Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from...
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Transcript of Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from...
Financial Reforms
Financial panics
during the 1800’s people feared
losing their money in the bank
Withdrew $ from the bank
Panics led to bank’s and businesses collapsing
Depression and recession triggered (high unemployment)
Reforms
Federal Reserve Act Brought stability to the banking system
and prevented financial panics Created 13 Central Banks (Federal
Reserve) The FED Lends money to member banks
like PNC and TD Bank at low interest rates PNC and TD bank lend money to the
public at higher interest rates Lending leads to spending, sparking an
economy and leading to more hiring
People feel safe to put their money in the bank and keep it there
16th Amendment (1913) Graduated income tax (Underwood Tariff Act)