1.
Boston
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Boston is the capital and most populous city of the Commonwealth of Massachusetts in the United States. Boston is also the seat of Suffolk County, although the county government was disbanded on July 1,1999. The city proper covers 48 square miles with a population of 667,137 in 2015, making it the largest city in New England. Alternately, as a Combined Statistical Area, this wider commuting region is home to some 8.1 million people, One of the oldest cities in the United States, Boston was founded on the Shawmut Peninsula in 1630 by Puritan settlers from England. It was the scene of several key events of the American Revolution, such as the Boston Massacre, the Boston Tea Party, the Battle of Bunker Hill, and the Siege of Boston. Upon U. S. independence from Great Britain, it continued to be an important port and manufacturing hub as well as a center for education, through land reclamation and municipal annexation, Boston has expanded beyond the original peninsula. Its rich history attracts many tourists, with Faneuil Hall alone drawing over 20 million visitors per year, Bostons many firsts include the United States first public school, Boston Latin School, first subway system, the Tremont Street Subway, and first public park, Boston Common. Bostons economic base also includes finance, professional and business services, biotechnology, information technology, the city has one of the highest costs of living in the United States as it has undergone gentrification, though it remains high on world livability rankings. Bostons early European settlers had first called the area Trimountaine but later renamed it Boston after Boston, Lincolnshire, England, the renaming on September 7,1630 was by Puritan colonists from England who had moved over from Charlestown earlier that year in quest of fresh water. Their settlement was limited to the Shawmut Peninsula, at that time surrounded by the Massachusetts Bay and Charles River. The peninsula is thought to have been inhabited as early as 5000 BC, in 1629, the Massachusetts Bay Colonys first governor John Winthrop led the signing of the Cambridge Agreement, a key founding document of the city. Puritan ethics and their focus on education influenced its early history, over the next 130 years, the city participated in four French and Indian Wars, until the British defeated the French and their Indian allies in North America. Boston was the largest town in British America until Philadelphia grew larger in the mid-18th century, Bostons harbor activity was significantly curtailed by the Embargo Act of 1807 and the War of 1812. Foreign trade returned after these hostilities, but Bostons merchants had found alternatives for their investments in the interim. Manufacturing became an important component of the economy, and the citys industrial manufacturing overtook international trade in economic importance by the mid-19th century. Boston remained one of the nations largest manufacturing centers until the early 20th century, a network of small rivers bordering the city and connecting it to the surrounding region facilitated shipment of goods and led to a proliferation of mills and factories. Later, a network of railroads furthered the regions industry. Boston was a port of the Atlantic triangular slave trade in the New England colonies
2.
Massachusetts
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It is bordered by the Atlantic Ocean to the east, the states of Connecticut and Rhode Island to the south, New Hampshire and Vermont to the north, and New York to the west. The state is named for the Massachusett tribe, which inhabited the area. The capital of Massachusetts and the most populous city in New England is Boston, over 80% of Massachusetts population lives in the Greater Boston metropolitan area, a region influential upon American history, academia, and industry. Originally dependent on agriculture, fishing and trade, Massachusetts was transformed into a manufacturing center during the Industrial Revolution, during the 20th century, Massachusetts economy shifted from manufacturing to services. Modern Massachusetts is a leader in biotechnology, engineering, higher education, finance. Plymouth was the site of the first colony in New England, founded in 1620 by the Pilgrims, in 1692, the town of Salem and surrounding areas experienced one of Americas most infamous cases of mass hysteria, the Salem witch trials. In 1777, General Henry Knox founded the Springfield Armory, which during the Industrial Revolution catalyzed numerous important technological advances, in 1786, Shays Rebellion, a populist revolt led by disaffected American Revolutionary War veterans, influenced the