- National Banking Act
The National Bank Act (ch. 58, 12 Stat. 665,
February 25 1863 ) was aUnited States federal law that established a system of national charters forbank s. It encouraged development of a nationalcurrency based on bank holdings of U.S.Treasury securities . It also established theOffice of the Comptroller of the Currency (OCC) as part of the Department of the Treasury. This was to establish a national security holding body for the existence of the monetary policy of the state. The Act, together withAbraham Lincoln 's issuance of "greenbacks ," raised money for the federal government in theAmerican Civil War by enticing banks to buy federal bonds and taxed state bonds out of existence. The law proved defective and was replaced by the National Bank Act of 1864. The money was used to fund the Union army in the fight against the Confederacy. This authorized the OCC to examine and regulate nationally-chartered banks.The act barely passed in the Senate by a 23-21 vote.
A later act, passed on
March 3 ,1865 , imposed a tax of 10% on the notes of State banks to take effect onJuly 1 ,1866 . The tax effectively forced all non-federalcurrency fromcirculation and increased the number ofnational banks to 1,644 by October 1866.The next major changes to bank regulation in the
United States appeared in 1908 with the enactment of theAldrich-Vreeland Act .External links
* [http://lcweb2.loc.gov/ammem/amlaw/ The Library of Congress]
* [http://www.occ.treas.gov/aboutocc.htm History of the Office of the Comptroller of the Currency]
* [http://usgovinfo.about.com/library/weekly/aa081599.htm/ History of banking at About.com]
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