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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, the so-called National Bank Notes. 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 taxing state bank issued currency 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.
The first bank to receive a national charter as a result of the act was the Pittsburgh Trust and Savings Company, which promptly renamed itself the First National Bank of Pittsburgh. That bank is still in existence today as PNC Bank.
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.
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