The Federal Reserve Act of 1913 – The Financial Heart Of AmericaThe Federal Reserve Act of 1913 – The Financial Heart Of America
The Federal Reserve Act is one of the most important pieces of legislative history ever to have been passed through US Congress. Ratified and passed into being on December 23, 1913, it was arguably Woodrow Wilson’s greatest success during his term as President. In the eighty years before the Federal Reserve Act was passed, the United States had no central bank. President Andrew Jackson had prevented the renewal of the Second Bank of the United States after its original contract had expired in 1832. At that point in history, there was a certain level of pressure on the government to form a central bank, and Wilson’s government was happy to oblige.
The Federal Reserve Act was one of the turning points of modern day America. At the time, though, the majority of people welcomed it. They thought it would help stabilize the country, which directly had an impact on their savings. Of course, the same fears would surface just sixteen years later.
There were various factors that contributed to the public pressure that forced Wilson’s hand. There were a number of minor financial crises from the turn of the century to the date on which the treaty was ratified. The worst one during that time was a taste of things to come in the 1929 Wall Street Crash. In 1907, the stock market fell 50% on the previous year’s high and the whole country went into a recession as a result. The Panic was over by February 1908, but it gave he public and the various banks a sense of urgency. If there was a central system then the financial health of the country could be ensured, and the whole currency of the United States could be overhauled.
Twelve regional Federal Reserves were established in the Act itself and are still up and running today, as was a single currency for every single state to participate in. All charted banks had to buy in to the Federal Reserve System, and this was strengthened just after the Depression. However, the Act itself has caused a little controversy through the years. For example, it did not assign jurisdictional powers to any of its governing committees or Congress, and that has caused a lot of problems. Congress has occasionally taken it upon themselves to order production of coins and notes, but there is nothing to stop them if that is what they decide to do.
There has even been suggestions emanating from the press that the rich sections of American society have the power to influence the Federal Reserve System to suit there own needs. Although the reserve has strongly denied this, speculation will continue to rage on as a result of various decisions that it has made in the past, like the fact that they may have made the Depression worse by refusing to compensate individuals for their financial loss and holding all loans during the early years.
Despite that, the Federal Reserve System has come in handy recently with an erratic and unpredictable global economy, especially with the dollar at an all time low. With the system in place, the American economy will never reach the lows of 1929 and the ensuing Depression again and that thought has got to comfort all American, and indeed individuals in other countries around the world. If one country’s economy collapses then the global economy will dip without a doubt. This is the main reason why the Federal Reserve was a great idea in terms of the modern day. After all, when any number of countries are waiting for America to weaken, for whatever reason, you can afford to take any chances! | |
Nature of Money - Debt and the Banking SystemThe basic nature of money has gone through tremendous changes and our entire banking system is based almost completely on debt, and NOT on assets. Tthe goldsmith who made gold that served as the currency for the population, he went on to issue paper certificates that represented the money stored in his vault, and over time what we know as a bank came into existence.
Privately issued bank credit is legally convertible to govennment issued funds. In other words, banks can literally create money without having actual money to back it up. Money is created as debt. With no debt, there is no money. The whole system is dependent on debt. It is a fallacy to think that if all debts were paid, we would be better off. This is not true. We are dependent on debt. Individuals, corporations and government are all in debt to banks. Many argue the system itself needs to be replaced, because there is going to be a limit to possible debt, and that we need a more solid basis for out money system.
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Mortgage Professionals Helping Borrowers in TroubleWith the rise in forclosures, drop in home values, and adjustable rate mortages adjusting upwards, many consumers are finding themselves in trouble. As one of the moderators on the mortgage forum, I am finding lots of people asking for help and advice lately. Some people have found themselves in over their heads, and some even feel they were mislead into making false statements about their income or otherwise getting into mortgages they should not have taken. The number of inquiries consumers are making is up according to one of our moderators who is also a moderator. He says there are several key questions that the consumer must consider with their loan officer:
By considering these questions, it will make it much easier for the consumer and loan officer to find the best solution, and be more likely to bring about a better outcome. If you have any question about mortgages, please feel free to drop by the mortgage forum anytime, and ask your question. | |
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