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Second Bank Of America Essay

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The banking industry was first established in 1781 with the Bank of North America in Philadelphia. Robert Morris was the first Superintendent of Finance and proposed that the Bank of North America would act as the sole fiscal and monetary agent for the government. Congress in 1791, chartered the First Bank of the United States to succeed the Bank of North America but failed to renew the charter for the Bank of the United States in 1811 when it expired. The Second Bank of the United States was opened in 1817 mainly due to inflation after the War of 1812 and had a term of 20 years, however, some political figures did not want to extend the charter due to the belief that gold was the only true form of money. In September 1933, President Andrew Jackson ended the charter for the Second Bank of the United States. …show more content…
During this time, banks were not subject to any special regulations which resulted in the number of banks growing from 25 in 1800 to over 1300 by 1860. The result of this nonregulated banking explosion was the use of fraudulent activity by the banks toward the public. Due to this activity, the National Bank Act of 1863 and 1864 was passed which provided for a system of banks to be chartered by the federal government.
The way in which banks have functioned over that time period to the present, has been determined by events that have occurred in the financial arena. In the late nineteenth century, the U.S. Treasury was unwilling to issue additional bank notes to some eastern national banks. As a result, some states resorted to allowing local banks to print their own currency and in the 1890’s, when depositors attempted to withdraw funds, they were informed that their money was not on hand and not available. This later led to the passage of the Federal Reserve Act in 1913 which created the Federal Reserve Bank

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