The Federal Reserve Essay

1926 words - 8 pages

Every large economy and most small economies have central banks. Some of the better known central banks are the European Central Bank, the Bank of England, and the Bank of China. The Federal Reserve, well-known as The Fed is the U.S. Central Bank. A central bank is an organization responsible for overseeing the monetary system of a nation. Conspiracy theories describe the Fed as men in top hats and black suits, secretly meeting in dark smoke filled rooms colluding about how to use the American banking system as their private banking cartel to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government by perpetually expanding debt. These men of great wealth, political power and social influences have come together to control the world. What is the Fed, why was it created, and what is its purpose?
Before American Independence, the central bank of the colonies was the Bank of England. Some Founding Fathers were strongly opposed to the central banking system which many believed led directly to the American War of Independence. However, eight years after the Revolutionary War, the U.S. Congress at the suggestion of the Secretary of the Treasury Alexander Hamilton, established the First Bank of the United States. The bank was given a twenty year charter, but many Americans were uncomfortable with the idea of a large and powerful central bank. Thomas Jefferson saw it as an engine for speculation, financial manipulation, and corruption. Therefore, Congress refused to renew it in 1811.
In 1816, Congress once again created a central bank, in response to the inflation that resulted from the increase in banknotes printed to pay off the debt produced by the War of 1812. After he was elected in 1828, President Andrew Jackson worked to dismantle the central bank. When the American Congress voted to renew the charter of The Second Bank of The United States, President Jackson responded by using his veto to prevent the renewal bill from passing. President Jackson believed the central bank to be a tool of the rich, powerful and privileged class to oppress the will of the common people of America.
“Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence …. would be more formidable and dangerous than a military power of the enemy.”
– President Andrew Jackson
Jackson then removed all federal funds from the Second Bank of the U.S., redistributing them to various state banks and paid the final installment on the national debt. A few weeks later, on January 30th, 1835 the first attempt to kill a sitting U.S. President occurred. The assassin Richard Lawrence tried to shoot President Jackson outside the United States Capitol Building as Jackson was leaving the funeral of South Carolina Representative Warren Davis. Lawrence, an unemployed house painter from England, blamed Andrew Jackson for the loss of his job due to Jackson's opposition to the...

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