A History of Central Banking in the United States
The Federal Reserve has been the United States’s central bank since 1913, but is our third attempt at central banking.
The First Bank of the United States was chartered in 1791 and lasted twenty years. Facing strong opposition by Jeffersonians who feared central banks were controlled by foreign interests and primarily benefitted large companies, it lost its re-charter by a single vote.
Debt caused by the War of 1812 led to the charter of the Second Bank in 1816, lasting until Jackson refused to re-charter in 1836.
The Panic of 1907 led to the formation of the Federal Reserve System in order to stabilize prices, regulate banks, manage the money supply and create a single, unified paper currency, at the time based on gold. Since then, the dollar has been inflated over 2,000%, diminishing the value of savings for Americans and anyone holding assets denominated in dollars.
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