Module 13 Lesson 2
Civics & Economics
1791 Bank of the US
The First Bank of the US was chartered in 1791 and ran until it's failure to get it's charter renewed by Congress in 1811. The bank had great liquidity, in comparison to many banks. It also provided approximately 20% of the US currency ($5 Million) when it was operating.
1816 Second Bank of the US
The Second Bank of the US was chartered with the same responsibilities and powers as the First Bank of the US. This second attempt was plagued with problems including fraud and poor management. There were event attempts to have it shutdown as being unconstitutional.
Civil War (printing currency)
1863 National Banking Act
1913 Federal Reserve Act
1930’s Great Depression (regarding banking)
The decrease in available money due to the depression triggered an alarming number of banks to fail. It is estimated that four-thousand banks failed in 1933. Things were so bad that President Franklin Delano Roosevelt declared a national “bank holiday”. This holiday allowed the banks to close for 3 days, to let things settle.
Glass-Steagall Banking Act
Also known as the Banking Act of 1933, was signed into law on June 16, 1933 to strengthen the banking systems. It separated commercial banks from securities (investment) banks. Rep. Steagall agreed to support the Act after an amendment was added to allow bank deposit insurance.
1970’s (regarding banking)
1982 (regarding banking)
The economy was going through a recession and banks were going through deregulation. This was allowing banks to increase their lending, and the deposit insurance limits were also increased from $40,000 to $100,000 during this period. In July 1982, congress enacted the Garn-St. Germain Depository Institutions Act of 1982. This act allowed banks to begin offering money market accounts, and provided adjustable-rate mortgage loans.