ERIC Number: ED174544
Record Type: Non-Journal
Publication Date: 1978
Reference Count: N/A
Historical Beginnings...The Federal Reserve.
Johnson, Roger T.
The booklet presents an historical narrative of banks and banking events leading to the establishment of the Federal Reserve System in 1914. The document is divided into three chapters. Chapter I discusses attempts to establish a bank before the 20th century, describing the creation of two central banks whose chapters were allowed to lapse, the First Bank of the United States in 1791, and the Second Bank of the United States in 1816. It hypothesizes that the National Banking Act of 1863 was inadequate because it failed to provide a central banking structure and, further, that the financial panics and economic depression which followed this act were triggered by inelastic currency and immobile reserves. Chapter II details financial reform in the 20th century, concentrating on the activities of the 1908 National Monetary Commission, and the pros and cons of the Aldrich plan of 1911. It also traces how the Pujo hearings investigating the "money trust," and the election of Woodrow Wilson led to the Glass-Willis proposal in 1912. Also described are the introduction of the Federal Reserve bill into Congress in 1913, and the ensuing political struggle, compromises, and final adoption. Chapter III outlines the establishment of the system, including selection criteria for each of the 12 regional centers, organization of national banks into formal membership, election of local directors, and Wilson's appointment of and Congressional ratification of the Federal Reserve Board. Concluding comments recount how, on November 16, 1914, the Federal Reserve banks opened, without permanent headquarters and with very little business. (CK)
Publication Type: Guides - Classroom - Learner
Education Level: N/A
Authoring Institution: Federal Reserve Bank of Boston, MA.