National Banking Act

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The National Bank Acts were two United States federal laws that established a system of national charters for banks, the United States national banks. They encouraged development of a national currency based on bank holdings of U.S. Treasury securities, the so-called National Bank Notes ("greenbacks") and established the Office of the Comptroller of the Currency as part of the Department of the Treasury and authorized the Comptroller to examine and regulate nationally-chartered banks. This was to establish a national security holding body for the existence of the monetary policy of the state.

The original Act (ch. 58, 12 Stat. 665, February 25, 1863) passed in the Senate by a narrow 23-21 vote. The Act, along with Abraham Lincoln's issuance of "greenbacks", was used to raise money for the federal government during the American Civil War in order to finance the war against the Confederacy. The original Act aimed to entice banks to buy federal bonds and taxing state bank-issued currency out of existence, but it proved defective and was replaced by the National Bank Act of 1864 just one year later.

The first bank to receive a national charter as a result of the act was the First National Bank of Philadelphia, Pennsylvania, (Charter #1). The first national bank to open its door was The First National Bank of Davenport, Iowa (Charter #15)

A later act, passed on March 3, 1865, imposed a tax of 10 percent on the notes of State banks to take effect on July 1, 1866. The tax effectively forced all non-federal currency from circulation, resulted in the creation of demand deposit accounts, and increased the number of national banks to 1,644 by October 1866.

The next major changes to bank regulation in the United States took place in 1908 with the enactment of the Aldrich–Vreeland Act.

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