Respuesta :
The effects of the lack of a banking system in early america were -
- local governments often would issue currency
- land banks were created
- barter system was commonplace
What was the main problem affecting the early banking system of the US?
Without a central bank to oversee banking finances, the extensive banking system of the 1830s, 1800s, and 1850s ran into major problems, even as it provided the nation with ample loans to finance economic growth. One of the problems is financial instability. Banking crises occurred in 1837, 1839-1842, and 1857, when many banks had to suspend the convertibility of their banknotes and coin deposits because their coin reserves were insufficient. Many of these banks failed or became insolvent when borrowers defaulted. Banking crises led to economic downturns accompanied by high unemployment.
Another problem is chaotic currency. At that time, the government only provided coins. Banknotes - paper money - are issued by most banks. In 1860, there were 1,500–1,600 such banks, most of which issued multiple denominations of banknotes. As a result, throughout the United States, there were about eight to nine thousand different-looking pieces of paper in circulation, each bearing the name of a bank and a number of dollars that the bank promised to pay in coins if the note that is presented to him.
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