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State Banks and the National Banking Acts: Measuring the Response to Increased Financial Regulation, 1860–1870
Author(s) -
JAREMSKI MATTHEW
Publication year - 2013
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12006
Subject(s) - legislation , charter , state (computer science) , national bank , business , capital (architecture) , financial system , finance , economics , political science , law , archaeology , algorithm , computer science , history
The National Banking Acts and their supporting legislation led to 263 state bank closures and 934 charter conversions between 1863 and 1870. This paper measures and analyzes these sudden changes using the period's first complete bank‐level census. The data suggest that the national capital requirements prevented many existing banks from converting to a national charter, whereas a tax on state bank notes was responsible for the large number of closures. The legislation also prevented new national banks from replacing closed state banks and, instead, encouraged note and security brokers to open new banks in developing areas along the Manufacturing Belt.