jan 1, 1863 - The National Bank Act was Passed

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During the Civil War the National Bank Act of 1863 was passed.This created national banks, which issued circulating notes that had to be backed by U.S. government securities. An amendment to the Act required taxation on state bank notes but not on national bank notes, effectively creating a uniform national currency. Despite taxation on their notes, state banks continued to flourish because of the growing popularity of demand deposits, which had taken hold during the Free Banking Era.

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