National Bank Notes
The National Bank Act of 1863 (amended in 1864) was a congressional act that authorized the issuance of bank notes by national banks. Each national bank was required to deposit with the Treasury U.S. bonds in the amount of at least one-third of its capital stock. Circulating notes, guaranteed by the government, might be issued up to 90 percent of the par value of deposited bonds. Passed by northern Republicans in the absence of southern legislators, the National Bank Act raised much-needed cash for the war effort. It was also a substantial step toward a national banking system. The notes issued under it constituted the sole bank-note currency of the United States until 1914 and remained in circulation until 1935.
Bibliography
Hammond, Bray. Sovereignty and an Empty Purse: Banks and Politics in the Civil War. Princeton, N.J.: Princeton University Press, 1970.
