Download - The History of American Banking
![Page 1: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/1.jpg)
E. Napp
The History of American Banking
In this lesson, students will identify critical periods in the history of American banking. Students will be able to identify and/or define the following terms:
BankFederalists
Anti-FederalistsFederal Reserve Bank
![Page 2: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/2.jpg)
E. Napp
A bank is an institution for receiving,keeping, and lending money.
![Page 3: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/3.jpg)
E. Napp
Today, the Federal Reserve Bank overseesbanking in the United States. It was not
always this way.
![Page 4: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/4.jpg)
E. Napp
There was a time when banks were notregulated by the Federal government.
Sometimes bankers made poor decisionsthat bankrupted their banks.
![Page 5: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/5.jpg)
E. Napp
Federalists vs. Anti-Federalists
• At the founding of the nation, Federalists wanted a strong, central bank.
• Anti-Federalists did not. Anti-Federalists believed that a strong, central bank would only loan to the rich and powerful.
• Federalists and Anti-Federalist just didn’t agree.
![Page 6: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/6.jpg)
E. Napp
Federalists, likeAlexander Hamilton,
believed that a strong, central bankwas essential for thenew nation. A strong,
central bank couldprevent abuses in
banking.
![Page 7: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/7.jpg)
E. Napp
Anti-federalists,like Patrick Henry,
believed thata strong, centralbank would havetoo much power.
Wasn’t the revolution about
limiting the powerof the government?
![Page 8: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/8.jpg)
E. Napp
Then There Was None
• Sometimes the Anti-Federalists won.
• Whenever a central bank was lacking, there was frequently chaos in banking. Banks often made too many bad loans.
• When enough people defaulted or did not pay back their loans, the banks went bankrupt.
![Page 9: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/9.jpg)
E. Napp
You see, banksmake money byloaning money.
However, if banksloan money topeople who cannot repaytheir loans,
then banks losemoney.
![Page 10: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/10.jpg)
E. Napp
The Federal Reserve Bank• Eventually, it became clear that the nation
needed a strong, central bank to oversee banking in America.
• A strong central bank could monitor banking in the country and make sure that banks did not make too many loans.
• A strong, central bank could hold bankers to higher standards thereby protecting consumers.
![Page 11: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/11.jpg)
E. Napp
In the case of banking, the Federalistsmay have been right. A central bank
does prevent abuses in banking.
![Page 12: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/12.jpg)
E. Napp
The Fed
• The Federal Reserve Bank is commonly referred to as the “Fed.”
• The Federal Reserve Bank can make loans to banks, raise or lower interest rates, and require banks to hold adequate reserves.
• The Fed helps banks across America.
![Page 13: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/13.jpg)
E. Napp
The Fed monitors banking in every partof the United States.
![Page 14: The History of American Banking](https://reader036.vdocument.in/reader036/viewer/2022062501/56816863550346895ddeb588/html5/thumbnails/14.jpg)
E. Napp
Questions for Reflection:
• What is a bank?• What was the primary difference between
the Federalist party and the Anti-Federalists?
• Why did chaos occur in banking when a strong, central bank did not exist in the country?
• What is the Federal Reserve Bank?