United States Constitutional Convention. In the 18th century, the Protestant First Great Awakening, which swept the Atlantic World, in the late 18th century, Boston became known as the Cradle of Liberty for the agitation there that led to the American Revolution. The entire Commonwealth of Massachusetts has played a commercial and cultural role in the history of the United States. Before the American Civil War, Massachusetts was a center for the abolitionist, temperance, in the late 19th century, the sports of basketball and volleyball were invented in the western Massachusetts cities of Springfield and Holyoke, respectively. Many prominent American political dynasties have hailed from the state, including the Adams, both Harvard University and the Massachusetts Institute of Technology, also in Cambridge, have been ranked among the most highly regarded academic institutions in the world. Massachusetts public school students place among the top nations in the world in academic performance, the official name of the state is the Commonwealth of Massachusetts. While this designation is part of the official name, it has no practical implications. Massachusetts has the position and powers within the United States as other states. Massachusetts was originally inhabited by tribes of the Algonquian language family such as the Wampanoag, Narragansett, Nipmuc, Pocomtuc, Mahican, and Massachusett. While cultivation of crops like squash and corn supplemented their diets, villages consisted of lodges called wigwams as well as longhouses, and tribes were led by male or female elders known as sachems. Between 1617 and 1619, smallpox killed approximately 90% of the Massachusetts Bay Native Americans, the first English settlers in Massachusetts, the Pilgrims, arrived via the Mayflower at Plymouth in 1620, and developed friendly relations with the native Wampanoag people. This was the second successful permanent English colony in the part of North America that later became the United States, the event known as the First Thanksgiving was celebrated by the Pilgrims after their first harvest in the New World which lasted for three days
3.
Banknote
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A banknote is a type of negotiable instrument known as a promissory note, made by a bank, payable to the bearer on demand. Banknotes were originally issued by banks, who were legally required to redeem the notes for legal tender when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the served by the issuing bank. Commercial banknotes have primarily been replaced by national banknotes issued by central banks, national banknotes are generally legal tender, meaning that medium of payment is allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment and this practice of backing notes with something of substance is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat, with the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values. The idea of using a durable light-weight substance as evidence of a promise to pay a bearer on demand originated in China during the Han Dynasty in 118 BC, the first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty, as merchants, during the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century by such as Marco Polo. Counterfeiting, the forgery of banknotes, is an inherent challenge in issuing currency and it is countered by anticounterfeiting measures in the printing of banknotes. Fighting the counterfeiting of banknotes and cheques has been a driver of security printing methods development in recent centuries. Paper currency first developed in the Tang Dynasty China during the 7th century, although true paper money did not appear until the 11th century, the usage of paper currency later spread throughout the Mongol Empire. European explorers like Marco Polo introduced the concept in Europe during the 13th century, napoleon issued paper banknotes in the early 1800s. Paper money originated in two forms, drafts, which are receipts for value held on account, and bills, the perception of banknotes as money has evolved over time. Originally, money was based on precious metals, Banknotes were seen as essentially an I. O. U. or promissory note, a promise to pay someone in precious metal on presentation. With the gradual removal of precious metals from the system, banknotes evolved to represent credit money. Notes or bills were referred to in 18th century novels and were often a key part of the plot such as a note drawn by Lord X for £100 which becomes due in 3 months time. Its roots were in merchant receipts of deposit during the Tang Dynasty, as merchants, before the use of paper, the Chinese used coins that were circular, with a rectangular hole in the middle
4.
