US Bank History
Going over the basics of how we went from then to now.
1791 Bank of The US
The first bank was located in Philadelphia. Pennsylvania. The bank was established as a means to relieve the amount debt after the revolutionary war, to create a standard currency of bills and coins, and to have a national bank established to support the needs of the new nation.
1816 Second Bank of the US
Also located in Philadelphia, Pennsylvania, it held the same duties as the first. The bank was chartered by Andrew Jackson and would last 20 years. Groups of people -namely the Old Republicans- opposed it, so in 1836 it was challenged and brought to an end. Without a national bank to regulate currency the states began making their own. Which, you can imagine, becomes difficult when there's trade between any two states.
What Happened to the Banking System During the Civil War?
When the Civil war broke out, more money was needed to support the war efforts. The US found itself in even more debt from the costs and was in need of a better system of money. Having different currency state-to-state made trade a hardship, so they attempted to make currency that would represent a value and could be used, however they needed to be backed by gold and used as a temporary solution. These were known as 'greenbacks'.
It's An Act
1863 National Banking Act
By giving the federal government more power, the hope was a national bank could form. Goals to help unify the system included making a national currency and starting a fund to help fill the gaps left behind by the Civil War.
1913 Federal Reserve Act
US hadn't seen a banking system since 1836. Now the bank would hold more powers. Its jobs were to oversee commercial banks, be the government's bank, control money circulation and interest rates, and enforce laws that had to do with borrowing money.
Falling into the Great Depression
1929, the year the stock market crashed, marked the beginning of the Great Depression. Banks get money from consumers buying stock, so when people stopped doing that banks could not longer stay afloat and died. As the system goes, the people's money would be protected in the national bank, however this happened at too wide a radius and there wasn't enough money to be supplied. people desperately trying to extract their money only made it fall further.
Glass-Steagall Banking Act
Prevented commercial banks from investing so it could counteract the damage from failed banks.
The 1970's
The 1970's experienced a fiscal crisis because there was not enough money in circulation.
1982
Unemployment increased a lot and the president at the time and ignored the problem. People began questioning what his motives were, and if this was the gateway to another depression. Fortunately, within a year, things returned to a better state.
Gramm-Leach-Bliley Act of 1999
Ended Glass-Steagall Act and took away other regulations so the US could have a system more suited to its time. This, however, increased the risk of having too much availability to personal information.