Wharton professor Jeremy Siegel, author of the bull-market bible Stocks for the Long Run, says the U.S. financial system has given him plenty of opportunity. For which he’s grateful.
Now he’s picked a neighborhood landmark to pay the debt forward. From his apartment in Society Hill Towers, Siegel and his wife, speech pathologist Ellen Schwartz, can look down on colonial Philadelphia and the South Third Street address where American finance began: The stone-temple-fronted First Bank of the United States, built in 1795, and vacant since 2000.
“It’s a wonderful building. I’ve always been disappointed that it’s closed,” Siegel told me Monday.
Siegel confirmed he’s agreed to donate $1 million toward the $26 million First Bank restoration plan led by builder Tom Caramanico and Independence Historical Trust (new name for the Friends of Independence National Historical Park). He said his friend Gerry Lenfest, the former cable TV mogul (and past Inquirer owner), is giving another $1 million, which others in the funding campaign confirmed. Officials of Lenfest’s foundation didn’t immediately return calls seeking comment.
The group has additional private donors, and is seeking federal and state funding. Backers are waiting on word from Gov. Wolf, who has final say on an $8 million request for state matching funds from the Redevelopment Assistance Capital Program.
Also watching with interest are members of the Avenging the Ancestors Coalition, a Philadelphia group of “citizen preservationists” who advocated successfully for including stories of George Washington’s slaves at the park’s President’s House exhibit on Independence Mall. “I am not opposed to the First Bank restoration. I am opposed if public money is to be used to whitewash history,” member Faye M. Anderson told me.
Anderson said public support should be contingent on organizers committing to tell not only the fiscal history, but also the broader context of the bank’s role in the economic and social history of the early Republic, including the work of First Bank supporter and eventual purchaser Stephen Girard, a French ship captain turned pioneer American capitalist, whose assets included slaves, and whose investments included opium along with many other cargoes.
Siegel said Caramanico, whom he didn’t previously know, persuaded him to back the project after Caramanico promoted it this spring at the Hopkinson House condo tower on Washington Square. He said his wife convinced him to attend the talk, noting that “my degree is in monetary policy — this is what I teach,” including the history.
But the city’s early history as a banking center is not often presented, Siegel adds. “Alexander Hamilton did his work [on central banking] in Philadelphia. We were the only major country that didn’t have a bank. Hamilton said, ‘we need a bank!’ This is where he convinced George Washington to support a 20-year charter,” Siegel said.
The bank, on Third Street between Chestnut and Walnut Streets, was popular among its investors and its borrowers, but its charter “was not renewed, because of populists. The Jeffersonians attacked it,” Siegel added.
The bank was tight with its credit, which disappointed and angered small business owners looking for ready cash. That spurred investment in private lending, which helped make New York the nation’s financial center, as it had already become the leading port.
Siegel said even Jefferson’s treasury secretary, Albert Gallatin, eventually “admitted we could not run the country without a bank.” After it lapsed, and Girard personally financed the War of 1812 — a French patriot, he was glad to challenge the British — a Second Bank was chartered, around the corner from the First, which had become Girard’s private bank. The later bank is maintained as the park’s Second Bank of the United States Portrait Gallery.
After decades with no central bank — and boom-and-bust state and private financing — the Federal Reserve was proposed by bankers and approved by Congress as a decentralized central banking system, with self-governing regional Fed banks in Philadelphia and other cities. But since the 1980s, Philadelphia’s once-vigorous regional banks, which took over First and Second Bank assets when their federal charters lapsed, have all been sold to bigger out-of-town companies. The city is full of former banking spaces that are now restaurants, office and university buildings, bank branches, and in these most historic cases, government properties in need of regular maintenance.
Siegel, a Chicago native, said he’s excited to help reopen the First Bank building, just as his wife, a Philadelphia native, has joined the group seeking to hang the Bicentennial Bell gifted by Britain in 1976 in a garden structure at Third and Walnut. The First Bank donation is the largest Siegel has made in Philadelphia, though he made a larger gift to build a faculty room at the University of Chicago.
Siegel noted the carving high over the door of the First Bank. One of the first targets for renovation, the carving is the first known use of the eagle as a national symbol on a U.S. public building. He noted historians don’t have good images of the original interior. But Girard and his successors did a “gorgeous” redesign, which when restored can serve as a proper museum for Philadelphia’s role in American enterprise, and as an attractive “event space,” he said. “We can make Philadelphia the center of U.S. financial history.”