Federal Reserve Act of 1913

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Federal Reserve Act of 1913

Federal legislation that established the Federal Reserve System.

Federal Reserve Act of 1913

Legislation in the United States that created the Federal Reserve System. Prior to the Act's adoption, the United States had been without a central bank since the charter of the Second Bank of the United States expired in 1836. This led to a number of panics, including several in the first decade of the 20th century, which led many to believe that a central bank ought to control American monetary policy.

The Act mandated the creation of between eight and 12 Federal Reserve banks 12 ultimately were founded to operate under the guidance of a Federal Reserve Board, whose seven members were appointed by the President. The Act gave the Federal Reserve System the authority to print money, a controversial measure at the time. It further required that all federally-chartered banks belong to the System and purchase a certain amount of stock in the Federal Reserve bank in charge of their particular regions. The Federal Reserve System was ordered to set the monetary policy of the United States, which it does by printing money, selling Treasury securities, and adjusting the discount rate and the fed funds rate. While the Federal Reserve Act has been amended more than 200 times since 1913, it remains the most significant law governing American finances.
References in periodicals archive ?
A body created by the Federal Reserve Act, The Federal Advisory Council consists of one member - generally from the commercial banking industry - from each of the 12 Reserve Bank Districts.
Willis was a firm believer in the real bills doctrine and was instrumental in writing it into the Federal Reserve Act. As he wrote in 1923, "Strictly and carefully framed, the original provisions of the act were intended to prevent the issue of notes save as the result of the discount of actual bona fide commercial paper" (Willis 1923: 1521).
The Federal Reserve Act says the president can remove Fed governors "for cause," but that provision does not apply to the chairman, according to the Journal.
The Fed had been granted these powers in 1932 through passage of the Emergency Relief and Construction Act, which added Section 13(3) to the Federal Reserve Act. Section 13(3) as amended gave Federal Reserve Banks the authority to "discount" for any "individual, partnership, or corporation" notes "indorsed or otherwise secured to the satisfaction of the Federal Reserve Bank[s]," (1) subject to a finding by the Federal Reserve Board (now the Board of Governors of the Federal Reserve System) of "unusual and exigent circumstances" (2)
In contrast, Binder and Spindel spend much of their time diving into the minutiae of the politics of the Fed, as revealed through the recitation of vote counts on many of the 19 times that Congress chose to revisit the Federal Reserve Act after its enactment in 1913 through the Dodd-Frank Act in 2010.
(6) Prior to the Dodd-Frank reforms, the Fed enjoyed considerable leeway during a crisis because of the (in)famous "unusual exigent circumstances" clause in the Federal Reserve Act (Sect.
The Federal Reserve Act was intended to solve these problems by creating a new currency--Federal Reserve notes--supplied by regional Reserve Banks through lending to their member banks.
HereEs my question never asked about the Federal Reserve Act of 1913: How much sense does it make for us to give seven nonelected people life-and-death control over our economy and hence our lives?
The Board also approved the applications under section 18(c) of the Federal Deposit Insurance Act and section 9 of the Federal Reserve Act by Sandy Spring Bank, Olney, Maryland, to merge with WashingtonFirst Bank and to establish and operate branches at locations of the main office and branches of WashingtonFirst Bank.
Instead of addressing the root causes of these crises, the Federal Reserve Act reinforced some of them, while dramatically increasing the potential for politically-motivated abuse of monetary policy.
The FAST Act, which amended Section 7(a) of the Federal Reserve Act (FRA), requires that any aggregate Reserve Bank capital surplus in excess of $10 billion be transferred to the U.S.
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