The increase in tax on state bank notes from 2 to 10 percent provided state banks incentive to

Question

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The increase in tax on state bank notes made it more expensive for banks to issue these notes, incentivizing them to find alternative ways to facilitate transactions and extend credit. Attracting more demand deposits and increasing the use of checks became a more cost-effective strategy for banks, as it allowed them to continue operating without the additional costs associated with the higher tax on bank notes.

The Increase in Tax on State Bank Notes from 2