THE ORIGINS OF BANKING IN FREDERICK AND ITS DEVELOPMENT UNDER THE STATE BANKING SYSTEM IN MARYLAND 1745-1863

Abstract

This paper covers the period of the founding of Frederick, the growth of Frederick to realize the need for a banking facility, and the development of its banks through the period of state banking which ended with the enactment of the National Banking Act in 1863. During the period of state banking, the State Legislature chartered the various banking institutions and also regulated their activities. Except for the two Banks of the United States (1791-1811, 1816-1836), the Federal Government exercised no regulatory or chartering powers. With the enactment of the National Banking Act, many banks changed their charters to become national banks, and the Federal Government governed the issuance of bank notes, and thus, the supply of the currency. It is the intent of this study to demonstrate that the banks of Frederick were subject to the same economic influences as the national economy. These influences were such things as the various monetary panics and crises caused by the wax and wane of the two Banks of the United States; the various problems associated with the currency, i.e., banks notes and specie; and the various speculative influences such as the public improvement projects.