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On December 15, 1790, Hamilton submitted a report to Congress making the case. He proposed a Bank of the United States with a $10 million capital (then five times more than all other American banks combined) and the ability to issue paper money. It would be based in Philadelphia and chartered for 20 years.
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The pet banks definition in U.S. history were state banks that were selected to receive surplus Federal Treasury funds in 1833. These pet banks were state run banks that were loyal to President Andrew Jackson. The ''pet bank'' nickname came from this relationship.
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This bill passed Congress, but Jackson vetoed it, declaring that the Bank was "unauthorized by the Constitution, subversive to the rights of States, and dangerous to the liberties of the people." After his reelection, Jackson announced that the Government would no longer deposit Federal funds with the Bank
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The bank's charter was unfair, Jackson argued in his veto message, because it gave the bank considerable, almost monopolistic, market power, specifically in the markets that moved financial resources around the country and into and out of other nations.
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Historians have traditionally attributed the Panic of 1837 to a real estate bubble and erratic American banking policy. Most speculation concerned western land opened to settlement after Indian removals, but northeastern forests were among the most overvalued holdings.