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Federal Reserve. The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States.
During the 1912 election, the Democratic Party took control of the presidency and both chambers of Congress. The newly elected president, Woodrow Wilson, was committed to banking and currency reform, but it took a great deal of his political influence to get an acceptable plan passed as the Federal Reserve Act in 1913. [14]
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States.It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises.
After the war, the Federal Reserve, led by Paul Warburg and New York Governor Bank President Benjamin Strong, convinced Congress to modify its powers, giving it the ability to both create money, as the 1913 Act intended, and destroy money, as a central bank could.
His first major priority was the Revenue Act of 1913, which began the modern income tax, and the Federal Reserve Act, which created the Federal Reserve System. At the outbreak of World War I in 1914, the U.S. declared neutrality as Wilson tried to negotiate a peace between the Allied and Central Powers.
Created by the Federal Reserve Act of 1913, districts within the Federal Reserve System work together to manage the country’s money supply and how commercial banks are funded.
In response, the Federal Reserve System was created by the Federal Reserve Act of 1913, establishing a new central bank intended to serve as a formal "lender of last resort" to banks in times of liquidity crises, panics when depositors try to withdraw their money faster than a bank could pay it out.
In 1913, Martin's father was summoned by President Woodrow Wilson and Senator Carter Glass to help write the Federal Reserve Act that would establish the Federal Reserve System on December 23 of that year. His father later served as a governor and then president of the Federal Reserve Bank of St. Louis.