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Robert V. Garrett Presents: An Overview of Early Banking in the United States

July 19, 2012

When banks began appearing in the United States (as early as 1791), most operators needed permission from a state government to open a bank. Because banking was a new field, early lenders who opened banks in cities displayed caution when loaning money to others, typically dealing only in short-term loans – 30 to 60 days. In newer, less populated regions, bankers relaxed these rules, often loaning money to farmers so they could buy land and equipment to work that land.

As banks grew, they offered more services to customers, such as mortgages, special financing options, and loans designed to appeal to specific clients, like college students. These interests represent the bank’s primary purpose, one that has not changed even as the years have passed: to give people a place to store their excess funds, and to use those funds to help citizens acquire automobiles and homes, start businesses, and enroll in college, among other purposes.

About the Author: Robert V. Garrett served Banc One and JP Morgan Chase beginning in 1993, eventually ascending to the position of Executive Vice President – Regional Investment Manager.


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