How Did Donald Kirk Create An Independent Accounting Standard Setting System?

In the early days preceding the first fireside chat on 12, March 1933, the American people’s confidence in the banking system was at an all-time low. As the confidence in the banking system began to erode, people began to make runs and withdrawing all their money leaving the banks empty and foreclosing many of the smaller rural banks. Banks continued to close despite the government's best efforts, as a result, President Franklin D. Roosevelt’s (FDR) instituted the banking holiday on 6 March 1933: closing all the banks preventing people from withdrawing all their assets, foreclosing, even more, banks and making the situation worse. When the banks closed FDR started to initiate a plan to inform the American people about how the banks worked, what they do with the money, and how he and the government are going to solve the issue.

The Articles of Confederation were drafted sometime between 1776 and 1777 by the Continental Congress. Prior to the Articles of Confederation the Continental Congress “assumed a number of rights and responsibilities, such as creating the Continental Army, printing money, managing trade, and dealing with debt” (Shultz, 2014, p. 119). They had done all of this without the authority of the people or sovereign power, this is why the Articles of Confederation were created. The Articles of Confederation were presented to the states for ratification but only 8 states would ratify it within the first year. It would take until 1781 to get all 13 states to ratify it, which is what it took to before the Articles of Confederation could take effect.

Farmers living in newly settled areas in central and Western Massachusetts struggled with high debt and heavy taxation as they were trying to start farms in the 1780s. Other state legislatures during this time responded to similar economic crisis by passing pro-debtor laws. These were laws that forgave debt and printed more paper money (Shays' Rebellion). However, in Massachusetts, this was not the case. Instead, the government seized the farms, and some farmers who couldn’t pay their debt were thrown into prison. The settlers were shocked at how the government was handling this situation, and decided to take that matter into their own hands. Shays’ Rebellion was the first armed rebellion in the post-Revolutionary United States, where settlers called for special meetings where they agreed on coordinated protests.

After the revolutionary war, the colonial people of the United States were in severe debt. According to the textbook Enduring Vision by Paul S. Boyer, et al. “The Massachusetts legislature, dominated by commercially minded elites, voted early in 1786 to pay off its revolutionary debt in three years” (Boyer, et al.). Many of the people, unable to pay within this timeframe were asked to pay their debts in “hard currency” (Boyer, et al.). With these high stakes, and with the inability to pay their debts, revolts broke out in protest of the common tax hikes of the period.

In the 1930s, America faced a large economic downfall. Citizens thought they were financially stable until they all unfortunately got a reality check when everyone began losing money, jobs and homes. All of the causes can be seen as a chain reaction. Credit was definitely a negative impact on the economy. People would buy things and pay for the items in the future. Consequently, this method of purchasing goods became a huge problem because some buyers were unable to repay the lender, putting them in debt and hurting businesses. Money was not being used responsibly during this time period leading to the Stock Market Crash in 1929. There were so many events and foolish actions that people consider as causes of the worst economic downturn. Speculation,

On December 23, 1913, the United States of America created the Federal Reserve System. The Federal Reserve System is the central banking system of the U.S. The Federal Reserve’s headquarters is located in Washington D.C. Interesting fact, the United States had excellent economic growth when there was actually no Federal Reserve or central banking system (ETF Daily News). The Federal Reserve System will be evaluated by its history, what it does, and problems it has faced.

Many revolutions had occurred during the 1700’s. More specifically, The French Revolution. The French Revolution was a failure due to France ridding itself of the monarchy to become a republic, but instead, it started a reign, created a financial crisis, and the arrival of Napoleon Bonaparte further worsened things.

