Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from...

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Financial Reforms Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from the bank

Transcript of Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from...

Page 1: Financial panics during the 1800’s  people feared losing their money in the bank  Withdrew $ from the bank.

Financial Reforms

Financial panics

during the 1800’s people feared

losing their money in the bank

Withdrew $ from the bank

Page 2: Financial panics during the 1800’s  people feared losing their money in the bank  Withdrew $ from the bank.
Page 3: 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)

Page 4: Financial panics during the 1800’s  people feared losing their money in the bank  Withdrew $ from the bank.

Reforms

Page 5: Financial panics during the 1800’s  people feared losing their money in the bank  Withdrew $ from the bank.

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

Page 6: Financial panics during the 1800’s  people feared losing their money in the bank  Withdrew $ from the bank.

People feel safe to put their money in the bank and keep it there

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16th Amendment (1913) Graduated income tax (Underwood Tariff Act)