The Federal Reserve and the Economy

Introduction: In the 19th degree Celsius, no accepted banking system had really been genuine in the US. This is to say that, though there were roughly great hundred private moneymaking(prenominal) banks that had been chartered by new landed estate governments, the questionable system was scarcely organized. It directly linked to the merchant banking practices of the pre-independence period. The long time preceding the turn of the century were important because they brought a rally banking authority onto the scene. The last quarter of the 19th century was truly difficult. The economy was subjected to several deflationary crises; The Second localize war mental picture of 1873-79, the Depression of 1884, the disquietude of 1893-94, and the Silver endeavour Depression of 1896-97. During the 1893-97 period total output fell by close 20 percent in two years and in 1894 the unemployment rate hit 18%. Finally, following the Panic of 1907, congress appointed the National pec uniary centering to control what should be done to prevent future crises. The National Monetary Commission determined that the primary causes of the Panic of 1907 were lack of a dominant money, an inelastic money supply, and pyramiding of reserves. The recommendations of the Commission were embody in the Federal Reserve Act of 1913. The lack of common currency was one of the factors of creating a central bank. Upon their Declaration of freedom from England, the 13 colonies were without a common currency. Their money supply consisted in world(a) of foreign coins. The Continental Congress financed the Revolutionary War by issuing $225 million dollars of paper money. These Continental paper dollars were non redeemable for specie (gold and silver coin) and were issued in such sens that, by 1781, each dollar bought less than a pennys monetary value of goods. When drafting the Constitution, the Founding Fathers debated whether the new government should have... If you want to go aw! ay a full essay, order it on our website: OrderEssay.net

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