History of the Federal Reserve

By morganrenee96
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    U.S. Currency

    To finance the American Revolution, the Contiental Congress printed the new nation's first paper money, "continentals". The money notes were issued with such quantity they led to inflation which rapidly increased as the war progressed.

  • First Bank of the United States

    Established by Congress on a 20-year charter. The bank acted as the government's fiscal agent, marketing its securities, holding its revenues, and paying its debts. It was led primarily by private investors.

  • End of the First Bank

    20-year charter expired and Congress refused to renew it by one vote

  • Second Bank of the United States

    Mostly private ownership and its governance was geographically centralized. Many viewed it as a "concentration of power in the hands of a few men irresponsible to the people".

  • Andrew Jackson

    Andrew Jackson was elected president and vowed to kill the central bank.

  • Second Charter Expires

    The Second Bank's charter expires and is not renewed.
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    The Free Banking Era

    State-charted banks and unchartered "free banks" took hold during this period, issuing their own notes, redeemable in gold or specie.

  • New York Clearinghouse Association

    Established to provide a way for the city's bank to exchange checks and settle accounts.

  • National Banking Act

    Provided for nationally chartered banks whose circulation notes had to be backed by U.S. government securities. State banks continued to flourish due to the growing popularity of demand deposits.
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    Financial Panics Prevail

    Bank runs and financial panics continue to plague the economy

  • Panic of 1893

    Banking panic triggers the worst depression the US had ever seen

  • Panic of 1907

    A bout of speculation on Wall Street ended in failure.

  • Aldrich-Vreeland Act of 1908

    Was passed in response to the Panic of 1907. It provided emergency currency issue during crisis.

  • Election of Woodrow Wilson

  • Glass-Willis Proposal

    Carter Glass and H. Parker Willis labored over a centeral bank proposal and then presented it to President Wilson

  • Federal Reserve Act

    President Wilson signed the aact into law. It was a decentralized central bank that balanced the competing interests of private banks and poulist sentiment

  • World War I

    US banks continue to operate normally. The greatest impact in the US came form the Reserve Banks' ability to discount bankers acceptances. Through this mechanism, the US aided the flow of trade foods to Europe, indirectly helping to finance the war until 1917.