The National Bank Act
(ch. 58, 12 Stat. 665, February 25 1863
) was a United States federal law
that established a system of national charters for banks
. It encouraged development of a national currency
based on bank holdings of U.S. Treasury securities
. It also established the Office of the Comptroller of the Currency
(OCC) as part of the Department of the Treasury
. This was to establish a national security holding body for the existence of the monetary policy of the state. The Act, together with Abraham Lincoln
's issuance of "greenbacks
," raised money for the federal government in the American Civil War
by enticing banks to buy federal bonds
and taxed state bonds out of existence. The law proved defective and was replaced by the National Bank Act
of 1864. The money was used to fund the Union army in the fight against the Confederacy. This authorized the OCC to examine and regulate nationally-chartered banks.
The act barely passed in the Senate by a 23-21 vote.
A later act, passed on March 3, 1865, imposed a tax of 10% on the notes of State banks to take effect on July 1, 1866. The tax effectively forced all non-federal currency from circulation and increased the number of national banks to 1,644 by October 1866.
The next major changes to bank regulation in the United States appeared in 1908 with the enactment of the Aldrich-Vreeland Act.