My Financial Timeline
Get ready for a lot or Money Things!!
1791 Bank of the United States
Second Bank of the US
The First Bank of the United States had been established by Congress at the urging of Alexander Hamilton in 1791. Despite its generally successful operation it was defeated in a renewal attempt in 1811, on account of political considerations. The War of 1812, however, demonstrated the need for a national bank and plans were formulated in 1814 by James J. Dallas, secretary of the treasury. Dallas' suggestions were watered down until in the end, the proposal was viewed as too weak and was rejected. President James Monroe then sought a stronger proposal, and Dallas provided one to John C. Calhoun, chairman of the House committee on the currency.
When President Abraham Lincoln assumed office, he understood the importance of money for the war effort. With this in mind, Lincoln appointed Salmon P. Chase as Secretary of the Treasury. As Secretary, Chase alone was authorized to act on all matters pertaining to the country’s finances. Chase, like almost everyone at the time, underestimated the duration and cost of the war. Within a few months it was clear that the costs of the war would run far beyond the government's limited income from tariffs and excises.
1863 National Banking Act
After the expiration of the Second Bank of the United States in 1836, the control of banking regimes devolved mostly to the states. Different states adopted policies including a total ban on banking (as in Wisconsin), a single state-chartered bank (as in Indiana and Illinois), limited chartering of banks (as in Ohio), and free entry (as in New York). While the relative success of New York's "free banking" laws led a number of states to also adopt a free-entry banking regime, the system remained poorly integrated across state lines. Though all banknotes were uniformly denominated in dollars, notes would often circulate at a steep discount in states beyond their issue.
1913 Federal Reserve Act
The Federal Reserve Act created a national currency and a monetary system that could respond effectively to the stresses in the banking system and create a stable financial system. With the goal of creating a national monetary system and financial stability, the Federal Reserve Act also provided many other functions and financial services for the economy, such as check clearing and collection for all members of the Federal Reserve.
1930’s Great Depression
As the economic depression deepened in the early 30s, and as farmers had less and less money to spend in town, banks began to fail at alarming rates. During the 20s, there was an average of 70 banks failing each year nationally. After the crash during the first 10 months of 1930, 744 banks failed – 10 times as many. In all, 9,000 banks failed during the decade of the 30s. It's estimated that 4,000 banks failed during the one year of 1933 alone. By 1933, depositors saw $140 billion disappear through bank failures.
Glass-Steagall Banking Act
The term Glass–Steagall Act usually refers to four provisions of the U.S. Banking Act of 1933 that limited securities, activities, and affiliations within commercial banks and securities firms. Congressional efforts to "repeal the Glass–Steagall Act" referred to those four provisions (and then usually to only the two provisions that restricted affiliations between commercial banks and securities firms. Those efforts culminated in the 1999 Gramm Leach Bliley Act (GLBA), which repealed the two provisions restricting affiliations between banks and securities firms.