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Federal Reserve Act Dbq

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In 1863 a National Bank Act was created. It was created in order to design a national banking system, send out war loans, and establish a national currency that was available to all the people. Congress believed that this new bank system would be a smart decision since it would help resolve the financial crisis during the early events of the Civil War. The South struggled with finding financial support throughout the war. Tax programs were recently not put into effect, leaving them lost. Toward the end of 1861 using specie payments were not allowed, which meant that paying in gold or silver was no longer acceptable. That left people having to pay only in paper currency. To add to the matter, the Government issued the Legal Tender Act after payment in gold or coins was banned. This caused banknotes to count for most of the currency. The National Bank Act brought financial stability to the nation, but failed to solve the nation’s financial issues. When the National Bank was official and running, it caused state banks to struggle with business. When $300 million in national currency was issued, it was sent mostly to the East. This left …show more content…

This act was created in hope of establishing a form of economic stability establishing the Central Bank. The Federal Reserve Act has been identified as one of the most influential laws in relation to the United State’s financial system. This act called for eight to twelve regional Reserve Banks that would be owned by commercial banks and their actions would be monitored by the President. Once that was accomplished, the Federal Reserve System would become a privately owned banking system that would be ran by the public. Bankers would run the bank, but the Federal Reserve Board would monitor their actions to make sure everything went smoothly. These banks issued Federal Reserve Notes. The Federal Reserve Act was mainly put into action because the government wanted more economic

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