The National Banking Act

The National Banking Act or the National Banking System is considered a financial landmark of the War. Congress passeed the National Banking Act in 1863. It was launched as a stimulant to the sale of government bonds and also designed to establish a standard bank-note currency. The country was then flooded with depreciated "rag money" issued by unreliable bankers. The national banking system consisted of a bank buying government bonds and issuing paper money backed by the bonds. It was also the first significant step toward a unified banking network since Andrew Jackson's "monster" Bank of the United States in 1836. The National Banking Act (system) continued for fifty years until it was replaced by the Federal Reserve System.