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End of American Revolution
The American Revolution grew out of conflicts between Great Britains 13 North American colonies and the colonial government, which was made up of the British Crown.This Revolution was basically an armed revolt for independance of the rebels against the British troops that dragged on for many years. With the aid of the French, The Continental Army gained their Independance from British reign in Yorktown, Virginia in 1781. The fighting would not stop until 1783. -
First Bank of the United States is Established
Congress built the first U.S. bank and granted it a 20 year operating charter.This bank used bank notes that were backed by gold and silver. This bank was used by the US treasury to hold tax money and was also used to watch over other banks and make sure they were sufficient in gold and silver in order to not start a bank crash. -
First Bank Charter Runs Out
The first bank of the us functioned safely until Febuary 25, 1811 when its charter ran out. this started a wave of panic over the people which resulted in numerous bank runs, where people demand all their bank notes be converted to gold or silver so they dont lose money. the bank could no longer back up their bank notes with specie so the market crashed. banks started giving out their own currency which started a lot of confusion as to what was worth what in circulating money. -
2nd Bank of the United States is Established
just like the first bank of the us, this one had a 20 year charter in which it used to slowly regain confidence of the people in the banking system. Nicholas Biddle, president of the bank, would strategically go to other banks and demand all his bank notes to be converted to money in order to put banks out of busines and boost his own bank. this made other banks learn to not give out so many bank notes at a time and do business off what they actually have in store. -
President Andrew Jackson Vetoes 2nd US Bank Renewal
President Andrew Jackson, siding with the people, decides to veto the renewal of the national bank due to increasing tension between the wealthy and middle classes. The majority of the people saw how the wealthy were getting wealthier and the poor were being bought out by the rich. Due to this decision, tate chartered banks began to prosper -
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Free Banking Era
After the fall of the 2nd national bank, state chartered banks began to flourish everywhere. This however sprung a few problems; Bank runs began to happen often and banks would go out of business aswell as drop the wealth of the society. Wild cat banks also began topop up in many places but would be known for a lot of fraud and poor business. Banks began making their own currencies to keep up with customers and be able to pay their bank notes. -
National Bank Act
The problems that this act strove to fix were the multiple different currencies in circulation and fraudulent bank systems. The NBA did this by enacting a national currency that many called greenbacks. now the banks could only issue enough greenback to fill the amount of gold they had, they would only print the same amount of gold in circulation s there would not be an overflow of paper money and not enough gold to back it. this stabilized banks and set the sight to succeeding. -
Federal Reserve Act
The Federal Reserve Act formed the federal reserve system, or fed, that grew the first central bank. a central bank is one tht can loan to other banks in time of need. The fed system started 12 federal reserve banks across the country, each placed in their own district to which they could support. there is a fed board to which are the supervisors of the reserve banks and make sure they stay on path. the support the central banks provided helped regional banks stay in business during panics. -
Stock Market Crash of 1929
Although the fed banking system helped regional banks prosper, it could not however keep the Great Depression from happening. Banks were getting comfortble with the benfits fed banks provided and would loan high amounts of money away to large risk businesses in hopes for maximum profit. More and more business could not pay back their loans wich led to the banks not being able to pay back the central banks. This began the Stock Market crash and years of depression. -
Federal Deposit Insurance Corportion
Congress passed the FDIC act to protect consumers when banks fail, they did this by insuring customers deposits when a bank fails. this would give the consumers the first layer of protection for their money in banking systems.Federal legislation reduced individuals ability to redeem dollars for gold so easily. This led to "currency being fiat money, backed only by government's decree that established its value" which gave the government the controls to economy. -
Subprime Mortgage Collapse of 2008
The US economy came very close to a crisis point when many homeowners could not repay thier loans. These instances led to a sharp growth in foreclosures, which wrecked the American Economy.Many of the nations largest financial institutions that invested greatly into subprime mortgages were all of a sudden faced with bankruptcy. This led to thousands of people losing their jobs and going into homelessness.By late 2008, US was finally in recession.
