Woodrow Wilson started banking reform. Representative Glass and Prof. Willis worked to write the Federal Reserve Act



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Name PF Day2 9/21/09




Woodrow Wilson started banking reform. Representative Glass and Prof. Willis worked to write the Federal Reserve Act

1836-1865

State-chartered and unchartered ‘free banks’ took hold; different notes sand demand deposits

Second Bank chartered; Andrew Jackson opposed the Second bank as controlled by ‘money interests’

Government issued ‘fiat’ money (legal tender)to fund Revolutionary War.

First Bank of US established 1791





Bank panics are common. 1893 serious depression; bailed out by JP Morgan



WWI

1914




1775-1791



1913

1873-1907

1816



1907- much speculation on Wall Street- disaster- JP Morgan to the rescue AGAIN

During the Civil War –National Banking Act 1863 created National Banks backed by gov’t securities; uniform currency



Federal Reserve created in 1913

Charter not renewed in 1836

Philadelphia



1914-1919

Aldrich-Vreeland Act 1908 supplied emergency currency; helped finance the war until 1917



The Banking Act of 1935-created the FOMC;
separation of the Fed and Treasury



Market crashed and Great Depression; 10,000 banks failed; Franklin Roosevelt declared a bank holiday in March 1933.

Open Market Operations- gold no longer controlled the flow of credit. Benjamin Strong-New York Fed- recognized this



Roosevelt recalled all gold and silver certificates, ending the gold standard.



1929-1933

1920



193 5

1933



After WWII the Employment Act added employment to the Fed’s responsibilities.
1956- Bank Holding Act named the Fed as regulator for bank holding companies.
1978 Humphrey-Hawkins Act required the Fed Chairman to report to Congress twice a year.

US officially declared war 1917



Too much speculative lending. Congress passed the Banking Act of 1933- Glass Steagall Act—separated commercial and investment banking. Created the FDIC

Strong began trading with banks in other countries


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