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Hamilton's proposal of the First National Bank.
The First Bank of the United States was brought into being as one of the three major financial innovaitons of its time. This bank was proposed and supported by the first Secretary of the Treasury, Alexander Hamilton. There were three main goals that this bank was created to obtain. These goals were, to establish financial order, establish credit, and resolve the issue of the flat currency. -
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The duties of the First National Bank of the United States
The duties of the bank were to hold the money that the government collected for taxes, help the government carry out its powers, issue representative money in the form of bank notes, and ensure that the state-chartered banks held sufficient gold and silver to exchange for banks notes should the demand arise. -
2nd bank of the United States
The Second Bank of the Uninted States was tasked with rebuilding the public's confidence in a ntional banking system Although, due to the collapse of the its predecesor, many individuals, including President Andrew Jackson, opposed the idea of another national bank. -
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Free Banking/ "Wildcat" Era
The fall of the Second Bank triggered yet another period of state-charttered banks. For this reason, the era between 1830 and 1863 became known as the "Free Banking" or "Wildcat" Era. Ther were 4 main problems that took place during this time. The problems were that banks did not keep enough gold and silver to back the paper money they issued, some banks were located on the edges of setteled areas, some banks engaged in fraud, and many different banks had different currencies. -
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Demand notes
A Demand Note is a type of paper money that the United States issued to its citezens during the American Civil War. The main denominations of these notes were 5, 10, and 20 dollar bills. -
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National Bank Acts
The National Banking Acts were two United States federal acts that established a system of natinoal banks for banks. These acts also created the United States National Banking System. These acts encouraged the develpment of a natinoal currency, and also shaped today's national banking system that supported a uniform U.S. banking policy. -
The Gold Standard of the 1870s
The Gold Standard was a monetary system that the nation adopted in order to have the value of paper money and coins equate the value of certain amounts of gold. The advantages of the Gold Standard were to set a definite value for the dollar, and so that the government could issue currency only if it had gold in the treasury to back the notes. -
Panic of 1907
The Panic of 1907 was caused by the nation's lack of adequate reserves. Many banks had to stop exchanging gold for paper money, several New York banks failed, and many people lost their jobs because business didn't have the money to invest in future products. This crisis showed that the country needed a central banking system, and in light of this discovery, plans were made to reinstate a central bank. -
Federal Reserve Act
The Federal Reserve System/Act served as the nation's first true central bank. This System/Act created a reorganized banking system with member banks, the federal reserved board, short-term loans, and the federal reserve notes. -
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The Great Depression
The Great Depression was the most severe economic decline in the history or America. The initial crisis started with a series of loans. Banks loaned large sums of money to high-risk business, and the businesses couldn't pay back their loans. Farmers suffered becasue their crops failed, undpaid loans and bank runs resulted in the mass failure of thousands of banks across the enitre country. -
Glass-Steagall Act
The Glass-Steagall Act was an act action that paved the way for banks to sell ftheir financial assets such as stocks and bonds. They were also able to establish new privacy rules for customer data. -
Federal Deposit Insurance Agency (FDIC)
The FDIC was established to insure customer deposits if a bank were to fail. In additon, federal legislation that was passed during the Great Depression, restricted any indivduals ability to redeem dollars for gold. After some time passed, currency became flat money that was backed only by the government's decree that establishses the value of it. In doing this, the Federal Reserve maintains a money supply at adequate levels to support our nations growing economy. -
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Saving and Loan Crisis
The Saving and Loan Crisis was brought about by high interest rates, inadequate capital, and fraud amonongs other things. Other problems that were associated with this crisis were, deregulation,and bad loans. -
Financial Institutions Reform, Recover, and Enforcement Act (FIRREA)
The Financial Insitutions Reform, Recovery, and Enforcement Act essentially abolished the independence of the savings and loan industry. In doing this, the responsibility of insurance was given to the FDIC.