Murray Rothbard
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Rothbard was the founder and leading theoretician of anarcho-capitalism, a staunch advocate of historical revisionism, and a central figure in the twentieth-century American libertarian movement. He wrote over twenty books on theory, revisionist history, economics. He called fractional-reserve banking a form of fraud and opposed central banking and he categorically opposed all military, political, and economic interventionism in the affairs of other nations. According to his protégé Hans-Hermann Hoppe, There would be no anarcho-capitalist movement to speak of without Rothbard, Rothbard was a heterodox political economist. Economist Jeffrey Herbener, who calls Rothbard his friend and intellectual mentor, Rothbard rejected mainstream economic methodologies and instead embraced the praxeology of his most important intellectual precursor, Ludwig von Mises. To promote his economic and political ideas, Rothbard joined Llewellyn H. Lew Rockwell, Jr. Murray Rothbards parents were David and Rae Rothbard, Jewish immigrants to the U. S. from Poland and Russia, respectively. Rothbard was born in the Bronx, but the family moved to an apartment on the Upper West Side of Manhattan, where he attended Birch Wathen, a private school on the Upper East Side. Rothbard later stated that he much preferred Birch Wathen to the debasing, Rothbard wrote of having grown up as a right-winger among friends and neighbors who were communists or fellow-travelers. Ll socialism seemed to me monstrously coercive and abhorrent and he attended Columbia University, where he received a Bachelor of Arts degree in mathematics in 1945 and, eleven years later, his PhD in economics in 1956. The delay in receiving his PhD was due in part to conflict with his advisor, Joseph Dorfman, Burns was a longtime friend of the Rothbard family and their neighbor at their Manhattan apartment building. It was only after Burns went on leave from the Columbia faculty to head President Eisenhowers Council of Economic Advisors that Rothbards thesis was accepted and he received his doctorate. Rothbard later stated that all of his students there were extreme leftists. Rothbard attracted the attention of the William Volker Fund, a group that provided financial backing to promote various right-wing ideologies in the 1950s, for ten years, Rothbard was paid a retainer by the Volker Fund, which designated him a senior analyst. As Rothbard continued his work, he enlarged the project, the result was Rothbards book Man, Economy, and State, published in 1962. Upon its publication, Mises praised Rothbards work effusively, in 1953, in New York City, he married JoAnn Schumacher, whom he called Joey. JoAnn was his editor and an adviser, as well as hostess of his Rothbard Salon. They enjoyed a loving marriage, and Rothbard often called her the indispensable framework behind his life, according to Joey, patronage from the Volker Fund allowed Rothbard to work from home as a freelance theorist and pundit for the first fifteen years of their marriage. The Fund collapsed in 1962, leading Rothbard to seek employment from various New York academic institutions and he was offered a part-time position teaching economics to the engineering students of Brooklyn Polytechnic Institute in 1966, at age 40
5.
Federal Reserve System
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The Federal Reserve System is the central banking system of the United States. Over the years, events such as the Great Depression in the 1930s, the U. S. Congress established three key objectives for monetary policy in the Federal Reserve Act, maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserves dual mandate. S, the Fed conducts research into the economy and releases numerous publications, such as the Beige Book. S. member banks, and various advisory councils. The federal government sets the salaries of the seven governors. Nationally chartered commercial banks are required to hold stock in the Federal Reserve Bank of their region, thus, the Federal Reserve System has both private and public components to serve the interests of the public and private banks. The structure is considered unique among central banks and it is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, prints the currency used. The U. S. Government receives all the annual profits, after a statutory dividend of 6% on member banks capital investment is paid. In 2015, the Federal Reserve made a profit of $100.2 billion, the primary motivation for creating the Federal Reserve System was to address banking panics. Before the founding of the Federal Reserve System, the United States underwent several financial crises, a particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system. S. S and this practice is called fractional-reserve banking. As a result, banks usually invest the majority of the funds received from depositors, on rare occasions, too many of the banks customers will withdraw their savings and the bank will need help from another institution to continue operating, this is called a bank run. Bank runs can lead to a multitude of social and economic problems, the Federal Reserve System was designed as an attempt to prevent or minimize the occurrence of bank runs, and possibly act as a lender of last resort when a bank run does occur. Many economists, following Milton Friedman, believe that the Federal Reserve inappropriately refused to lend money to banks during the bank runs of 1929. Because some banks refused to clear checks from certain others during times of economic uncertainty, to address these problems, Congress gave the Federal Reserve System the authority to establish a nationwide check-clearing system. It took over this role from the private sector clearing houses which operated during the Free Banking Era, whether public or private, through its discount window and credit operations, Reserve Banks provide liquidity to banks to meet short-term needs stemming from seasonal fluctuations in deposits or unexpected withdrawals. Longer term liquidity may also be provided in exceptional circumstances, the rate the Fed charges banks for these loans is called the discount rate. By making these loans, the Fed serves as a buffer against unexpected day-to-day fluctuations in reserve demand and this contributes to the effective functioning of the banking system, alleviates pressure in the reserves market and reduces the extent of unexpected movements in the interest rates. For example, on September 16,2008, the Federal Reserve Board authorized an $85 billion loan to stave off the bankruptcy of international insurance giant American International Group
6.
