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Federalists wanted a centralized banking system and Alexander Hamilton, as Secretary of the Treasury, proposed a national bank in 1789
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Federalists won the first debate and in 1971, Congress established the Bank of the United States. Yet, disagreements over the Bank continued
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To eliminate the chaos, Congress charted the Second Bank of the United States in 1816
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As state-charted banks flourished once again from 1837 to 1863, the sheer number of banks gave rise to a variety of problems
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The National Banking Act of 1863-1864 gave the federal government power; the 1870s the nation adopted the gold standard, which set a definite value for the dollar
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Problems persisted despite the stabilizing efforts of a national currency and adopting the gold standard
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The Federal Reserve Act establsihed the Federal Reserve System, which reorganized the federal banking system
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The Fed, however, was unable to prevent the Great Depression. President Franklin Roosevelt acted to restore the banking system in the 1930s by establishing the FDIC, which insured customer deposits if a bank failed.
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In the late 1970s and 1980s, Congress passed laws to deregulate several industries.
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In 1989, Congress passed legislation that abolished the independence of the Savings and Loan Industry
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Mortgage companies and banks began to loan people money who could not afford to pay these loans back