3 Prior to 1837, the principal types of banks found in
1J. V. Fenstermaker, The Development of American Commercial Banking (Kent, Ohio: Kent State University, 1965), 4.
the country were (1) unincorporated banks, (2) private incorporated banks, (3) real estate banks, and (4) state owned banks. Prior to 1820, the most prevalent of these types was the unincorporated bank.
All banks, including the unincorporated banks were permitted to issue notes, or money. Few states controlled the issue of money by private banks, and those which did exercised only limited control. One result was the issuance of notes by many banks in amounts far in excess of that warranted by their monetary reserves.4 In turn, these actions led to (1) differences in values attached to the notes of different banks, (2) fluctuating values for the notes of individual banks, and (3) periodic monetary disruptions (sometimes panics) i
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