Minneapolis
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Minneapolis is the county seat of Hennepin County, and the larger of the Twin Cities, the 16th-largest metropolitan area in the United States. As of 2015, Minneapolis is the largest city in the state of Minnesota, Minneapolis and Saint Paul anchor the second-largest economic center in the Midwest, after Chicago. Minneapolis lies on both banks of the Mississippi River, just north of the confluence with the Minnesota River, and adjoins Saint Paul. It was once the worlds flour milling capital and a hub for timber, the city and surrounding region is the primary business center between Chicago and Seattle, with Minneapolis proper containing Americas fifth-highest concentration of Fortune 500 companies. As an integral link to the economy, Minneapolis is categorized as a global city. Noted for its music and performing arts scenes, Minneapolis is home to both the award-winning Guthrie Theater and the historic First Avenue nightclub. The name Minneapolis is attributed to Charles Hoag, the citys first schoolteacher, who combined mni, a Dakota Sioux word for water, and polis, Dakota Sioux had long been the regions sole residents when French explorers arrived around 1680. For a time relations were based on fur trading, gradually more European-American settlers arrived, competing for game and other resources with the Dakota. In the early 19th century, the United States acquired this territory from France, fort Snelling was built in 1819 by the United States Army, and it attracted traders, settlers and merchants, spurring growth in the area. The United States government pressed the Mdewakanton band of the Dakota to sell their land, the Minnesota Territorial Legislature authorized present-day Minneapolis as a town in 1856 on the Mississippis west bank. Minneapolis incorporated as a city in 1867, the rail service began between Minneapolis and Chicago. It later joined with the city of St. Anthony in 1872. Minneapolis developed around Saint Anthony Falls, the highest waterfall on the Mississippi River, forests in northern Minnesota were a valuable resource for the lumber industry, which operated seventeen sawmills on power from the waterfall. By 1871, the west river bank had twenty-three businesses, including mills, woolen mills, iron works, a railroad machine shop, and mills for cotton, paper, sashes. Due to the hazards of milling, six local sources of artificial limbs were competing in the prosthetics business by the 1890s. The farmers of the Great Plains grew grain that was shipped by rail to the citys thirty-four flour mills, a father of modern milling in America and founder of what became General Mills, Cadwallader C. Some ideas were developed by William Dixon Gray and some acquired through industrial espionage from the Hungarians by William de la Barre, pillsbury Company across the river were barely a step behind, hiring Washburn employees to immediately use the new methods. The hard red spring wheat that grows in Minnesota became valuable, not until later did consumers discover the value in the bran that Minneapolis
7.
