History
The country's money and credit problems intensified after the Civil War. In 1863,
President Abraham Lincoln, urged by Salmon Chase, the Secretary of the Treasury,
signed the National Bank Act to help solve the nation's money problems. The Act
established a national banking system and a uniform national currency to be issued
by new "national" banks. The banks were required to purchase U.S. government securities
as backing for their National Bank notes. In 1865, a 10-percent tax levied against
State Bank notes essentially taxed those notes out of existence.
From 1863 to 1877, National Bank notes were issued privately by the national
banks. After 1877, the Bureau of Engraving and Printing, a division of
the U.S. Department of the Treasury, assumed responsibility for printing
all notes.
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