National Banking Act

The National Banking Act, enacted in 1863, established a system of national banks in the United States to create a stable banking environment and a uniform national currency. It allowed banks to issue national banknotes backed by U.S. government bonds, strengthening federal control over the banking system. This act aimed to reduce reliance on state-chartered banks, promote financial stability, and facilitate easier interstate banking. It also introduced federal regulation of banks, setting standards for capital and reserves, thereby ensuring greater public confidence in the banking system. Overall, it laid the groundwork for modern U.S. banking.