Early: Merchants would allow customers to
deposit money in their store, they would keep money safe for a small fee, charge fee for a load
Post Revolution: People needed a safe system; there
was a controversy between Federalists and Anti-Federalists over a national bank, the National Bank won out
1791: The Bank of the United States was established
with a 20-year charter; the bank would hold money taken in taxes, and issue money that was representative in notes and was
backed by gold and silver; it would also ensure that state banks had gold and silver to back up their money; the charter ran
out in 1811
1811: States chartered their own banks that
issued notes that were not backed by specie (gold and silver), which cause a lot of chaos, different currencies, and prices
went up
1816: The 2nd Bank of United States
was created with a 20-year charter; Biddle was calling in notes and banks were failing; the charter was not renewed in 1832
1837-1863
(Wildcat Era): From
1830-1837 state banks tripled; the banks ran when people panic and want their gold; wildcat banks started on the edge of development;
fraud and many currencies
1860: 8000 banks were circulating currency;
the federal government did not make paper money
Civil War: First paper currency from US Treasury,
called greenbacks because of green ink; South tried to back Confederate currency with cotton and it became worthless
1863-1864: National Banking Acts- Federal government
could charter banks, required banks to hold gold and silver and issue single national currency
1870’s:
Gold Standard; paper
money and coins + gold; to issue currency had to have gold to back it
1907: Panic; led to a plan to reinstate a central bank and to the
Federal Reserve
