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Historical Timeline


The Mid-1800s
  • European banks finance 30,000 miles of railway tracks in the U.S.—a new phase in high finance with the potential for large returns. Railroads become the driving force of the economy.

    The railroads open up the West and provide demand for the new steel industry, which makes new commerce and new industries possible. New cities emerge along the railways, and commerce organizes around these cities. Speculators seek capital for their new ventures.

    By 1914, there are 253,000 miles of railroad in the U.S.

  • Prior to the Civil War, the U.S. has a loose system of finance and banking. As the nation grows, it demands a more mature financial system. The National Banking Acts of 1863, 1864, and 1865 are a significant movement in that direction.

    With the demise of the Second Bank of the United States in 1837, only state-chartered banks exist. During this period, known as the Free Banking Era, state chartering standards often are not very stringent, and many new banks are formed. Large numbers of them will fail. The era ends with the passage of the National Currency Act in 1863.

The Panic of The Panic of 1857
The economy is weak because of overbuilding of railroads and overextension by banks to finance construction. Several hundred banks fail. Most banks suspend specie payments, such as gold coins. Unemployment increases.

Oil is discovered in Titusville, Pennsylvania.


There are 1,562 state banks.


7,000 different bank notes are in circulation; 5,500 fraudulent bank notes are in circulation.


The Civil War destroys the South's economy; the North's economy flourishes.

President Abraham Lincoln composes the final Emancipation Proclamation on January 1, 1863. Civil War

National Currency Act of 1863

(Became known as the National Banking Act in 1864)
This act:

  • Establishes a national currency: the dollar.

  • Establishes national banks, which creates the dual banking system with national and state chartered banks—the only such system in the world.

National Banking Act of 1864

This act:

  • Establishes the Office of the Comptroller of the Currency (OCC)
  • Initiates a system of bank examinations.

National Banking Act of 1865

This act, intent on getting rid of bank notes, levies a tax on state currency. The tax goes from 2 percent to 10 percent, resulting in the use of checks.


There are 349 state banks. There are 1,294 national banks.


The Golden Spike connects the Central Pacific and Union Pacific railroads, commemorating the completion of the first transcontinental railroad in the world.

The Panic of 1873

During and immediately after the Civil War, the U.S. economy booms. This boom is accompanied by reckless financial expansion and speculation. Between 1867 and 1873, more than 30,000 miles of new railroads are constructed at an enormous capital cost.

When a large financier of railroads goes into bankruptcy, a financial panic occurs in the Northeast. Banks, brokerages, and businesses fail, stock prices collapse, consumer prices decline, and unemployment increases. Economic instability lasts for more than 20 years.

  • Entrepreneurs begin to turn to local banks and wealthy individuals for venture capital through New York City banks.
  • John D. Rockefeller, William Rockefeller, and partners create Standard Oil, the largest oil refining business in the world.
  • Standard Oil is the first great American trust. The founding partners borrow much of their capital from the large New York bankers. Exxon Mobil is the largest of Standard Oil's descendants.

The Chase National Bank is chartered.


There are 1,015 state banks and 2,689 national banks.United States Congress seal

The Panic of 1893

During the late 1880s and early 1890s, severe weaknesses begin to appear in the economy, especially in the overbuilt, debt-ridden railroad industry, which has become the major sector of the U.S. economy. A railroad declares bankruptcy, and a panic sweeps through the securities markets. Railroad expansion halts.

The Panic triggers the collapse of railroad stock. The railways shift from thousands of small investors to two money trusts.

The economy slows, manufacturing and agricultural sectors operate at a fraction of capacity, and foreign investment declines.

The result: banking panic. For the first time, bank runs occur outside of New York City, in Kansas City, Louisville, Milwaukee, Denver, and Portland.


Starting in 1886 and continuing until 1933, Congress considers 150 proposals to create deposit insurance plans.

The Late 1800s

Standard Oil becomes financially self-sufficient. It has more cash than any corporation in history and no longer needs Wall Street. The Standard Oil Trust has become a huge bank within an industry. It finances itself against competition and provides venture capital to other entrepreneurs on high-class collateral. The Standard Oil Trust "bank" becomes a natural, spontaneous offshoot of successful commerce.

U.S. railroads desperately need capital, and British investors respond, lending massive amounts of money.

President William McKinley launches the trust-busting era. He appoints several senators to the U.S. Industrial Commission. The Commission's report lays the groundwork for President Theodore Roosevelt's later attacks on the trusts' industrial titans.

Standard Oil building

Industry generates surplus capital. New York banks emerge from foreign dependence on capital. New York City emerges as an international banking center.

Financial panics and bank runs are common. The U.S. economy does not have stabilizers to provide liquidity, such as a central bank and deposit insurance.


There are 2,250 state banks and 3,484 national banks.

U.S. Presidents
during the 1800's

Andrew Jackson  Andrew Jackson (1829-1837)
Abraham Lincoln  Abraham Lincoln (1861-1865)
Ulysses S. Grant  Ulysses S. Grant (1869-1877)
William McKinley  William McKinley (1897-1901)
There are 3,733 state banks and 3,759 national banks.

Deposits for First National City Bank (Citibank) reach $31 million—a 158 percent increase from $12 million in 1893.

  • The Dow Jones Industrial Average becomes a universal yardstick by which investors judge the stock market's performance.
  • 11,500 commercial banks operate in the U.S.

Spanish-American War
The Spanish-American War begins. The U.S. gains control of the former colonies of Spain in the Caribbean and Pacific. Much of the Caribbean's economy is already in U.S. hands, and most of its trade is with the U.S.

The war increases the business and earnings of American railroads, increases the output of American factories, and stimulates industry and commerce.