-
1791 Bank of the US
The First Bank of America was proposed by Alexander Hamilton 1791. The purpose of the bank was to serve as a repository for federal funds and as the government's fiscal agent. Some people, including Thomas Jefferson, opposed the idea. The proposal was accepted by Washington and the bank was chartered for 20 years. The bank was used to finance the US's financial war debt, create a more uniform paper currency, and expand the availability of credit nation-wide. The bank's charter wasn't renewed -
1816 Second Bank of the US
After the war of 1812, America was left in debt once again. Congress began questioning bringing the national bank back again. In 1816 President Madison signed a bill authorizing the Second Bank of the US. The bank worked the same way that the first bank did and also financed westward expansion.When Andrew Jackson was elected in 1829 he removed all federal funds from the bank and moved them to state charted banks. The bank remained open to the public until 1836 when it's carter expired -
Civil War Currency
The Civil War caused a coin shortage in the North and the South. In 1861, the first official paper currency of the US called demand notes entered circulation. These demand notes came in $5, $10, and $20 increments. In 1862, official US notes were produced and are more close to what we use today. The Confederate States of America issued their first paper currency in 1861. These notes came in 50 cents, $1, $2, $5, $10, $20, $50, $100, $500, and $1,000 -
1863 National Banking Act
The National Banking Act of 1863 was created in order to create a national banking system, float federal loans, and establish a national currency. The Civil War caused a severe financial crisis in America so the National Bank Act of 1863 was introduced to Senate to resolve it. The act was passed and national banks that were organized under the act were required to buy government bonds as a condition of start-up. The National Bank Act did improve the nation's state but it didn't solve them. -
1913 Federal Reserve Act
The Federal Reserve Act, which was enacted on December 23rd, 1913, created the Federal Reserve System. The Federal Reserve System is the main banking system of the United States of America and has three main functions. These functions are financial services, banking supervision, and monetary policy. The Federal Reserve Act of 1913 was signed by Woodrow Wilson. -
1930's Depression
America's Great Depression started after the stock market crash of 1929. Hundreds of thousands of people withdrew their deposits from banks overnight, however, the banks didn't have enough money to give the people. Franklin D. Roosevelt was elected in March of 1933 and announced a three day banking holiday in which all financial transactions were halted, nearly 1,000 banks were saved. On January 1st, 1934 the FDIC was established and since then no depositor has lost insured funds. -
Glass-Steagall Act
During the Pre-Depression era of America commercial banks were accused of being too speculative with investing their assets. Banks became greedy and started taking on high risks which in turn made them very sloppy. Due to this the Glass-Steagall Act was passed. This act set up a regulatory wall between commercial and investment bank activities. Banks were given a year to decide whether to be a commercial or investment bank. This act was considered to be harsh and was later repealed. -
1970's (Banking)
Due to rising international competition, declining productivity and profitability, spiking energy prices, and soaring inflation and unemployment, the leader of the capitalist world was being challenged. The American Central Bank had easy-money policies that were designed to generate full employment, however these policies caused inflation to rise drastically. Later these policies would be reversed causing interest rates to soar to as high as 20%. -
1980's Recession Cont.
The Economic Recovery Act of 1981 didn't seem to help much as the recession deepened in 1982. By mid 1983 the recession was officially over and unemployment fell by 2.5%. America continued its economic recovery through the 80's and into the 90's creating what was at the time the longest peacetime economic expansion in US history. -
1980's Recession
Due to the increasing of federal funds rate, credit became harder to obtain for house and car loans. This caused caused unemployment in the automobile and housing industries. Towards the middle of 1980 the recession seemed to be coming to an end as unemployment and interest rates were dropping however by the end of the year unemployment and interest rates began rising again. The recession continued in to 81' and President Reagan decided to sign the Economic Recovery act of 1981,,, -
Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act, enacted on November 12th, 1999, repealed part of the Glass-Steagall Act by removing barriers placed upon banking companies, security companies, and insurance companies that kept any institution from acting as a combination of an investment bank, commercial bank, and insurance company.
