Federal Reserve Act

The December 1913 Federal Reserve Act created a central bank for the United States but was in many ways a compromise between those favoring public banking and those favoring private. It emphasized an elastic, flexible currency that was still grounded and stable. The Federal Reserve Act created the Federal Reserve Board and twelve district banks which blended representation from private bankers with presidentially-appointed governors. The Federal Reserve board served to adjust the discount rate, buy and sell government bonds on the open market, and set the reserve ratio. Banks were required to join this system, and within a year, almost half had done so. The Federal Reserve Act has been considered the most important piece of legislation passed within Woodrow Wilson's term, and the Federal Reserve System is still in existence today.

Divine, Robert A., T. H. Breen, George M. Fredrickson, and R. Hal Williams. America Past and Present. Revised Sixth Edition, AP* Edition . Addison-Wesley Educational Publishers Inc., 2003. 682-3. Print.

"American President: Federal Reserve Act Signed--December 23, 1913." Miller Center of Public Affairs. University of Virginia, 2011. Web. 1 Feb 2011. <http://millercenter.org/president/events/12_23>.

Web. 1 Feb 2011. <http://daretodeclare83.files.wordpress.com/2009/12/fed_reserve.jpg>.