this history of the federal reserve

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Running Head : FEDERAL RESERVE

Essay on the History of the Federal Reserve

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Essay on the History of the Federal Reserve

The Federal Reserve System , also called the Federal Reserve or informally for short , The Fed , is the centralized quasi-government banking system of the United States

The primary aim of the Federal Reserve is to provide the United States financial and economic structure with greater security , elasticity and stability . The Federal system is responsible for the regulation of the nation 's money supply to

effect the general stability of the economy in terms of employment , prices and production

While it purports to be a government entity , with its Board of Governors being an independent government agency and each Board member being appointed by the President , the body is de facto and legally a "private corporation . The Federal Reserve is partly owned by the member banks that are generally privately owned . The private character of the institution has been established beyond any doubt with the 1982 court ruling that Banks under the Federal Reserve System are "independent privately owned and locally controlled corporations " such that the Federal Reserve cannot be considered to be a federal agency . Likewise records in the U .S . congress also bear out the admission or claims by political officials that the American government can buy back at any time the Federal Reserve System for 450 million

The history of the Federal Reserve System can be traced back to the days of the American Revolution when the Continental Congress issued the "continentals , the first money of the incipient nation . In due time however , the American forefathers came to regard the flat currency notes as "utterly worthless " because their issuance in large quantities brought about inflation

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From then on , the history of the Federal Reserve has been marred , if not marked , by persisting , perhaps sporadic , opposition to this private character of the institution

The earliest precursor of the Federal Reserve is the First Bank of the United States , established by Treasury Secretary Alexander Hamilton , was aimed at the able management of government money and the regulation of the country 's credit . Congress in 1791 gave the first Central bank a 20-year charter , allowing it to act as the fiscal agent of the United States government and to manage the revenues , securities and debts of the country . The First Bank of the United States represented the country 's first attempt at central banking

The re-chartering of the First Bank of the United States was , however narrowly prevented by Congress in 1811 , in part because of opposition to its partly private interests . Such apprehensions are obviously well founded given its nature of being the nation 's largest corporation and dominated at that by big bankers and businesses . The bulk of the opposition was from agrarian-minded citizens who disliked the idea of having a Central bank that was both powerful and large . It is worth noting that it was Vice-President George Clinton 's...