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A History of Banking in Maine

The first Maine bank was the Portland Bank, chartered in 1799. Until the early 1800s, however, Maine trade was conducted to a considerable extent by barter. The Spanish silver dollar was the principle medium of exchange. Deposits and check currency were practically unknown to the general population and they were not used to any great extent among merchants. Until its separation in 1820, Maine was a district of Massachusetts, and Boston was the financial, political and social center of the whole territory. There was, however, considerable resistance to control by Massachusetts. Maine businessmen increasingly saw the advantages of bank notes, especially for real estate speculation. In the early days of banking, loans were often made to stockholders before capital had been paid in. Banking was investor-driven vs. depositor-driven, and was based on large commercial ventures such as real estate (primarily large land holdings and railroads). Problems of unredeemable notes were common. Regulations were almost non-existent and hard to enforce. It was not unusual for early Maine banks to be established by a single family in their home or by small associations, further complicating regulation.