In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation. Quantitative evidence shows that by 1900,

Question

In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation.  Quantitative evidence shows that by 1900,

Quizplus · Accepted Answer

The tax on state bank notes led banks to innovate rather than disappear; they shifted from issuing their own notes to focusing on deposits and lending, which resulted in a dramatic increase in the number of state banks by 1900.

In 1865, Congress Raised the Tax on State Bank Notes