National Banks and Currency in the Intermountain West

National banks are little-known organizations that significantly contributed to the development of the United States, including the Intermountain West. National banks are specific financial establishments created during the American Civil War. Before this period, the United States lacked a centralized financial institution. State and private banks controlled financial enterprises with little regulation, commonly called “Wildcat Banking.” This situation allowed banks to print paper money with falsified financial backing, meaning the currency was often irredeemable in gold or silver, and any collateral for such paper money faced embezzlement without redress. These institutions would close soon after their creation, as no federal oversight existed.

This problem, along with the need to fund the Civil War, materialized in the National Bank Acts of 1863 and 1864. These laws established a centralized currency for the United States, plus a system of chartered institutions called “national banks,” subject to federal regulation. These organizations act as commercial banks, issuing loans and advertising checking/savings accounts. National banks could also issue currency under their name, determined through the dollar amount of bonds they deposited with the U.S. Treasury, specifically ninety percent. These notes, named “National Bank Notes,” to distinguish them from federal currency, received different Treasury designs but were used the same as any other money.

National Bank Notes faced elimination after the Banking Act of 1935, as the Roosevelt administration centralized government finances entirely into the Federal Reserve System. These notes’ removal from consumption allowed the Treasury to retire the bonds required for their circulation, creating an accounting windfall of several hundred million dollars. This alteration also meant only Federal Reserve Notes, Silver Certificates, which were redeemable for silver coin, and Legal Tender Notes, a form of fiat currency predating Federal Reserve Notes, continued in general circulation, the latter two being retired in 1964 and 1994, respectively. From 1863-1935, almost 15,000 national banks issued national currency.

Intermountain national banks, often headed by local farmers, ranchers, financiers, and industrialists, provided greater fiscal security to themselves and their patrons, while stimulating their economies through loan assistance and currency circulation. Hundreds of national banks dotted the Intermountain West during the late nineteenth and early twentieth centuries, with over fifty opened in Wyoming alone. Some of the largest national banks in the region included the First National Bank of Denver, Deseret National Bank of Salt Lake City, Missoula National Bank, First National Bank of Idaho in Boise, and the Farmers and Merchants’ National Bank of Reno, Nevada.

National banks, previously so common, are often unknown to the public because of how few exist today or because name changes removed “national” from their corporate title. Additionally, many bank buildings housing these institutions have been torn down, re-purposed, or redesigned, obscuring their original purpose across the United States. Therefore, those bank buildings that do survive are rare to encounter and historically significant for their financial history and architectural styles, being of unique, local significance.