Industrial Revolution
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The Industrial Revolution was the transition to new manufacturing processes in the period from about 1760 to sometime between 1820 and 1840. The Industrial Revolution began in Great Britain and most of the important technological innovations were British, aided by these legal and cultural foundations, an entrepreneurial spirit and consumer revolution drove industrialisation in Britain, which would be emulated in countries around the world. A change in marrying patterns to getting married later made able to accumulate more human capital during their youth. The Industrial Revolution marks a turning point in history, almost every aspect of daily life was influenced in some way. In particular, average income and population began to exhibit unprecedented sustained growth, mechanised textile production spread from Great Britain to continental Europe in the early 19th century, with important centres of textiles, iron and coal emerging in Belgium, and later in France. Since then industrialisation has spread throughout much of the world, the precise start and end of the Industrial Revolution is still debated among historians, as is the pace of economic and social changes. Economic historians are in agreement that the onset of the Industrial Revolution is the most important event in the history of humanity since the domestication of animals and plants. The term Industrial Revolution applied to change was becoming more common by the late 1830s. Friedrich Engels in The Condition of the Working Class in England in 1844 spoke of an industrial revolution, however, although Engels wrote in the 1840s, his book was not translated into English until the late 1800s, and his expression did not enter everyday language until then. Credit for popularising the term may be given to Arnold Toynbee, some historians, such as John Clapham and Nicholas Crafts, have argued that the economic and social changes occurred gradually and the term revolution is a misnomer. This is still a subject of debate among some historians, the commencement of the Industrial Revolution is closely linked to a small number of innovations, beginning in the second half of the 18th century. By the 1830s the following gains had been made in important technologies, Textiles – mechanised cotton spinning powered by steam or water greatly increased the output of a worker, the power loom increased the output of a worker by a factor of over 40. The cotton gin increased productivity of removing seed from cotton by a factor of 50, large gains in productivity also occurred in spinning and weaving of wool and linen, but they were not as great as in cotton. Steam power – the efficiency of steam engines increased so that they used between one-fifth and one-tenth as much fuel, the adaptation of stationary steam engines to rotary motion made them suitable for industrial uses. The high pressure engine had a power to weight ratio. Steam power underwent an expansion after 1800. Iron making – the substitution of coke for charcoal greatly lowered the fuel cost for pig iron, using coke also allowed larger blast furnaces, resulting in economies of scale. The cast iron blowing cylinder was first used in 1760 and it was later improved by making it double acting, which allowed higher furnace temperatures
8.
Chair of the Federal Reserve
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The Chair of the Board of Governors of the Federal Reserve System is the head of the central banking system of the United States. The position is colloquially as Chair of the Fed or Fed Chair. The chair is the executive officer of the Board of Governors of the Federal Reserve System. The chair is chosen by the President of the United States from among the members of the Board of Governors, a chair may be appointed for several consecutive terms. William Martin was the longest serving chair, holding the position from 1951 to 1970, the current chair is Janet Yellen, the first woman to hold the position. She began her term on February 1,2014, and previously served as the Vice-Chair from 2010 to 2014, the current term will end on or about February 1,2018. Section 203 of the Banking Act of 1935 changed the name of the Federal Reserve Board to the Board of Governors of the Federal Reserve System, the directors salaries were significantly lower and their terms of office were much shorter prior to 1935. In effect, the Federal Reserve Board members in Washington, D. C. were significantly less powerful than the presidents of the regional Federal Reserve Banks prior to 1935, in the 1935 Act, the district heads had their titles changed to President. Thus, Marriner Eccles was the first actual Chairman of the Board of Governors of the Federal Reserve Board, the others prior to 1935 were Chairman of the Board of Directors of the Federal Reserve System, with much more circumscribed power. The nominees for chair and vice-chair may be chosen by the President from among the sitting Governors for four-year terms, by law, the chair reports twice a year to Congress on the Federal Reserves monetary policy objectives. He or she also testifies before Congress on numerous other issues, the following is a list of past and present Chairs of the Board of Governors of the Federal Reserve System. A chair serves for a term after appointment, but may be reappointed for several consecutive four-year terms. As of 2014, there have been a total of fifteen Fed Chairs, history of central banking in the United States Beckhart, Benjamin Haggott. The fourth branch, the Federal Reserves unlikely rise to power, Executive Order 11110 - Amendment of Executive Order No.10289 as Amended, Relating to the Performance of Certain Functions Affecting the Department of the Treasury. Via UCSB. edu Official website Public Statements of the Chairs of the Board of Governors of the Federal Reserve System, via the St
9.
