) during the Revolution, and in the Constitution they barred the states from issuing them"(Foner/Garraty, 192).
             These forces led to the creation of the First Bank of the United States. As will be noted below, this was a quasi-central bank
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