Antebellum Banking: 1781–1863

The economy, as a whole, experienced healthy growth as well as substantial structural change between 1781 and the onset of the Civil War. In general terms, real gross national product (RGNP) grew at rather fecund levels throughout this period thereby continuing a trend started in the earliest colonial times (Figure A.1).1 Foreign trade drove most of the growth prior to the early nineteenth century though the Embargo of 1807 ended, temporarily, most exporting. Between 1807 and 1837, production shifted away from home and small shops filled with skilled artisans in favor of the factory which certainly altered the nature of work and life for many Americans (Figure A.2). After 1837 and prior to the Civil War, the U.S. economy experienced even more robust RGNP growth and further structural change. Indeed, RGNP growth averaged approximately five percent during this period and per capital RGNP grew, on average, at a rate of 1.8 percent.2 Industrial and commercial growth comprised much of this expanded production. As evidence, consider that in 1839, 37 percent of RGNP production was in industry, trade, or transportation but 20 years later 46 percent of all production fell under the industry classification.3 Much of this economic growth may be traced to a time of intense entrepreneurial spirit. While most people worked the land, there was an increasing need and interest in improving the production process and its output.