The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. These new banks concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the article shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing and the nation's sudden capital deepening. The entry not only resulted in more manufacturing capital and output at the county level, but also more steam engines and value added at the establishment level.
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