Question

Who issued paper currency in the United States during the first half of the 19th century?

Question 18 options:

local banks


state banks


The Federal Reserve


The National Bank

Answer 1

State banks

Step-by-step explanation:

The Massachusetts Bay Colony was the first to start creating paper money in the US. This began on February 3, 1690, when the necessity to pay for military action arose during King William's War against Canada. This first kind of paper money was called a bill of credit.

During the first half of the 19th century, state banks were the ones that issued paper currency in the US. This was the case until the National Banking Acts of 1863 and 1864, the purpose of which was to create a national banking system and establish a national currency. National banks were almost the same as state banks, except national banks received their charter from the federal government and not a state government as state banks did.