Federal Reserve Note
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Federal Reserve Notes, also United States banknotes or U. S. banknotes, are the banknotes currently used in the United States of America. Denominated in United States dollars, Federal Reserve Notes are printed by the United States Bureau of Engraving and Printing on paper made by Crane & Co. of Dalton, Federal Reserve Notes are the only type of U. S. banknote currently produced. The notes are then put into circulation by the Federal Reserve Banks, at which point they become liabilities of the Federal Reserve Banks, Federal Reserve Notes are legal tender, with the words this note is legal tender for all debts, public and private printed on each note. They have replaced United States Notes, which were issued by the Treasury Department. Federal Reserve Notes are backed by the assets of the Federal Reserve Banks and these assets are generally Treasury securities which have been purchased by the Federal Reserve through its Federal Open Market Committee in a process called debt monetizing. This monetized debt can increase the supply, either with the issuance of new Federal Reserve Notes or with the creation of debt money. This increase in the base leads to a larger increase in the money supply through fractional-reserve banking as deposits are lent. Prior to centralized banking, each bank issued its own notes. The first institution with responsibilities of a bank in the U. S. was the First Bank of the United States. Its charter was not renewed in 1811, in 1816, the Second Bank of the United States was chartered, its charter was not renewed in 1836, after President Andrew Jackson campaigned heavily for its disestablishment. From 1837 to 1862, in the Free Banking Era there was no central bank. From 1862 to 1913, a system of banks was instituted by the 1863 National Banking Act. The first printed notes were Series 1914, in 1928, cost-cutting measures were taken to reduce the note to the size it is today. The authority of the Federal Reserve Banks to issue notes comes from the Federal Reserve Act of 1913, legally, they are liabilities of the Federal Reserve Banks and obligations of the United States government. Although not issued by the Treasury Department, Federal Reserve Notes carry the signature of the Treasurer of the United States, at the time of the Federal Reserves creation, the law provided for notes to be redeemed to the Treasury in gold or lawful money. The Emergency Banking Act of 1933 removed the gold obligation and authorized the Treasury to satisfy these redemption demands with current notes of equal face value, under the Bretton Woods system, although citizens could not possess gold, the federal government continued to maintain a stable international gold price. This system ended with the Nixon Shock of 1971, present-day Federal Reserve Notes are not backed by convertibility to any specific commodity, but only by the collateral assets that Federal Reserve Banks post in order to obtain them. Series 1914 FRN were the first of two large-size issues, denominations were $5, $10, $20, $50, and $100 printed first with a red seal and then continued with a blue seal
10.
Federal Reserve Bank Note
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They had the same value as other kinds of notes of similar face value. Federal Reserve Bank Notes differ from Federal Reserve Notes in that they are backed by one of the twelve Federal Reserve Banks, rather than by all collectively. They were backed in a way to National Bank Notes, using U. S. bonds. Federal Reserve Bank Notes are no longer issued, the only U. S. banknotes still in production since 1971 are the Federal Reserve Notes, additional denominations of $1, $2, and $50 were issued in 1918. Small size Federal Reserve Bank Notes were printed as an issue in 1933 using the same paper stock as National Bank Notes. They were printed in denominations of $5 through $100, a National Bank Note has a line for the national banks presidents signature. The small size Federal Reserve Bank Note printed a bar over the label for this line since Federal Reserve Banks had governors, not presidents. The wording also was changed to add, Or by like deposit of other securities after the phrase, the twelve Federal Reserve Districts also appear on the bills as black alphabetically sequenced letters, from A to L, a system essentially followed today on the $1 and $2 bills. This emergency issue was prompted by the hoarding of cash because of the many bank failures happening at the time. This also limited the ability of the National Banks to issue notes of their own, small size Federal Reserve Bank Notes were discontinued in 1934 and no longer available from banks since 1945. As small size notes, they have brown seals and serial numbers, but while they look very similar, and both say National Currency across the top of the obverse, the issuers were not the same and they are considered to be distinctly different types of bills
11.
