Module 13

Lesson 2 Mastery Assignment

1791-Bank of the US:

  • Was needed because the US had debt from the Revolutionary War
  • Was Built while Philadelphia was still the capital
  • In 1811 Congress voted to abandon the bank and its charter

1816-Second Bank of the US:

  • Founded after the war of 1812
  • Was plagued with poor management and fraud
  • in 1823 Nicholas Biddle became the bank's president

1861-Civil war (Printing currency):

  • The Confederate dollar was first issued into circulation in April 1861, when the Confederacy was only two months old

1863-National Banking Act:

  • Established a system of national banks for banks
  • Passed by Congress during the Civil War
  • amended to also require the taxation of state currencies, but not of national bank notes

1930's-Great Depression (Banking wise):

  • Immediate result of bank closures was the contraction of the money supply
  • Purchasing power of consumers was sharply reduced
  • By the end of 1932, more than 13 million American workers were unemployed

1933-Glass-Steagall Banking Act:

  • Congress saw the need for substantial reform of the banking system
  • Passed within days of President Franklin Roosevelt taking office
  • On June 16, 1933, President Roosevelt signed the bill into law

1970's-Banking Crisis:

  • New York City was experiencing a severe cash shortage
  • Carey warned that serious retrenchment might mean the collapse of civil peace
  • The city would have to solve its problems on its own
  • Throughout the rest of the year, New York would flirt with default on its massive loans, scrambling to patch together one plan after another, each intended to save the city from declaring bankruptcy while cutting back on the social and municipal services it provided

1982-Crisis of 1982:

  • Congress allows S&L banks to make high risk loans and investments
  • Investments went bad
  • Banks failed
  • Federal government had to give investors their money back
  • Federal government debt: $200 billion
  • The FDIC took over the S&L

1999-Gramm-Leach-Bliley Act:

  • Allows banks to have more control over banking, insurance and securities
  • Cons: less competition, may form a universal bank; may lead to more sharing of information (reduction of privacy)