History of Banks

Heidi Hernandez

Bank of the U.S 1791

  • The need for the first bank was because of the debt of the Revolutionary War and the issue of all state banks had the various forms of money
  • The bank only functioned for 20 years
  • It failed because state banks felt that national government had too much power over them

Second Bank of the U.S 1816

  • The second bank was formed after the War of 1812 when the realization that is was impossible to sustain another war without the national bank
  • It functioned for 20 years
  • The bank failed because state banks were still issuing their own money and because state banks weren't being regulated nor were other banks being charted

(the picture below is the example of the second bank)

Big image

Currency of the Civil War 1861

  • U.S Treasury issued paper money in all banks
  • This was start of the use of gold to back the paper money

(the picture below is an example of the paper money during the Civil War)

Big image

National Banking Act 1863

  • The act allowed banks to have a dual banking (consisted of state and federal banking)
  • This banking act was enacted by the North for a period 3 years during the Civil War
  • The currency had a treasury seal embedded in it

(the picture below is an example of the money embedded with a treasury seal)

Big image

Federal Reserve Act 1913

  • The Federal Reserve Act regulated the money and credit of the economy
  • Produced (and produces) the currency of the U.S
  • It established 12 regional Federal Reserve Banks

Great Depression of 1930 (Banks)

  • The cause of the Great Depression was because banks collapsed due to a national panic that banks weren't to trusted
  • President FDR declared this event as a "bank holiday" and only those banks that could prove they were stable were given permission to re-open

(the picture below is how people would stand out of banks demanding their money)

Big image

Glass Steagall Banking Act 1933

  • Established the "Federal Deposit Insurance Corporation" that ensured that if a bank were to undergo a crisis the people would still have their money
  • This was used to restore the peoples trust with banks after the Great Depression

Gramm Leach Bliley Act 1999

  • This act allowed banks more control over insurance, securities, and banking; this also reduces competition between state banks
  • The down side of the act is that it allows there to also be a reduction of privacy between banks, so they have to share information of each to each other