The Federal Reserve System, What is it? What are the purposes and functions of this system? Who runs this system? Today I intend to inform you on The Federal Reserve System and answer all of the above questions. I am going to start by giving you some background information on how the system was created and for whom. I will explore the structure of the Federal Reserve System and describe their responsibilities in the system. .
I want to explore the history of the Federal Reserve System and did not know of any better way to do it then listing the crucial points of the system below. .
The Federal Reserve System is the central bank of the United States. .
In 1775 to finance the American Revolution, congress printed the country's first paper money. The notes raised inflation and people lost faith in the currency.
In 1791 Alexander Hamilton pushed to have the first bank of the United States established. The bank was located in Philadelphia and after a 20 year run, congress refused to renew the charter.
In 1816 the Congress agreed to charter the Sceond Bank of the United States. Andrew Jackson did not like the idea of a central bank controlling the money and refused to renew the charter. .
In 1836 free banks began to issue their own paper notes and offered checking. In 163 the National Banking Act was passed that said that money in circulation had to be backed by the United Stated government securities. .
In 1873 "bank runs and financial panics" ran the nation and started the depression which was then stabilized by J.P. Morgan.
In 1907 Americans agreed that some kind of "authority" was needed to ensure a currency that was elastic. .
1912 the election of Woodrow Wilson had a plan of a decentralized central bank under public control. .
In December of 1913, Woodrow Wilson signed and passed the Federal Reserve Act which stated its purpose. The original statement was "To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the Unites States, and for other purposes".
