The Federal Reserve System is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.
The National Banking Acts of 1863 and 1864 were two United States federal banking acts that established a system of national banks, and created the United States National Banking System. They encouraged development of a national currency backed by bank holdings of U.S. Treasury securities and established the Office of the Comptroller of the Currency as part of the United States Department of the Treasury and a system of nationally chartered banks. The Act shaped today's national banking system and its support of a uniform U.S. banking policy.
The Aldrich–Vreeland Act was passed in response to the Panic of 1907 and established the National Monetary Commission, which recommended the Federal Reserve Act of 1913.
The Federal Reserve Act is an Act of Congress that created the Federal Reserve System, and which created the authority to issue Federal Reserve Notes as legal tender. The Act was signed into law by President Woodrow Wilson.
Nelson Wilmarth Aldrich was a prominent American politician and a leader of the Republican Party in the United States Senate, where he served from 1881 to 1911. By the 1890s he was one of the "Big Four" key Republicans who largely controlled the major decisions of the Senate, along with Orville H. Platt, William B. Allison and John Coit Spooner. Because of his impact on national politics and central position on the pivotal Senate Finance Committee, he was referred to by the press and public alike as the "General Manager of the Nation", dominating tariff and monetary policy in the first decade of the 20th century.
In monetary economics the real bills doctrine asserts that money should be issued in exchange for real bills. 'Real bills' represent transactions of real goods and services in the economy, or ones soon to be realised. They can be invoices for raw or wholesale goods to be paid to a supplier within a certain time window, i.e. commercial paper. Thus, they allow a manufacturer or retailer time to receive income from the goods without the need for upfront payment. 'Real bills' can also refer to short term bills of exchange, bankers' acceptances, or other short term promissory notes. If the 'real bills' are sold on to a third party it is usually at a discount.
This history of central banking in the United States encompasses various bank regulations, from early "wildcat" practices through the present Federal Reserve System.
The Federal Reserve System has faced various criticisms since it was authorized in 1913. Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz criticized the Fed's response to the Wall Street Crash of 1929 arguing that it greatly exacerbated the Great Depression. More recent prominent critics include former Congressman Ron Paul.
The Banking Act of 1933 was a statute enacted by the United States Congress that established the Federal Deposit Insurance Corporation (FDIC) and imposed various other banking reforms. The entire law is often referred to as the Glass–Steagall Act, after its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama. The term Glass–Steagall Act, however, is most often used to refer to four provisions of the Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms. That limited meaning of the term is described in the article on Glass–Steagall Legislation.
Charles August Lindbergh was a United States Congressman from Minnesota's 6th congressional district from 1907 to 1917. He opposed American entry into World War I as well as the 1913 Federal Reserve Act. Lindbergh is best known as the father of famous aviator Charles Lindbergh.
The Independent Treasury was the system for managing the money supply of the United States federal government through the U.S. Treasury and its sub-treasuries, independently of the national banking and financial systems. It was created on August 6, 1846 by the 29th Congress, with the enactment of the Independent Treasury Act of 1846, and it functioned until the early 20th century, when the Federal Reserve System replaced it. During this time, the Treasury took over an ever-larger number of functions of a central bank and the Treasury Department came to be the major force in the U.S. money market.
The National Monetary Commission was a study group created by the Aldrich-Vreeland Act of 1908. After the Panic of 1907, the Commission studied the banking laws of the United States, and the leading countries of Europe. The chairman of the Commission, Senator Nelson Aldrich, a Republican leader in the Senate, personally led a team of experts to major European capitals. They were stunned to discover how much more efficient the European financial system appeared to be and how much more important than the dollar were the pound, the franc and the mark in international trade. The Commission's reports and recommendations became one of the principal bases in the enactment of the Federal Reserve Act of 1913 which created the modern Federal Reserve system.
Robert Latham Owen Jr. was one of the first two U.S. senators from Oklahoma. He served in the Senate between 1907 and 1925.
The Pujo Committee was a United States congressional subcommittee in 1912–1913 that was formed to investigate the so-called "money trust", a community of Wall Street bankers and financiers that exerted powerful control over the nation's finances. After a resolution introduced by congressman Charles Lindbergh Sr. for a probe on Wall Street power, congressman Arsène Pujo of Louisiana was authorized to form a subcommittee of the House Committee on Banking and Currency. In 1913–1914, the findings inspired public support for ratification of the Sixteenth Amendment that authorized a federal income tax, passage of the Federal Reserve Act, and passage of the Clayton Antitrust Act.
Benjamin Strong Jr. was an American banker. He served as Governor of the Federal Reserve Bank of New York for 14 years until his death. Strong exerted great influence over the policy and actions of the entire Federal Reserve System—and indeed over the financial policies of all of the United States and Europe.
This article details the history of banking in the United States. Banking in the United States is regulated by both the federal and state governments.
This article is about the history of monetary policy in the United States. Monetary policy is associated with interest rates and availability of credit.
Monetary reform, the reform of monetary creation and thus of the banking system, is a topical political issue in the United States, especially in light of the public debt, household debt, Social Security and other public sector undertakings and state debts. The financial crisis that began in U.S. in the fall of 2007 and subsequently affected large parts of the world, and was followed by massive bank rescues, also plays a major role in this context as well as criticism of Federal Reserve. Strictly speaking, there are two separate movements for monetary reform in the U.S., one is more left-wing and the other is more right-wing. In Congress these views are represented mainly by Dennis Kucinich, which belong to the progressive left, and Ron Paul, known right-wing "Fed critics." The debate often focuses on questions such as how the banking system works today, debts, bailouts, the Federal Reserve, and more. But history is also alive in the debate, for example is Abraham Lincoln's so-called Greenbacks something that often is mentioned. The main American organization for "monetary reform" is the American Monetary Institute.
The Banking Act of 1935 passed on August 19, 1935 and was signed into law by the president, Franklin D. Roosevelt, on August 23. The Act changed the structure and power distribution in the Federal Reserve System that began with the Banking Act of 1933. The Act contained three titles.
The National Emergency Employment Defense Act, aka the NEED Act, is a failed monetary reform proposal submitted by Congressman Dennis Kucinich in 2011, in the United States. The bill has failed to gain any co-supporters and was not introduced to the floor of the house.
