| Line | Historians remain divided over the role of |
| banks in facilitating economic growth in the | |
| United States in the late eighteenth and early | |
| nineteenth centuries. Some scholars contend | |
| (5) | that banks played a minor role in the nations |
| growing economy. Financial institutions, they | |
| argue, appeared only after the economy had | |
| begun to develop, and once organized, followed | |
| conservative lending practices, providing aid to | |
| (10) | established commercial enterprises but |
| shunning those, such as manufacturing and | |
| transportation projects, that were more | |
| uncertain and capital-intensive (i.e., requiring | |
| greater expenditures in the form of capital than in | |
| (15) | labor). |
| A growing number of historians argue, in | |
| contrast, that banks were crucial in transforming | |
| the early national economy. When state | |
| legislatures began granting more bank charters | |
| (20) | in the 1790s and early 1800s, the supply of |
| credit rose accordingly. Unlike the earliest banks, | |
| which had primarily provided short-term loans to | |
| well-connected merchants, the banks of the early | |
| nineteenth century issued credit widely. As Paul | |
| (25) | Gilje asserts, the expansion and democratization |
| of credit in the early nineteenth century became | |
| the driving force of the American economy, as | |
| banks began furnishing large amounts of capital | |
| to transportation and industrial enterprises. The | |
| (30) | exception, such historians argue, was in the |
| South; here, the overwhelmingly agrarian nature | |
| of the economy generated outright opposition | |
| to banks, which were seen as monopolistic | |
| institutions controlled by an elite group of | |
| (35) | planters. |
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