Second Bank of the United States
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The banks formal name, according to section 9 of its charter as passed by Congress, was The President, Directors, and Company, of the Bank of the United States. A private corporation with public duties, the bank handled all fiscal transactions for the U. S. Government, and was accountable to Congress, twenty percent of its capital was owned by the federal government, the banks single largest stockholder. Four thousand private investors held 80% of the capital, including one thousand Europeans. The bulk of the stocks were held by a few hundred wealthy Americans, in its time, the institution was the largest monied corporation in the world. The federal deposits endowed the BUS with its regulatory capacity, failing to secure recharter, the Second Bank of the United States became a private corporation in 1836, and underwent liquidation in 1841. A national alliance arose to legislate a central bank to address these needs, calhoun of South Carolina and Henry Clay of Kentucky was decisive in the successful chartering effort. The charter was signed into law by Madison on April 10,1816, opposition to the banks revival emanated from two interests. if Congress could incorporate a bank, it might emancipate a slave. Hostile to the effects of the central bank, private banks—proliferating with or without state charters—had scuttled rechartering of the first BUS in 1811. These interests played significant roles in undermining the institution during the administration of U. S. President Andrew Jackson, Government land sales in the West, fueled by European demand for agricultural products, ensured that a speculative bubble would form. When the U. S. Further, it transpired that branch directors for the Baltimore office had engaged in fraud and larceny. Resigning in January 1819, Jones was replaced by Langdon Cheves who continued the contraction in credit in an effort to stop inflation and stabilize the bank, the central banks reaction to the crisis—a clumsy expansion, then a sharp contraction of credit—indicated its weakness, not its strength. The effects were catastrophic, resulting in a recession with mass unemployment. The financial crisis raised doubts among the American public as to the efficacy of paper money, upon this widespread disaffection the anti-bank Jacksonian Democrats would mobilize opposition to the BUS in the 1830s. The national bank was in disrepute among most Americans when Nicholas Biddle. Under Biddles guidance, the BUS evolved into a banking institution that produced a strong and sound system of national credit. From 1823 to 1833, Biddle expanded credit steadily, but with restraint, albert Gallatin, former Secretary of the Treasury under Thomas Jefferson and James Madison, wrote in 1831 that the BUS was fulfilling its charter expectations. By the time of Jacksons inauguration in 1829, the bank appeared to be on solid footing. Public perceptions of the bank were generally positive
12.
Great Depression in the United States
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The Great Depression was the worst economic times in American history. Though, it was not just in the United States it was a world wide conundrum, Great Depression began in August 1929, when the United States economy first went into an economic recession. Although the country spent two months with declining Gross Domestic Product, the Gross Domestic Rate is a very important part of the United States economy. It is so important because it represents each total dollar value of all goods and it was not until the Wall Street Crash in October 1929 that the effects of a declining economy were felt, and a major worldwide economic downturn ensued. The market crash marked the beginning of a decade of unemployment, poverty, low profits, deflation, plunging farm incomes. Although its causes are uncertain and controversial, the net effect was a sudden. The economy reached bottom in the winter of 1932–33, then four years of very rapid growth until 1937. The Depression caused major changes in America. Three years into the depression, President Herbert Hoover, widely blamed for not doing enough to combat the crisis, Roosevelts economic recovery plan, the New Deal, instituted unprecedented programs for relief, recovery and reform, and brought about a major realignment of American politics. The Depression also resulted in an increase of emigration of people to countries for the first time in American history. For example, some went back to their native countries, and some native US citizens went to Canada, Australia. It also resulted in the migration of people from badly hit areas in the Great Plains and the South to places such as California. Racial tensions also increased during this time, by the 1940s immigration had returned to normal, and emigration declined. A well-known example of an emigrant was Frank McCourt, who went to Ireland and it also shaped modern American literature, resulting in famous novels such as John Steinbecks The Grapes of Wrath and Of Mice and Men. Banks began to fail in October 1930 when farmers defaulted on loans, there was no federal deposit insurance during that time as bank failures were considered quite common. This worried depositors that they might have a chance of losing all their savings, therefore, people started to withdraw money, the decreased money supply further aggravated price deflation, putting further pressure on already struggling businesses. The U. S. paper value lost an astonishing 40% value loss, the US governments commitment to the gold standard prevented it from engaging in expansionary monetary policy. High interest rates needed to be maintained, in order to attract investors who bought foreign assets with gold
