Second Report on Public Credit

In United States history, the Second Report on the Public Credit, also referred to as The Report on a National Bank, was the second of four influential reports on fiscal and economic policy delivered to Congress by the first U.S. Secretary of the Treasury, Alexander Hamilton. Submitted on December 14, 1790, the report called for the establishment of a central bank with the primary purpose to expand the flow of legal tender, monetizing the national debt by issuing of federal bank notes.

Modeled on the Bank of England, the privately held but publicly funded institution would also serve to process revenue fees and to perform fiscal duties for the federal government. Hamilton regarded the bank as indispensable to produce a stable and flexible financial system.

The ease with which Federalists advanced legislation to incorporate the bank impelled agrarian opposition that was hostile to Hamilton's emerging economic nationalism. Resorting to constitutional arguments, Representative James Madison challenged Congress's broad authority to grant charters of incorporation under the "necessary and proper" clause of the US Constitution and charged Hamilton with violating a literal, strict constructionist interpretation of the founding document.

Despite Madison’s objections, the Bank Bill of 1791 penned to form the First Bank of the United States passed without amendment in the US House of Representatives by a vote of 39-20 on February 8, 1791. The bank was endowed with a 20-year charter.