The Federal Reserve

Powerful Essays
Every large economy and most small economies have central banks. Some of the better known central banks are the European Central Bank, the Bank of England, and the Bank of China. The Federal Reserve, well-known as The Fed is the U.S. Central Bank. A central bank is an organization responsible for overseeing the monetary system of a nation. Conspiracy theories describe the Fed as men in top hats and black suits, secretly meeting in dark smoke filled rooms colluding about how to use the American banking system as their private banking cartel to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government by perpetually expanding debt. These men of great wealth, political power and social influences have come together to control the world. What is the Fed, why was it created, and what is its purpose?

Before American Independence, the central bank of the colonies was the Bank of England. Some Founding Fathers were strongly opposed to the central banking system which many believed led directly to the American War of Independence. However, eight years after the Revolutionary War, the U.S. Congress at the suggestion of the Secretary of the Treasury Alexander Hamilton, established the First Bank of the United States. The bank was given a twenty year charter, but many Americans were uncomfortable with the idea of a large and powerful central bank. Thomas Jefferson saw it as an engine for speculation, financial manipulation, and corruption. Therefore, Congress refused to renew it in 1811.

In 1816, Congress once again created a central bank, in response to the inflation that resulted from the increase in banknotes printed to pay off the debt produced by the War of 1812. Afte...

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... its net income to the Treasury each year. Since its founding in 1913, the Federal Reserve System evolved to meet the needs of our changing financial system and growing economy. Although bankers run the twelve banks, these banks are still supervised by the Federal Reserve Board whose members are appointed by the President to represent public interests.

Works Cited

FederalReserve. n.d. 21-26 April 2014. .

Griffin, G. Edward. The creature from Jekyll Island : a second look at the Federal Reserve. Westlake Village: American Media, 1998.

Marc D.Weidenmier, and Kerry A. Odell. "Real Shock, Monetary Aftershock:The 1906 San Francisco Earthquake and the Panic of 1907." The National Bureau of Economic Research (2002): 46.

Taylor, Timothy. The Instant Economist. New York: The Penguin Group, 2012.
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