The Federal Reserve--Whose Idea Was It Anyway?
Woodrow Wilson created the current central banking system of the United States by signing the Federal Reserve Act on December 23, 1913. The Act created a Board of Governors to oversee twelve Federal Reserve Banks charged with controlling the cash flow in the United States and established a Federal Open Market Committee to oversee the buying and selling of government securities. All national banks were required to join the Federal Reserve System, and other banks could join as they wished. This important reform stabilized the nation's currency and financial systems, helping to control the cycle of economic panics, which periodically struck the country.
In this lesson, students will analyze primary source material as well as web resources to better understand the creation and structure of the Federal Reserve. They will apply their knowledge to the interpretation of political cartoons and evaluate the effectiveness of the Federal Reserve at its inception and today.
- How does the government influence economic activity?
- Does the Federal Reserve actually maintain a stable economy?
Through this Lesson the student will be able to:
- Explain how the Federal Reserve regulates the money supply •Summarize the reasons the Federal Reserve is considered a cause of the Great Depression
•Identify the changes that occured after the Great Depression