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What were wildcat banks?

Wildcat banks were state-licensed financial institutions that operated in the United States during the early 1800s prior to the Civil War (1861–65). Each bank issued its own paper money, which could be exchanged for gold or silver coin. But because the banks loaned money too freely, they issued more paper currency than they could back with coin. Counterfeit (fake) bills were also a problem. No one could tell the difference between actual bank currency and the product of a skilled counterfeiter. In 1836 U.S. President Andrew Jackson (1767–1845) required that people pay for land with coin. Many wildcat banks, particularly in the western United States, went bankrupt when customers tried to exchange the paper money for coin.

Further Information: Museum of American Financial History. [Online] Available

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