Central Banking in the U.S. - The 1820's to the Civil War
More history ...
The Jacksonian Movement and the Bank War 209
To dilute the authority of the central bank (and his political enemies within it), Andrew Jackson began shifting treasury deposits from the central bank to state banks, which did a great deal to reduce inflation and stabilize the economy ... for a while.
Inflation returned with a vengeance in the early 1830's due to an influx of Mexican silver coin (more metal in circulation decreases demand, hence the value of currency). Attempts to prop up the value of currency against this influx of metal, and at the same time to preserve the value of currency in repayment of foreign debts, caused a handful of swings in the economy.
Ultimately, it was decided that the federal government would be its own bank, and would issue banknotes based on the hard money (silver) that it kept in reserve.
Decentralized Banking from the 1830's to the Civil War
There was some decentralized banking, in the form of state an community banks, but the difficulty of redeeming currency across state lines removed any sense of competition, and made these state banks the equivalent of central banks in their respective states.