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First American Bank
Congress established first national bank, it was the first central banking system in the United States. It helped unify America’s economy. However, it faced major opposition, including being despised by George Washington, Thomas Jefferson, and Benjamin Franklin- some of our country's greatest founders. It had eight branches. -
Twenty Year Charter Denied
The original twenty year charter for the First National Bank was not renewed. -
Second National Bank
Congress established the Second National Bank in 1816 after the First National Bank was abolished in 1811. It had the exact same functions as the First National Bank, however. Its biggest contributuion to America was financing the debt of the War of 1812. The Bank president was Nicholas Biddle. President of the U.S. at the time and him were at odds over the bank itself. -
Second National Bank Denied
Congress refuses to renew the contract, which was made out to be twenty years just like the First National Bank. This serves as the end for the Second National Bank. -
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Central Bank Drought
There is no central bank for 75 years after Second National Bank is denied a renewal of it's original twenty year contract. The centralized banking system is revived in America for the start of the First World War. -
Crisis of 1893
The Panic of 1893 was a serious economic depression in the United States that began in 1893. Similar to the Panic of 1873, this panic was marked by the collapse of railroad overbuilding and shaky railroad financing which set off a series of bank failures. Compounding market overbuilding and the railroad bubble, was a run on the gold supply. The Panic of '93 was the worst economic depression the United States had ever experienced at the time. -
Banking Crisis of 1913
It occurred in the United States when the New York Stock Exchange fell almost 50% from its peak the previous year. Panic occurred, as this was during a time of economic recession, and there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. -
Federal Reserve Act of 1913
It was an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar) and Federal Reserve Bank Notes as legal tender. The Act was signed into law by President Woodrow Wilson. -
McFadden Act of 1927
The McFadden Act is a United States federal law, named after Louis Thomas McFadden member of the United States House of Representatives and Chairman of the United States House Committee on Banking and Currency, enacted in 1927 from recommendations made by the comptroller of the currency Henry May Dawes. The Act sought to give national banks competitive equality with state-chartered banks by letting national banks branch to the extent permitted by state law. The McFadden Act specifically prohibi -
Beginning of Great Depression
Stock prices in the United States began to decline. This was officially the start of the Great Depression. Events soon to proceed only became worse from here on out. -
Black Tuesday
The Wall Street Crash of 1929, also known as the Great Crash and the Stock Market Crash of 1929, began in late October 1929 and was the most devastating stock market crash in the history of the United States when taking into consideration the full extent and duration of its fallout. The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries and did not end in the United States until the onset of American mobilization for World War II. -
FDIC Established
During the 1930s, the U.S. and the rest of the world experienced the Great Depression. In the U.S. during the height of the Great Depression, the official unemployment rate was 25% and the stock market had declined 75% since 1929. Bank runs were common because there was not insurance on deposits at banks, banks kept only a fraction of deposits in reserve, and customers ran the risk of losing the money that they had deposited if their bank failed. The FDIC was established to provide deposit insu -
Banking Act of 1935
This law made the FDIC a permanent agency of the federal government. It also provided that the stock of the FDIC was to be purchased by the Secretary of the Treasury on behalf of the United States, and that the deposit insurance system was to be maintained through assessments directly on the insured institutions. -
Federal Accord
This was an agreement between the Department of the Treasury and Federal Reserve; it restored independence to the Fed.
During World War II, the Fed pledged to keep the interest rate on Treasury bills fixed at 0.375 percent. It continued to support government borrowing after the war ended, despite the fact that the Consumer Price Index rose 14% in 1947 and 8% in 1948, and the economy was in recession. -
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Inflation and Deflation
Inflation skyrocketed in the 1970s, as seen by a steep rising in consumer prices, the increasing of the price of gas, and the doubling of federal deficit. By August 1979 Paul Volcker was sworn in as Fed chairman. His leadership as Fed chairman during the 1980s, though painful in the short term, was successful overall in bringing double-digit inflation under control. -
Monetary Control Act of 1980
This law was signed into effect by President Jimmy Carter, arguably one of the few positive things he did as president, on March 31. The essence of what it did was to give the Fed greater control over non-member banks. Some of the ways it gave them this was by forcing all banks to abide by the Fed's rules, allow banks to merge, raised the deposit insurance of US banks and credit unions from $40,000 to $100,000, allowed bank institutions to charge any loan interest rates they choose, and more. -
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Longest American Economic Expansion
The Stock Market crashed on October 19, 1987, only 2 months after Alan Greenspan took office as the Fed chairman. He responded to thsi crisis immediately by issueing the response: “The Federal Reserve, consistent with its responsibilities as the nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.” Vast economic expansion soon followed and ended in March 2001 by a short, swallow recession that ended in in Nov. 2001. -
September 11th Terrorism Attacks
The effectiveness of the American Federal Banking System was put to its test when Al-Queda terrorists hijacked planes and flew two into the World Trade Center, not only sending the nation into panic but also destroying the two crucial buildings. Feds responded similiarly to how it did back in 1987 stating, "The Federal Reserve System is open and operating. The discount window is available to meet liquidity needs." Additionally, the Fed lowered interest rates and loaned more that $45 billion. -
Financial Crisis and Recession
During the early 2000s, low mortgage rates and expanded access to credit made homeownership possible for more people, increasing the demand for housing and driving up house prices. The housing boom got a boost from increased securitization of mortgages—a process in which mortgages were bundled together into securities that were traded in financial markets. Securitization of riskier mortgages expanded rapidly, including subprime mortgages made to borrowers with poor credit records.
