National Banking Act

(noun)

The National Banking Acts of 1863 and 1864 were two U.S. federal banking acts that created the U.S. National Banking System.

Related Terms

Examples of National Banking Act in the following topics:

  • Government During the War

    • Republicans in Union Congress enacted national reforms.
    • With the establishment of the Confederacy, Republicans in Congress enacted sweeping federal changes, including implementation of the Morrill Tariff and passage of the Homestead Act, Pacific Railroad Act, and National Banking Act.
    • The latter established a system of national banks in 1863, and promoted development of a national currency backed by bank holdings of U.S.
    • The 1862 Homestead Act opened up public-domain lands for family farms at no cost.
    • This act was unpopular among Southern slaveholders, who wanted to see more land dedicated to plantations.

  • The First National Bank

    • Against opposition, the First National Bank was established to improve the nation's credit under the newly enacted Constitution.
    • Hamilton's proposed national bank would function purely as a depository for federal funds, rather than a lending bank.
    • After reading Hamilton's defense of the National Bank Act, Washington signed the bill into law.
    • The First Bank building is now a National Historic Landmark located in Philadelphia, Pennsylvania within Independence National Historical Park.
    • Analyze the debate surrounding the charter of the First National Bank

  • Hamilton's Economic Policy

    • In Hamilton's "Second Report on the Public Credit," submitted to Congress in 1790, he recommended the chartering of a national bank, modeled on the Bank of England.
    • Hamilton's proposed national bank would function purely as a depository for federal funds, rather than as a lending bank.
    • Unlike the Bank of England, the National Bank would be a business on behalf of the federal government that would serve as a depository for collected taxes, making short-term loans to the government to cover real or potential temporary income gaps and serving as a holding site for both incoming and outgoing monies.
    • There was a heated debate between Democratic-Republicans and Federalists over the constitutionality of a National Bank.
    • After reading Hamilton's defense of the National Bank Act, Washington signed the bill into law.

  • Banking and Finance Reform

    • The banking holiday thus closed the nation's banks (until new legislation was passed) without prompting panic.
    • On March 9, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's top advisors.
    • The act was passed and signed into law the same day.
    • The Emergency Banking Act, also known as the Glass–Steagall Act, also limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations.
    • Several provisions of the act sought to restrict "speculative" uses of bank credit.

  • The Bank War and Economic Boom

    • In the presidential campaign of 1832, the Bank of the United States was the issue dividing Jacksonian Democrats from National Republicans.
    • Anti-BUS Jacksonian Democrats opposed the national bank's reauthorization on the grounds that the institution conferred economic privileges on financial elites, violating republican principles of social equality.
    • With the Bank charter due to expire in 1836, the president of the Bank, Nicholas Biddle, in alliance with the National Republicans under Senators Henry Clay (KY) and Daniel Webster (MA), decided to make rechartering a referendum on the legitimacy of the institution in the general election of 1832.
    • In the presidential campaign of 1832, the BUS served as the central issue in mobilizing the opposing Jacksonian Democrats and National Republicans.
    • Despite the Senate's refusal to confirm Taney's appointment, during his nine months as acting Secretary, he carried out Jackson's orders.

  • Strengthening the Monetary System

    • This national bank holiday, with banks closed and Americans having no access to their deposits, gave Congress enough time to propose banking reform legislation.
    • On March 9, 1933, the Emergency Banking Act was introduced to and passed by Congress.
    • In June of the same year, more long-term solutions were presented in the Banking Act of 1933 (also known as the Glass-Steagall Act although this term is not precise and usually refers to the provisions of the Banking Act of 1933 that dealt with commercial bank).
    • The most important provisions introduced by the 1933 Banking Act were:
    • Some of the provisions of the 1933 Banking Act are still in effect.

  • The Panic of 1819

    • The new nation had previously faced an economic depression following the War of Independence in the late 1780s and 1790s, but nothing as severe.
    • In an effort to bring stability to the nation’s banking system, Congress chartered the Second Bank of the United States (a revival of Alexander Hamilton’s national bank) in 1816.
    • In an effort to stimulate the economy in the midst of the economic depression, Congress passed several acts modifying land sales.
    • The Relief Act of 1821 allowed people from Ohio to return land to the government if they could not afford to keep it.
    • The act also extended the credit period to eight years.

  • Wilsonian Progressivism

    • Included among these were the Federal Reserve Act, Federal Trade Commission Act, the Clayton Antitrust Act, and the Federal Farm Loan Act.
    • It was also aided through the passage of the Federal Farm Loan Act, (1916), which set up Farm Loan Banks to support farmers.
    • In contrast to the Republicans, the liberal Democrats opposed all banking schemes and strenuously denounced private banks and Wall Street.
    • The decision to create twelve regional banks was meant to weaken the influence of the powerful New York banks, a key demand of Bryan's allies in the South and West.
    • The reform agenda of Wilson's "New Freedom," however, did not extend as far as Theodore Roosevelt's proposed New Nationalism in relation to the latter's calls for a standard 40-hour work week, minimum wage laws, and a federal system of social insurance.

  • Launching the New Deal

    • Only 36 hours after taking the presidential oath, Roosevelt closed all the banks (the so-called Bank Holiday).
    • The Emergency Banking Act followed the Proclamation and enabled the government to close weak banks and reopen more stable banks.
    • The initiative helped to rebuild trust in the U.S. banking system.
    • The National Labor Relations Act (1933; known also as the Wagner Act), which established the National Labor Relations Board (1935).
    • The Fair Labor Standards Act (1938) was the first federal law that included a national minimum wage and the forty-hour week as the standard work week.

  • The Second Bank of the United States

    • One of the policies of the American System was to create financial infrastructure in the form of a government sponsored National Bank to issue currency and encourage commerce.
    • The debt of the nation led to an increase in banknotes among private banks, and as a result, inflation increased greatly.
    • In the summer of 1818, the national bank managers realized the bank's massive overextension and instituted a policy of contraction and the calling in of loans.
    • The Whigs and anti-Jackson National Republicans hoped they would gain enough seats in Congress during the election of 1836 to override a second Jackson veto, thereby extending the Bank's charter.
    • The south facade of the building that housed the Second Bank of the United States is located at 4th and Chestnut Streets in Independence National Historical Park, Philadelphia, Pennsylvania.