President Franklin Delano Roosevelt led the United States through some of its darkest times, using his own character to help the country overcome its struggles. In 1929, the market crash drove the United States into a decade-long craze, shaping America as a place of poverty and hardship for ordinary citizens. Throughout the early 1930’s, the United States struggled with the Great Depression and the disconnect it created between the government and the American population. Thankfully, in 1932, Franklin Delano Roosevelt took office. Herbert Hoover, the previous president, possessed a disbelief in the government's involvement in aiding the country in their financial struggles. His refusal to get involved in the economic issues of the country revoked

Amidst the troubles of the Great Depression, rumors of bank corruption and closure provoked investors to pull their money out of American banks. Of course, the banks could not keep up, and fueling even more panic and withdrawals. To curb this vicious cycle, president Franklin Delano Roosevelt established an indeterminate bank closure, a “holiday” to allow the banking crisis to stabilize. However, for the plan to work, he needed the support of the American public. And so, in his first “fireside chat,” as journalists would later dub it, Roosevelt reassured the public and informed them of his plan to repair the banking situation. Using logos to reason out his decisions, ethos to show his authority, and pathos to gain support from the American people, Roosevelt lays out the situation and gives his plan for the future.

After the Progressive Era ended which allowed many middle-class Americans to prosper, Americans faced economic turmoil when the Great Depression hit in the 1930’s. Many suffered hardships like losing their jobs or having their businesses shut down which was very difficult. Despite the challenges, the United States has managed to become one of the world’s most leading economical nations in the world, closely competing with eastern nations like Japan and China. But what induced this economic boost? Was it influenced by the stress of war? Did the mass distribution of credit play a part in this success? How did we get to being a nation that did not lend money to giving out credit to consumers? We will discuss and analyze these questions answered in Louis Hyman’s “Debtor Nation: The History of America in Red Ink.”

Economic issues are not uncommon in America. The panic of 1837, Depression during the 1920’s, stock market crash in 1929, $17 trillion debt America is in today, and a multitude of other issues are all proof that America is perhaps less financially stable than it seems to be. The Bank War is one of the many puzzle pieces that fit together in the intricate financial history of the United States. Linking Jackson’s role in the Bank War directly to the Panic of 1837 would not only be inaccurate, but would deny the complexity of other causes that were contributing factors. A further analysis of the sequence of events revolving around the Bank War depict that Jackson is only one of many other causes that led to the Panic of 1837.

The Great Depression was a period of severe economic recession that flogged the American people. It was primarily caused by the overproduction of goods and the massive unequal distribution of wealth. America during the years leading up to the depression had an abundance of production coming off the recent World War, but since wages hadn’t increased, no one was able to buy the products. Also, by 1927, nearly forty percent of all the nations wealth was controlled by the top five percent, and this caused an extremely unstable economy. Similarly, the failure of the Hawley-Smoot Tariff and the closing of banks were both minor causes of the Great Depression. Instead of assisting the farmers, the Hawley-Smoot Tariff, signed by Herbert Hoover, actually

The Great Depression affected everyone rich and poor, with 8.02 million americans unemployed by 1931. With home foreclosures and no food to put the dinner table and no one to turn to for help or answers. All anyone could was hope and pray for a job even if that meant leaving your family to earn money to send back home. Making it the longest and deepest most widespread depression of the 20th century. The Great Depression had a major impact on the u.s. Economy and lifestyle of americans in the 1930s because of the stock market crash, what the banks did wrong and daily struggle.

When was the start of the recent financial crises? Fitzpatrick IV and Thompson (2011) asserted that “many observers point to the summer of 2007 as the starting date for the financial crisis that would bring down most of the U.S. investment banking industry” (p. 1). However, there are many conditions that led up to the crisis, including housing policies and interest rates. Besides banks, government, homebuyers, and rating agencies had a role in the financial crisis, which led to the federal government actions to pass the Dodd-Frank Act to solve and avoid another crisis in the future.

The biggest enemy to the end of the financial crisis and the beginning of an economic recovery is Treasury Secretary Henry Paulson himself. Lets forget for a minute that the decision by Paulson and Bernanke to let Lehman Brothers fail was the precipitating event leading to credit markets freezing up and the first round of financial panic. Since then, the two have been working diligently to correct this collosal mistake. But separating actions from words, we see that words are in fact much more potent.