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  • 1816: Banks for Everyone
    The first mutually owned savings banks in the United States—the Philadelphia Savings Fund Society and Boston’s Provident Institution for Savings—are chartered. Similar institutions follow in New York, Baltimore, Providence, R.I., and Hartford, Conn. With philanthropists contributing the initial capital, the banks served depositors of modest means, providing the most secure savings outlet available.
  • 1817: The Second Time Around
    After three years of financial upheaval, Congress charters the Second Bank of the United States to support weaker state banks. Its 18 branches, especially those on the southern and western frontiers, support American expansion by overissuing banknotes beyond their specie reserves.
  • 1818: Informal Innovation
    Boston’s Suffolk Bank is founded and serves as an early clearinghouse and de facto central bank for New England. Country banks outside of Boston could apply to be members, maintain a minimum deposit of specie at Suffolk and then have their notes redeemed at face value by Suffolk. The informal system, which persisted until 1858, limited bank failures among participating banks.
  • 1819: Reining in the Second Bank
    The Second Bank of the United States seeks to curtail its inflationary activity, which, combined with a collapse in U.S. agricultural prices, triggers America’s first peacetime financial panic. Specie payments are suspended.
  • 1829: Pioneering Deposit Insurance
    The New York Safety Fund is founded as one of the first state-based deposit insurance schemes. The voluntary fund will be overcome by losses in the Panic of 1837 and close its doors for good in the 1860s.
  • 1831: America’s First Thrift
    America’s first building and loan—the Oxford Provident Building Association—opens in Frankford, Pa., to make home loans more accessible.
  • 1833: The Return of Free Banking
    Having pledged to abolish the Second Bank of the United States, President Andrew Jackson removes U.S. Treasury deposits from the Bank and places them in dozens of state banks across the country. Jackson vetoes a re-charter bill, and the Bank converts to a private corporation in 1836. With the lapsing of the Second Bank’s charter, the era of “free banking” begins, with only state-chartered banks in existence.
  • 1837: Panic and Recession
    The Panic of 1837 begins when banks in New York suspend specie payments, triggering a seven-year recession and the failure of 40 percent of America’s banks.
  • 1838: Uncharted Territory
    New York authorizes a different form of “free banking”—instead of requiring a legislative charter to open a bank, anyone who meets certain conditions may obtain a charter.
  • 1841: Opening the Doors
    The Second Oxford Provident, Frankford, Pa., becomes the first building and loan association to admit women as members.
  • 1842: Better Information on Bank Notes
    The first issue of Thompson’s Bank Note Reporter published. The newspaper evaluates good and bad banks and the notes they issue in order to better inform the public. The Reporter is the oldest ancestor of today’s trade paper American Banker. In the free banking era, similar publications become essential to determining the value of banknotes and whether they would be honored.

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