The National Banking Act of 1864 establishes…

The National Banking Act of 1864 establishes federally issued bank charters, which take banking out of the hands of state governments.

It supersedes the National Banking Act of 1864 (ch. 106, 13 Stat. 99; June 3, 1864)  passed just one year earlier.

Prior to the Act, charters had been granted by state legislatures who were under an immense amount of political pressure and could be influenced by bribes.

This problem had been resolved to some degree by free banking laws in some states but it is not until this Act is passed that free banking is established on a uniform, national level and charter issuance is taken out of the hands of discriminating and corrupt state legislatures.

The first bank to receive a national charter is the First National Bank of Philadelphia, Pennsylvania (Charter #1).

The first new national bank to open is The First National Bank of Davenport, Iowa (Charter #15).

Additionally, the new Act converts more than fifteen hundred state banks to national banks.

The National Banking acts serve to create the (federal-state) dual structure that is now a defining characteristic of the U.S. banking system and economy.