Abstract: The Origins of the U.S. Unit Banking System: A New Look at the Restrictions Imposed on Antebellum Branch Banking

Scott Redenius


Unit banking was the norm in the United States until well into the twentieth century. Even in the antebellum period, before federal restrictions limited branching, there was little interest in branching, at least in the Northeast, and operating branch bank networks posed serious challenges. The antebellum branch banking networks formed in a number of Western and Southern states during the antebellum period appear to be an important exception. This paper examines branch bank charters in order to address the following questions: What did it mean for a bank to have a "branch" under these systems? Why were these banks organized as branch banks? And what role did the state play in determining their structure? The banks in the West and some of the Border States had hybrid structures that combined features of unit and branch banking. One factor in the use of this organizational form appears to have been a desire to expand access to credit facilities.