ABSTRACT
This chapter examines the antebellum period. The United States (US) financial system from the end of the eighteenth to the beginning of the twentieth century was in a continuous state of flux, with periodic crises followed by deep recessions and even depressions. The post-Revolutionary War US financial system was primitive and fragmented. Secretary of State Thomas Jefferson was deeply suspicious of large banks and bankers, as such institutions would centralize economic as well as political power and undermine democracy. Banks located in the emerging financial centers, such as New York City (NYC), resented the privileged relationship of the second Bank of the US with the government. The government actively promoted construction of new railroads by granting public lands to railroad companies. The declining political power of the North and rising conflict between the abolitionists and pro-slavery forces in the Western territories reduced frontier settlement and diminished railway-passenger traffic.
