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Lincoln and the Founding of the National Banking System
Lincoln's Financial Frontier
Abraham Lincoln understood the importance of a common national currency and bank credit to support a healthy economy. As a young man in frontier Indiana and Kentucky, he saw the ways in which unreliable paper money and inadequate credit frustrated the ambitions of his neighbors. These experiences shaped his political outlook.
Financing the Civil War
To meet the government's financial needs during the Civil War, President Lincoln and Treasury Secretary Salmon P. Chase borrowed from foreign governments and American citizens, instituted the country's first general income tax, and printed paper money - so-called "Greenbacks."
National Banks and America's Future
To promote opportunity, a dynamic economy, and a stronger Union, Lincoln and Chase conceived the national banking system and the Office of the Comptroller of the Currency to regulate and supervise it. Lincoln took pride in signing the National Currency Act, which he believed would provide "great benefit" to the people and the government.
"The national system," he declared in this State of the Union message of 1864, "will create a reliable and permanent influence in support of the national credit and protect the people against losses in the use of paper money."
OCC's Information Flyer on Lincoln and the Founding of the National Banking System