What did the Federal Reserve Act, signed into law in 1913 by President Wilson, accomplish?
2 Answers
It led to the establishment of the Federal Reserve system which controls the money supply of the United States.
Explanation:
In 1907 a massive financial crisis swept through the United States. President Roosevelt appointed a commission to investigate and find solutions. Nelson Aldrich was appointed at the head and on the 22th of November on Jekyll Island off the coast of Georgia the Federal Reserve system was conceptualized.
The Federal system was praised by keynesians who favor state intervention in the economy. Critics of the federal reserve system claim that it is privately-owned by unknown shareholders. Such scholars are Ron Paul or Murray Rothbard. They claim that this system is owned by oligarchs who control the money supply for their own interests.
According to Alan Greenspan(former chairman of the FED) it was characterized by the fact that "no government agency can over-rule the decision that we take" and Ron Paul "there is no coincidence that the century of war was the century of central banking".
The FED was accused by both Milton Friedman and Friedrich Hayek to be responsible of the 1929 crisis for opposite reasons. Friedman claimed that it had not increased the money supply when it should have after the crisis whereas Hayek blamed it for having massively created too much money in the early twenties.
This documentary explains the History of the Fed
enter link description here
You can read this booksfor more infromation:
http://arcticbeacon.com/books/Eustace_Mullins-SECRETS_of_the_Federal_Reserve_Bank.pdf
The Federal Reserve Act of 1913 established a central bank which now controls the flow of money and interests rates in the US.
Explanation:
The Establishment of the Federal Reserve Act made the US dollar the only legal currency in the United States. (except for the bit coins ) Previously local banks and states could print there t money.
The Federal Reserve Act created a central bank that controls all the other banks in the United States. This central bank operates in connection with the central federal government but not under the direct control of the government. The government appoints the seven governors that control the Central Bank. ( There are only four present members of the seven man board all appointed in 2014 by President Obama) This governors do not have to get approval from either the president or congress for their actions.
One effect of the Federal Reserve Act was to increase the power of the federal government over both states and individuals. In return individuals got protection from the failure of local banks. The Federal Reserve Banks guarantees individual deposits of up to $ 100,000.
The results of the Central Federal Reserve Banks in controlling the economy are mixed. The goal of the act was to create economic stability. The Great depression and other periods of both depression and inflation indicate that the Federal Reserve has not been successful.
