ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -On February 25, 1863, President Lincoln signed The National Currency Act into law. The Act established the Office of the Comptroller of the Currency (OCC), charged with responsibility for organizing and administering a system of nationally chartered banks and a uniform national currency.

Detailed explanation-2: -As amended in 1864, the Bank Act established the Office of Comptroller of the Currency, and permitted banks to obtain federal charters and issue national bank notes up to 90 percent of their holdings of United States bonds.

Detailed explanation-3: -In order to assist with the war debt, national banks had to purchase government bonds as security, and then they could start issuing their own loans and notes. The act also standardized the printing and issuing of American currency; the U.S. dollar became the accepted national currency.

Detailed explanation-4: -The Act had three primary purposes: (1) create a system of national banks, (2) to create a uniform national currency, and (3) to create an active secondary market for Treasury securities to help finance the Civil War (for the Union’s side).